Ohio School Funding Falls Below Inflation Over Past Decade, Funding Gaps Remain Between Rich and Poor

It is a reality across America that when state and local school revenues are combined, the school districts serving our society’s wealthiest children continue to have the most money to spend on teachers and curriculum and enrichment while the school districts serving our poorest children have the least resources.  It has also been confirmed again and again that when poverty is concentrated—that is when a high percentage of children in a school are very poor—the school’s financial needs are much greater.

Surely it should not surprise us, then, that in a new report, Howard Fleeter, an economist and school funding analyst at the Ohio Education Policy Institute, demonstrates that in Ohio, in the twenty years since the Ohio Supreme Court found Ohio’s school funding unconstitutional and Ohio revised its funding formula, more money continues to be invested in the education of students in wealthy suburbs than in poorer rural and urban schools. Fleeter begins the report with a bit of background: “After the first Supreme Court ruling in the DeRolph lawsuit on March 24, 1997, a state panel was assembled to review and revise Ohio’s school funding formula.  FY1999 was the first year that new formula was implemented.”

Fleeter examines funding in 604 of the state’s school districts by separating Ohio’s school districts into quintiles based on the local property tax base in each district.  He finds that over two decades, revenue has increased for all Ohio school districts, but the nuances are far more complicated: “First, there is a pronounced trend in each of the two 10-year periods after DeRolph showing that the largest increases in local revenues were in the wealthiest school districts, while the smallest increases were in the poorest school districts… Second, there is a very stark difference in the pattern of state aid from FY99 to FY09 vs. that from FY09 to FY19. From FY99 to FY09 the inflation adjusted state average increase in per pupil state resources was $870 per pupil, while there was a -$64 pupil inflation-adjusted decrease in state resources per pupil during the FY09 to FY19 time frame… Finally,, in terms of total state and local resources… the first 10 years after the DeRolph ruling was responsible for the bulk of the increase in total resources apparent since FY99.”

Covering Fleeter’s new report, the Columbus Dispatch‘s Jim Siegel explains why state funding increased in the first decade after the decision and then dropped in the most recent decade after the Great Recession in 2008 and 2009.  State policies over the decade have further intensified what the recession began: “GOP leaders also eliminated the tangible personal property tax, which more than a decade ago generated about $1.1 billion per year for schools. For a time, state officials reimbursed schools for those losses, but that has largely been phased out…. And finally, there are Gov. John Kasich’s funding formula and fiscal priorities, including income-tax cuts that have meant an estimated $3 billion less in available revenue each year.”

Siegel quotes Fleeter in an interview about the new report: “Clearly, he (Gov. Kasich) has prioritized reducing the income tax and has done that at every possibility. Those revenues, if we had them, would go a long way toward making (the numbers) look different.”  Fleeter also tells Siegel that Governor Kasich’s school funding formula has made funding less equitable: “The formula itself is kind of just spraying money in a not-very-targeted way.”

And the problem isn’t that poor local school districts are failing to try to pass their local levies and do their part locally.  Fleeter’s report explores the role of local tax effort across school districts: “(T)he wealthiest school districts… have the lowest tax effort… and the poorest school districts in Ohio… have the second highest tax effort…. The Tax Effort measure shows that when ability to pay is taken into account, the low wealth districts are levying taxes at the highest rate relative to their income, while the highest wealth districts are levying taxes at the lowest rate relative to income.”

For Ohio Statehouse News Jason Aubrey also interviews Fleeter about the new report and the problem of Ohio’s continuing over reliance on local property taxes. Fleeter tells Aubrey: “The poor districts, no matter how hard they try to get their voters to support levies, just can’t raise enough money.”  Aubrey demonstrates Fleeter’s analysis with an example from Franklin County: “Let’s say a low wealth district like Hamilton Local School District in Franklin County were to ask voters to pass a 1 mill levy.  Even if they did, the levy would not bring in as much money as if a high wealth district like Upper Arlington City Schools were to ask its voters to pass a 1 mill levy.  That’s because the property values are different in both areas.”

Fleeter’s new report concludes: “(W)hile state & local revenues have increased for all wealth quintiles, the lowest wealth districts still have lower total revenues per pupil than do the highest wealth districts… This is an indication that the funding gap between low wealth and high wealth districts has not been narrowed appreciably since the DeRolph decision.”

2 thoughts on “Ohio School Funding Falls Below Inflation Over Past Decade, Funding Gaps Remain Between Rich and Poor

  1. This is really clear. Thanks for writing it. Should the coalition sponsor a forum on school funding? Susie

    Sent from Mail for Windows 10

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