PORTAGE — Bowling Green City Schools will run out of money in three years unless a new source of revenue is found.

Consequently, district residents will likely see an income tax request on the November ballot.

Board members will do the initial work without their treasurer as Cathy Schuller turned in her resignation at the board’s May 21 meeeting.

Her employment with the district ends June 2.

Assistant Treasurer Richelle Oberlin will serve in the treasurer’s position from June 3-July 31.

Matt Feasel will take over Aug. 1 and will be available as a consultant.

The school board in February voted 4-1 to not renew Schuller’s contract when it expires July 31. No reason was given.

She has been treasurer of Bowling Green City Schools since November 2017.

Before the board met in executive session to discuss her contract, Schuller presented an updated five-year forecast.

The district began deficit spending for the first time since 2013 in fiscal year 2023, which ended in June. Schuller predicted the district will continue to spend $3.52 million more than it will bring in in fiscal year 2024 and $8.83 million in fiscal year 2028.

There are possible options for new revenue, she said.

The district could ask voters to support an emergency levy that would capture revenue from all property owners including commercial; could transfer the $1.2 million in Rover pipeline funds to the general fund instead of the capital projects fund; or ask for support for an income tax.

Board President Tracy Hovest said after voters supported the bond issue for the new high school, which was a property tax, she did not want to return with a similar request.

Schuller explained the district currently collects a 0.5% traditional income tax that generates $4.7 million each year.

Based on the district’s four-year average, a 0.25% income tax would generate $2.19 million; a 0.50% income tax would generate approximately $4.4 million; while a 0.75% income tax would collect $6.58 million.

“We do have options,” Schuller said.

Hovest asked Schuller to prepare a five-year forecast showing the impact of each of the three income tax options.

“I think that will help a lot,” agreed board member Peggy Thompson.

“We knew we’d have to go to the voters in November,” Hovest said.

She said she favored an income tax as long as it was not for more than what was needed.

Superintendent Ted Haselman said a 0.5% income tax would only cover the district’s current deficit spending.

“The half percent, in my opinion, is not enough,” he said.

The district hasn’t asked for new operating money since 2010 and didn’t start deficit spending until fiscal year 2023, Schuller said.

The district must decide by July 26 in order to meet the first filing deadline.

The average growth in revenue has been 0.1% since 2021 and she forecasted growth of 0.5% over the next four years.

The district gets 56.6% of its revenues from property taxes and 13.1% from income taxes. State foundation contributes 22.1%

Revenues at the end of fiscal year 2024 are expected to be $36.02 million compared to $36.92 million at the end of fiscal year 2028.

The average growth in expenses has been 2.30% since 2021 and Schuller forecasted 3.43% over the next four years.

Positions previously paid for by federal dollars will shift to the general fund as those funds go away this fall. Purchased services, supplies and repair costs have all increased 26% since COVID.

Personnel costs are 78% of the budget.

Expenses at the end of fiscal year 2024 are expected to be $37.64 million compared to $44.10 million at the end of fiscal year 2028.

As the district deficit spends, it depletes its cash balance and according to Schuller’s forecast, BGCS will run out of money by the end of fiscal year 2027 without new revenue.

According to Schuller, settlement discussions are occurring between the state tax commission and Rover Pipeline. As it’s been four years since the first appeal, she couldn’t put a date on when the appeal may be settled.

“Proactive planning is the key,” she said.