One school district's crisis may signal trouble for other Ohio public schools.
Hamilton City Schools blamed changes in the state funding formula and recent
The district serves the seat of Butler County, Ohio, on the north end of Cincinnati's suburbs.
Enrollment has declined, from 9,268 in the 2022-23 school year 8,776 in 2025-26, according to
By mid-January, the district had announced it will close an elementary school and the high school's freshman campus; put its preschool program under county control; outsource nursing services; and make staffing cuts, including 10% cuts in teaching staff, 12% cuts in administrative staff and 21% cuts in clerical and educational assistance staff,
"Due to recent changes in the state funding formula, our district is currently operating at an approximate $5 million deficit during the current school year," Blevins said in a letter to parents obtained by WCPO, adding that the district's deficit projections were further impacted by "additional unfortunate situations" relating to the property tax reforms the state passed in December.
Ohio's General Assembly adopted a new school funding formula in June 2021. The state budget for the 2026-27 biennium extended the new formula.
The formula was shaped by a lawsuit in the late 1990s, said Howard Fleeter, owner of Howard Fleeter & Associates, a Columbus-based public policy research firm.
"The way to do it before the lawsuit was, we had a base cost amount," Fleeter said. "How did they get to it?" he said. "It turns out, when I poked around, the way they got to it was, they decided: here's how much money we're willing to put into K-12 education. And then they worked backwards through the formula."
In 1997, the state Supreme Court ruled, citing Fleeter's research, that the system needed to be based on an assessment of the actual cost of educating children, not the legislature's preference.
For the next decade or so, the state tried to figure out how to do that. Then the Great Recession hit, and Ohio abandoned the formula and went back to its old ways, Fleeter said. In 2021, a bipartisan effort to adopt a new formula finally gained steam. It will be phased in over six years, with fiscal year 2026 being the fifth year.
The problem is, the bipartisan effort happened in the state House, Fleeter said, and the Senate president at the time, an advocate of school vouchers, didn't care for it.
"He's going along kicking and screaming with this formula, and they figure out that you can undermine the formula by not updating the data that's used to figure out the cost, what we call the base cost of educating the typical kid," Fleeter said.
"And so what has been happening is that in all but one year of the six-year phasing-in period, they have not updated the data used to make that base cost calculation," he said. In the one year they did update the data, 2024, they relied on 2022 data, which they've been using ever since, he said.
At the same time, Fleeter said, they have been updating the property wealth data. Ohio uses the income of the residents of each school district to figure out the state and local share of school funding.
"When you update the property wealth values, every district looks richer," Fleeter said. "And so the state share has been falling. Last year, the average state share of the base cost was 38.4%; this year, it's 35%. The state budget office is estimating that next year will be 32.2%."
Fleeter said he's looked at data going back to 1999, the first fiscal year after the state Supreme Court decision took effect, and up until last year, Ohio never had the average state share fall below 40%.
"It's been the source of considerable frustration on the part of school districts," he said. "And in the legislature, they're claiming it's too expensive (to fully fund public schools), but at the same time, they almost doubled the voucher funding" from FY23 to 25, going from $610 million to $1.1 billion.
Ohio also has been gradually leveling its formerly graduated income tax, which is now a flat tax as of this year, Fleeter said.
"By my calculations, over the last three years, that's taken about $2.5 billion of revenue out of the state," he said. "Our state tax revenues are falling relative to everybody else, and we're then becoming more dependent on our local tax revenues."
Meanwhile, the legislature's previous inaction on property taxes led to a
"The recent property tax bills did a number of things," said Dan Tierney, press secretary for Ohio Gov. Mike DeWine. "When it comes to the changes that were enacted, the 20 mill floor could (previously) be used to increase revenue without putting a levy on the ballot. … A school district that was relying on the 20 mill floor to increase revenue instead of going to the voters… would no longer be (able to pursue) an unvoted increase in revenue."
If a school district does want to increase revenue, it can — by going to referendum, he said.
The property tax reforms also reduce the number of types of levies, eliminating replacement and emergency levies.
"There's much more transparency to the voter about what they're voting on," Tierney said, noting that emergency levies did not necessarily require fiscal emergencies.
"If you have a large surplus in reserves, (the reforms) would limit your tax revenue," he added. "That's perhaps the biggest revenue change."
In the fiscal year ended June 30, 2025, Hamilton's expenditures exceeded its receipts by $4.7 million, but it still finished the year with a general fund balance of $48.3 million, according to its 2025
Taxes collected have been steadily rising in the district, climbing to $39.48 million in collection year 2024 (for tax year 2023) from $30.2 million in collection year 2020.
The taxation rate has dropped to 50.56 from 52.81. And the share of general fund revenues contributed by the state funding formula has declined from 76% in 2021 to 73% in 2025.
The district has $33.5 million of outstanding bond debt, from its Series 2020A general obligation unlimited tax school refunding bonds and its Series 2015 various purpose GOULT refunding bonds, according to postings on the Municipal Securities Rulemaking Board's
The Hamilton district's GOs carry an underlying rating of A-plus with a stable outlook from S&P Global Rating. They are rated AA-plus based on the district's participation in the Ohio School District Credit Enhancement Program.
S&P declined comment.
The property tax reforms have exacerbated a dynamic in which "we vote on property tax issues far more than anybody else," Fleeter said, noting that from 1984 to 2024, Ohio saw about 10,341 school operating levy votes. In the same period, the state saw 5,815 capital levy votes.
Already, nearly two thirds of school districts in Ohio are at the 20-mill floor, the limit at which local property tax rates can be cut under a law that rolls them back as property valuations increase. A large share of those are in rural parts of the state, where residents tend to be less willing to approve levy referendums, Fleeter said.
"Let's say you're a 20-mill-floor school district in Ohio, and you just had a reappraisal," he said. "And your property values went up 25% and your residents just had, on average, their school taxes go up by 25%. If that's two thirds of their tax bill, then you can say their taxes are going up 16 or 17%. Now, if you then need, two years later, a bond levy, good luck with that."
Regarding the state funding formula, DeWine spokesman Tierney said the key factors are the individual school district's inputs.
"The formula has not changed dramatically," said Tierney. "It is possible for numbers to change due to inputs changing," with two possible changed inputs: an increase in local property tax revenue or a significant decrease in enrollment.
"Either one of those reasons, there should be financial mitigation," he said. "If there are fewer students to educate, then there should be a reduced need for funding."
Tierney acknowledged there are some risks to school districts in Ohio's property tax reforms, but said this is what the state's citizens want.
"Yes, it might create ballot fatigue, that certainly is a possibility, but ultimately, Ohio is a state (that believes in) local control," he said.
"In Ohio, voters get to choose how much they support their local schools," he added.
Blevins, Hamilton's superintendent, and Treasurer Jeremy Frazier did not respond to requests for comment.
