Ohio’s New Budget Helps Public Schools and Expands Privatization All at Once

Ohio’s 1.7 million students enrolled in public schools; their parents, teachers, principals, and school superintendents; and the citizens who pay local property taxes all owe a debt of gratitude to Robert Cupp.

Formerly a state senator and an elected justice on the Ohio Supreme Court, and currently the Speaker of the Ohio House, Cupp and former state representative, John Patterson led the group of legislators, educators, and policy experts that, over three years, designed the House’s Cupp-Patterson Fair School Funding Plan, which this week became the centerpiece of Ohio’s new budget.

Republicans dominate both chambers of the Ohio Legislature with veto-proof majorities, but thanks to Cupp’s leadership and a massive demand from across the state for a better public school funding formula, both chambers of Ohio’s legislature agreed on Monday night to delete the Ohio Senate’s inferior and rushed alternative school funding plan and restore the House’s Fair School Funding Plan into the state budget.  The new budget was sent to Governor Mike DeWine for his signature.

The education provisions in the new budget are far from perfect.  In a number of ways the budget reflects a clash of ideologies that splits legislators along party lines, although Speaker Cupp represents a group of Republicans who have stalwartly supported the Ohio Constitution’s mandate for the state’s provision of a thorough and efficient system of public schools.

Like Cupp, Rep. Jamie Callender (R-Concord) believes in the role of government for providing a fair and adequate system of public education.  Callender was one of the House sponsors in the current legislative session for the Fair School Funding Plan, and he expressed his relief that the House plan was restored into the budget by the conference committee: “This (budget) bill does something… a lot of folks thought was impossible a few years ago. This bill is a victory for every child in the state of Ohio… This bill takes the flaws of our antiquated, band-aided, broken, outdated, unpredicable, untransparent public district school funding formula and replaces it with what’s become known as the Cupp-Patterson plan.”

Contrasting with Cupp and Callender, Gongwer (6/28/21) quotes Senator Andy Brenner (R-Delaware) describing the budget compromise that expanded his priority—vouchers and charter schools—in addition to improving public school funding: “We have a school funding formula for the first time in two years that is going to help out all school districts in the state of Ohio… And included in that school funding is a large amount of school choice options.”

The new budget includes a 3 percent income tax cut. Ohio Republicans have, according to Ohio Senate Finance Committee Testimony from Policy Matters Ohio’s Wendy Patton, a long history of slashing income taxes and this budget is no exception: “The tax reductions… come on top of huge tax cuts the richest Ohioans have received over the past 16 years. While lower-and middle-income Ohioans on average saw little change or paid more in state and local taxes, the top 1% received more than $40,000 a year in tax cuts.” Gongwer (6/28/21) quotes Ohio Senate Finance Committee Chairman Matt Dolan (R-Chagrin Falls) bragging about this budget’s 3 percent income tax cut: “I think this is a budget for Ohio individuals… We are funding our education. We’re expanding our ability for choice in education. We are returning hard-earned dollars back to individuals.”  Dolan adds, according to Gongwer, “I think we want to be competitive.  Only Indiana now is lower than us in our surrounding  states… It is a matter of giving money back to individuals. It is also a matter of making our state attractive for development.”  Dolan’s loyalty to tax cuts that benefit the wealthy could be viewed as self-serving; he comes from the family that owns Cleveland’s major league baseball team. Dolan’s Senate Finance Committee adopted the Senate’s alternative school funding plan into the version of the budget that it sent last week to the budget conference committee along with a proposed 5 percent income tax cut.  The House-Senate conference committee moderated Dolan’s planned tax cut and rejected the school funding plan his committee sent forward.

Addressing his colleagues as they got ready to vote on the budget bill, Sen. Vernon Sykes (D-Akron) most eloquently expressed what has been universal gratitude from legislative Democrats for the restoration of the Fair School Funding Plan into the new Ohio budget: “As we look back on this time, one of the most significant improvements that we’ll be making in education is what we’re voting on today in this Fair School Funding Plan.”

