State school funding overhaul begins trek through Ohio House

Stock image from Pixabay.

Public school financial leaders stood behind the state funding overhaul that was once again brought before the Ohio House Finance Committee on Tuesday.

In its seventh hearing in the House, House Bill 305 was supported by chief financial officers from Akron Public Schools, Trimble Local Schools in Athens County, Chardon Local Schools in Geauga County, and Waverly City Schools in Pike County.

“(The House funding bill) provides the elusive answer to the school funding challenge for the last few decades,” said Ryan Pendleton, CFO at Akron Public Schools, and a member of the legislature’s fair school funding work group.

The House measure is years in the making, and has since had a Senate companion bill modeled after it. Tuesday’s hearing in the House Finance Committee included a motion to create a substitute bill that would include some changes also found in the Senate version.

The biggest points of discussion between the CFOs on the bill were the changing ratios for property tax reliance set up in the bill, along with the balance of funding that will go directly to the classroom, and a new mechanism to identify the true cost of educating a “typical child.”

“There are clear, undeniable differences among school districts, including relative property wealth, income levels, needs within distinct student populations, physical geography and many other factors that impact the operation of a school district and the ability to effectively educate its students,” said Jared Bunting, CFO of Trimble Local Schools.

Under the current formula, the base cost — what the state has determined it takes to educate a child with no extra assistance needs — has been set at $6,020. Under House Bill 305, the per pupil base cost is about $7,200.

In the proposed changes, the funding will be built on a school district’s actual needs and capacity, which is its ability, based on income tax levels and property tax numbers in the district, to contribute to the local share of school funding.

Mike Sobul, who is a private consultant working with the legislature on the school funding changes, said the median income in Ohio is about $34,000, based on income tax numbers. Any districts that fall below that median level will receive more help from the state in funding their schools.

Any schools that are above that median amount will pay between 2.25% and 2.5% for their local share of the funding. The House and Senate measures both cap the required local share at 2.5%.

Legislators were quick to question whether the new funding formula creates more equity, with such unique situations in every state school district. State Rep. Jack Cera, D-Bellaire, wondered how the oil and gas industry’s impact on property levels in certain districts might affect the funding the school districts in the same area get.

For Sobul, the answer is simple: The formula will automatically correct for those situations. He mentioned the Switzerland of Ohio School District, a district that spans 500 square miles of the state. With the current property valuation of in the district, much of it made up of mineral rights and pipeline sites, that district is considered one of the five wealthiest districts in the state, according to Sobul.

“But, we are seeing their mineral values declining, and guess what? They’re going to become poorer in the eyes of the formula,” Sobul said. “The formula will automatically correct for that.”

One of the cosponsors of the bill, state Rep. Gary Scherer, R-Circleville, jumped in during questions about the durability of the formula as economic changes hit the state. He said not only would the formula be frequently changing to accommodate fluctuations in the state economy, but a commission would be created as part of the bill to oversee the funding changes.

“They will be charged with meeting at least every six months to make sure this formula is working,” Scherer said.

State Rep. Jon Cross, R-Kenton, said he’d received questions from his constituents in districts who are struggling to pass levies on their own. He said school districts are “tired of passing levies” and are demanding answers on why the legislature hasn’t taken the burden off the local taxpayers.

Pendleton said that was “the most complicated question that has plagued Ohio funding for decades,” and it partly comes from a broken foundation in the education system.

“We’ve gotten it so wrong that we’ve defined wealth in such gross miscalculations across the state of Ohio, from our urban centers to our rural and Appalachian centers,” Pendleton said.

But the new formula, if passed, will better recognize what is needed to educate a child, and Sobul said it “should greatly lessen the need for districts to come back to the ballot.”

“This is the first time in maybe 30 years that we’ve defined a community’s ability to participate in the formula,” Pendleton said.

When it comes to “categorical aid,” including economically disadvantaged students, language in the House bill would immediately fund poverty-stricken areas, and may change even more after a study funded under the bill further analyzes the impact of low-income areas on education.

Claudia Zaler, treasurer and CFO at Waverly City Schools, presented the fair funding working group’s recommendations on helping districts who fall under the economically disadvantaged category. She said the current funding formula “appears to have no foundation in objectively determined, needs-based standards.”

Funding under the new proposal will be based on the concentration of poverty in a district.

In modifying the formula, Zaler said expenditures should include things missing from the current education initiatives, such as social or emotional support services, family engagement, and reductions in class sizes.

Another addition she said would be important as part of a long-term retooling of the education system in Ohio is district-wide professional development “to provide greater insight into the need of the disadvantaged population and enhanced ability to recognize and address those needs.”

State Rep. Stephanie Howse, D-Cleveland, said funding for economically disadvantaged students is one of the things she still thinks needs work, particularly the six-year timeframe for full implementation.

“On some of this stuff, it’s like, we need to fix it,” Howse said. “Figure it out, find the money, fund education so our babies can have a real chance, so that people will actually want to come to this state.”

House Finance Chair Scott Oelslager, R-North Canton, said other testimony on the bill which time constraints didn’t allow would be heard next week. The Senate companion bill was referred to its Finance Committee on Tuesday.

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