Toledo-area school district administrators and others across the state refer to it as The Cliff: the point late in the next fiscal year when federal stimulus money dries up and leaves school budgets in deep trouble.
A quadruple wallop of sorts is brewing as three pots of stimulus money - $1.75 billion in total for Ohio schools - are scheduled to go away after the 2011-2012 school year. And if the economy and tax revenues don't rebound to fill the gap, major questions are whether Ohio lawmakers will be able to replace it with state revenue and, if not, then what more might have to be cut from local school budgets after next year.
"We see that there's the potential, as they say, with a cliff. But what happens is that you either go over it, it gets extended, or a bridge is built," said John Foley, superintendent of Toledo Public Schools. "I don't want to predict dire straits. We can anticipate."
TPS already has cut $17.5 million from its $290 million operating budget for next fiscal year and is asking Toledo voters to approve an income tax levy May 4 to prevent another $12.5 million in cuts, which could include canceling some athletic programs, scaling back bus service, and laying off all crossing guards.
A lot of federal money is at stake.
For example, the end of stimulus funding means a potential loss of $51 million to TPS over two fiscal years.
TPS and other districts are receiving money directly from two federal programs. A third source of federal money is funneled through the state's general fund.
TPS has been using some of the money to buy new technology and to train teachers how to better teach children who might be falling behind, among other purposes.
Ottawa River Elementary school student Jasmyne Ramasocky uses an electronic clicker to answer a question during class.
In other systems, such as the Perrysburg Exempted Village School District, the amounts are smaller but still significant.
That district might have to deal with a $1.9 million hit over two fiscal years, Assistant Treasurer Christine Knudson said. The system has used $500,000 of the stimulus money to buy textbooks, she said.
Washington Local Schools is receiving $4.1 million and has used some of it for utility costs and to build a needed elevator, among other expenses.
The Springfield Local school system is receiving $2.3 million in stimulus money over two fiscal years, said Bob Moellenberg, treasurer for the system. It has used some of the money for literacy programs and to pay for teacher training, he said.
He said that with the planned termination of the stimulus program and other potential changes at the state level to how schools are funded, the financial future makes planning difficult.
"You think you know the rules and then the legislature waves its magic wand, and it changes," he said. "Anyway you look at this scenario, it's not a good situation. There are these cliffs everywhere you turn. In my tenure, in this position, I've never seen anything like this."
The stimulus money comes from President Obama and Congress' American Recovery and Reinvestment Act. It was doled out to school systems in three ways - each with its own set of restrictions.
Two pots were designed to last two fiscal years and ensure that special education programs and low-wealth elementary schools weren't hurt by the recession.
The money was supposed to be spent in ways that would not create long-term expenses beyond two years.
That's a tricky proposition, said Dan Romano, TPS treasurer.
TPS decided to spend some of it on teacher training and refining teaching manuals, called pacing guides.
The pacing guides are an outgrowth of a newer educational philosophy that says students should learn at their own pace and that teachers must be able to identify each child's level of understanding and then act on it.
The expanded guides offer alternative ways to teach concepts if a child doesn't get it.
Some of the money was spent to train a teacher at each TPS elementary school as an intervention specialist - someone who helps teachers and students who are having trouble.
There's also new technology.
In Jeanne Hufford's Ottawa River Elementary School classroom, students use clickers, like remote controls, to answer questions posted on an electronic bulletin board. Some of the clickers and technology were purchased with the federal stimulus money.
Based on the students' answers to some questions, Ms. Hufford can see who understands the concept and who is having trouble. She also can disguise their names on the board so the students don't know who is answering incorrectly.
The clicking provides her a real-time survey of student knowledge couched in a fun activity, she said. It also reflects the most current technology that students are seeing and using in their everyday lives, including smart phones and interactive television, she said.
"It's not just new technology," she said. "It's strategies for teaching in the real world."
The third pot of federal stimulus money was given to state legislators to distribute to local districts to keep their funding stable and to protect jobs in the face of the recession.
State lawmakers took the cash and placed it in the state's general fund. But they also used an equal amount for other purposes, so the school funding stayed about the same.
It's called stabilization money, and the state funneled it into the operating budgets of local school districts, paying for utility bills, textbooks, teacher salaries, and other basic expenses.
For TPS, this third pot equals about half of the stimulus money it has received - $25 million over two years.
The money is a big unknown because lawmakers don't have to replace it after it dries up after the next fiscal year. And if the economy doesn't recover quickly enough, state lawmakers could decide to only replace some of it.
For Washington Local, its share of this third funding source equals $1.2 million, or about 6 percent of the system's operating budget, Treasurer Jeff Fouke said. He said the system has been using it to pay for utility costs.
He and other treasurers are waiting to see whether and how the money might be replaced.
Already this month, at least one bill was filed in the General Assembly to extend the stabilization money using state funding.
The federal government could choose to extend some or part of the program. The money also could be replaced by increasing taxes or from future casino and other gambling revenue in Ohio.
Lawmakers from both parties also say reforms to how state Medicaid expenses are reimbursed must be implemented, which also would save money.
Mostly, lawmakers are praying for a return to prosperity. That way, the money will be replaced naturally through increased tax collections and from an improved economy.
State Rep. Randy Gardner, a Bowling Green Republican, has put forth some sobering predictions. He says the governor's office is using future economic growth predictions that are too rosy.
He said that local school districts need to be freed from some state rules that would restrict how school districts can spend money and would mandate other programs. Those include all-day kindergarten and certain pupil-teacher ratios to keep class sizes down, he said.
"The big question mark for Ohio schools is, do you have to spend the money as the state wants, or do you get the money and spend it how you want?"
Rep. Stephen Dyer, a Democrat from Green, Ohio, said gambling revenues just from allowing slot machines at racetracks would raise $900 million.
He said he expects the economy to come back and for state tax revenues to increase over the next year. He said that during this recent downturn, Ohio kept education cuts to a minimum and went looking for revenue in other parts of the budget.
"Some states saw 25 percent cuts to their education budgets," he said. "The federal stimulus money was meant to essentially keep everyone where they were last year. If that money goes away, the question is really, what will the economy look like?"
Contact Christopher D.
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