A Strategic Approach to Ohio K-12 School Funding: Planning Capital Improvement Projects

Article Takeaways

• Funding uncertainty makes long-term planning more important. Ohio school districts can prioritize facility needs based on urgency, educational impact, operating costs, and available funding.
• Ohio’s capital improvement set-aside can support permanent facility needs. Districts are required to establish funds for qualifying capital improvements and maintenance.
• Unused set-aside funds can support future needs. Funds under Ohio Revised Code 3315.18 that are not used during the fiscal year carry forward, allowing districts to consider upcoming capital priorities.
• Some capital projects can also reduce operating costs. Improvements such as HVAC, lighting, and building controls can address aging infrastructure while creating opportunities for energy and maintenance savings.
• The best funding strategy starts with a clear facility plan. Understanding facility conditions, priorities, and available resources can help districts determine which capital improvement projects in Ohio should move forward first.

How Districts Can Keep Capital Improvement Projects Moving

Ohio school districts are being asked to do more with less. At the same time, aging facilities and critical systems such as HVAC, roofs, lighting, controls, and security still require attention.

These needs don’t always have the luxury of waiting for budgets to improve.

The challenge for many Ohio school districts is to address critical facility needs without further straining already tight budgets. Luckily, there is a solution, and it starts with a strategic review of available funding and existing facility resources.

Start By Defining Your Needs

When budgets are tight, it can be tempting to focus on the most visible facility problem. But replacing one failing system without understanding the condition of the rest of the district’s facilities can make long-term capital planning more difficult.

A comprehensive facility assessment can help districts understand what needs attention now, what can wait, and what may become a larger expense if it is deferred.

From there, district leaders can prioritize capital improvement projects based on factors such as:

• Health and safety
• Remaining equipment life
• Educational impact
• Energy and operational costs
• Potential maintenance savings
• Available funding

Instead of treating every need as a separate expense, districts can develop a long-term plan that directs limited resources toward the projects with the greatest impact.

Make the Most of Ohio’s K-12 School Financing

Ohio school districts should consider the state’s capital improvement and maintenance 3% set-aside as part of that plan.

What is Ohio’s 3% Set-Aside Law?

Under Ohio law, qualifying school districts must establish a fund for capital improvements and maintenance (Ohio Revised Code 3315.18). One method requires districts to deposit an amount calculated using 3% of the prior year’s statewide average base cost per pupil multiplied by the district’s previous-year enrollment. Ohio law also provides an alternative calculation method based on prior-year base revenue.

These funds are specifically intended for the acquisition, replacement, enhancement, maintenance, or repair of permanent improvements.

Rather than viewing the set-aside simply as an annual requirement, districts can incorporate those dollars into a broader capital improvement strategy.

For example, a district may identify several improvements that need to occur over the next five years and determine how to strategically allocate its available capital funds over time. Because unused set-aside funds can be carried forward, districts may also have opportunities to plan for larger future needs rather than approaching each year’s projects independently.

The goal is not simply to spend available capital dollars. It is to make sure those dollars support the district’s highest priorities.

Look for Projects That Can Reduce Future Costs

Another way to stretch limited funding is to prioritize facility improvements that can lower ongoing operating expenses.

Aging HVAC equipment, inefficient lighting, and outdated building controls, for example, may create both a capital need and an opportunity for long-term savings. When districts evaluate energy and maintenance costs alongside equipment condition, they can identify improvements that address infrastructure needs while potentially reducing future expenses.

Districts may also consider whether projects can be bundled together. Addressing multiple improvements through a single coordinated capital program can help leaders evaluate the overall financial impact rather than completing isolated projects year after year.

Consider All Available Funding Options

The 3% set-aside is not the only resource available for Ohio school capital improvements.

Depending on the project and district, funding strategies may include permanent improvement funds, local funding, grants, financing options, or approaches that use guaranteed energy and operational savings to help pay for facility improvements.

There is no single funding strategy that will work for every Ohio school district. The right approach depends on the district’s existing resources, facility conditions, priorities, and long-term financial outlook.

That is why identifying funding options should happen alongside facility planning—not after a project has already been defined.

Build a Capital Plan That Can Adapt to Evolving Needs

Funding uncertainty does not eliminate the need to maintain school facilities. It makes planning even more important.

A strong capital improvement plan gives Ohio school leaders a clear picture of what their facilities need, what should happen first, and what resources may be available to accomplish the work. It can also help districts adjust when budgets, enrollment, construction costs, or funding opportunities change.

For districts navigating today’s Ohio education funding environment, doing more with less does not necessarily mean completing fewer projects. It means being more intentional about which projects move forward, when they happen, and how they are funded.

By connecting facility needs with available capital resources, districts can make informed decisions today while preparing for their buildings’ needs tomorrow.

Getting Started

Interested in understanding your district’s facility needs? Schedule a no-obligation facility assessment. Our team will evaluate your school buildings and help you identify and prioritize projects based on what needs attention now and what can be planned for the future.