For the Plain Dealer, Andrew J. Tobias and Jeremy Pelzer describe the financial consequences of the budget conference committee’s restoration of the Fair School Funding Plan into the new budget: “The budget bill largely incorporates a House education plan that was designed to significantly boost funding and make Ohio’s system of funding schools more fair by targeting poorer areas… The bill… imposes a new school funding formula, throwing out the existing system of artificially funding and capping funding for certain districts. The result is a $226 million increase for K-12 education in 2022 and another $141 million increase in 2023.”

But the budget is a product of compromise in a legislature dominated by fiscally conservative Republicans who favor the expansion of taxpayer-funded charter schools and vouchers. And the conference committee limited the scope of the Fair School Funding Plan. The new budget does not adopt the Fair School Funding Plan’s full six-year phase-in; the original House version envisions more pieces of a complicated formula falling into place beyond the current biennium.  By design, the original Fair School Funding Plan evaluates the programs Ohio’s public school districts need to provide, costs them out, and then indexes them to inflationary price increases over time.  Matt Huffman, the Senate President, has forced the legislature to limit the plan to the current budget biennium, which means that after two years legislators can simply refuse to continue funding the programs that are part of the plan.  Such an eventuality would send school districts once again rushing to the ballot to try to pass local levies and would take Ohio’s public schools back into another era of “overreliance” on local property taxes. “Overreliance on local property taxes” was found unconstitutional in DeRolph. because local school districts across our state have such disparate capacities to fund their public schools.

The Ohio Capital Journal‘s Susan Tebben describes Senate President Matt Huffman’s justification for passing only the first two years’ of the Fair School Funding Plan: “The original plan for the funding formula was a six-year phase-in program, but in the new state budget, only two years are funded. Senate President Matt Huffman said the out-year costs are ‘still a significant concern,’ but the main motivation for only looking two years into the future of education was the budget cycle. ‘No matter what we do about predictability, all spending decisions under our constitution are two-year decisions.'” Senator Huffman is a dogged fan of the expansion of school privatization, and there are many people who question Senator Huffman’s motive for passing only two years of a well-designed six-year plan.  Many public school supporters suspect that to ensure the continuation of the plan after two years, they will be required once again to mount the same intense advocacy that contributed to this year’s compromise that at least yielded two years of public school funding reform.

Still, Representative Bob Cupp, who brought together the group that developed the Fair School Funding Plan, believes (Gongwer 6/29/21) its launch in the next biennium will be significant: “It’s going to be up to future General Assemblies, but it does put in place the template for how you calculate the base costs and how you distribute the funds, which is a much more fair and stable and predictable process… It does begin that calculation on the real cost of educating our children… It’s been the culmination of decades.”

The House’s original Fair School Funding Plan also contained a school funding oversight commission and the development of studies to track school districts’ real costs over time along with the funding challenges for school districts serving concentrations of poor children.  The new budget omits those provisions.

This week’s new Ohio budget also significantly expands school privatization through vouchers and charters by raising the amount of each taxpayer funded, private school voucher from $4,650 to $5,500 for K-8 students and from $6,000 to $7,500 for high school students.  The new budget also accommodates a Senate priority by establishing a new tuition tax credit private school voucher plan. The Plain Dealer’s Tobias and Pelzer explain that the new budget: “Offers a state income tax credit for private school tuition of $500 for those making less than $50,000 and of $1,000 for those making less than $100,000.”

On the positive side, the Legislature corrects the extremely disequalizing method Ohio has used to fund privatization. The new  budget provides for direct state funding of vouchers and charter schools as a replacement for the old method that extracted the cost of vouchers and charter school tuition right out of local school district budgets.

And, the new budget creates a path for three of the state’s poorest school districts to emerge from punitive state control. After the 2015, middle-of-the night passage of Ohio HB 70, the school districts in Youngstown, Lorain and East Cleveland were taken over by the state, which created Academic Distress Commissions to oversee their operations and seize power from their elected boards of education. Under the budget bill this week, Ohio Capital Journal‘s Susan Tebben reports: “Academic distress commissions will be a thing of the past, under a measure from the Senate version of the bill.  The language… allows the three districts… to create a three year plan to be released” from state oversight.

There were several other worrisome differences between the Ohio House’s and the Ohio Senate’s budget proposals, most of them expanding charters and vouchers.  In a bill that is a thousand pages long, it will take some time for experts and reporters to sift through a mass of provisions that may have survived the conference committee’s negotiations. For example, there was a provision in the Senate’s budget to expand the permissible location of charter schools to all the school districts in the state rather than limiting their location as it is today to particular school districts. I don’t know whether that provision survived the conference committee.

Another amendment being considered by the conference committee required that school districts sell or lease a school building to a charter school if the public school building was used in the previous school year for academic instruction for students at less than 60 percent of building capacity. If that provision remains in the budget, Governor Mike DeWine should use his line item veto to remove it. The state of Ohio should not be mandating that school districts sell off the facilities they own in order to promote the expansion of charter schools.

The Ohio Constitution defines public schools as an institution embodying our mutual responsibility to each other as fellow citizens and to Ohio’s children.  The budget conference committee’s restoration of the Fair School Funding Plan, even if limited only to the upcoming biennium, will restore adequate funding to the schools that serve our state’s 1.7 million public school students and will significantly equalize children’s educational opportunity across our state’s 610 school districts.

However, the expansion of vouchers and charter schools opens the door for future growth of school privatization.  Ohio’s parents and citizens who believe in a strong system of public education will have work to do to preserve the Fair School Funding Plan beyond the current two-year limit and to prevent the rapid expansion of vouchers and charters at the expense of public schools in future state budgets.

New Statewide Campaign Pressures Ohio Senate to Pass School Funding Reform in FY22-23 State Budget

On Wednesday, four key organizations announced ALL in for Ohio Kids, a statewide campaign to demand that the Ohio Senate will pass a major a new school funding formula as part of the FY 2022-23 state budget.

The new coalition brings together four organizations: the Ohio Education Association and the Ohio Federation of Teachers, representing public school teachers; the Ohio Organizing Collaborative, pulling together public school parents and community members; and Policy Matters Ohio, adding the weight of complex policy expertise.

A new school funding plan, developed over several years, was passed on April 21st by the Ohio House of Representatives as part of the FY 2022-2023 state budget and submitted to the Ohio Senate. The Ohio Legislature must, by law, come up with a compromise by June 30.

With Ohio’s Republican supermajority House and Senate, you might suppose that members of the Ohio Senate would simply affirm the proposal forwarded by their colleagues in the House. You would be wrong. While the plan was originally sponsored by and developed under the guidance of House Speaker Bob Cupp and passed by the Ohio House in a stand alone bill in December by a vote of 87-9, the Senate Finance Committee Chairman Matt Dolan refused to bring the House bill forward for a vote by the full Senate. Therefore, the bill died at the end of the FY 20-21 legislative session.

The New All In for Ohio Kids Campaign and Policy Matters’ Wendy Patton Release Major Report

Outlining Ohio’s urgent need for the Fair School Funding Plan, Policy Matters’ state fiscal expert Wendy Patton released a position paper as part of the launch of the All in for Ohio Kids Campaign: “For many years Ohio lawmakers have provided neither sufficient nor fair distribution of state support. Even as policymakers have expected public schools to do more, they have cut state aid to public schools over time, by allowing it to be eroded by inflation and diversion of funds to charter schools… and vouchers… As a result, public schools have increasingly relied on local resources, which causes unequal funding…. This is because our state’s school funding system relies heavily on property taxes, which advantages wealthier districts… As corporations eliminated jobs with living wages in Ohio, racial discrimination in employment and government-sanctioned segregation forced Black, Indigenous and other people of color into neighborhoods of concentrated poverty…. Schools in these communities need additional resources, but the declining local tax base cannot generate what’s needed. Many rural and small-town districts have faced economic challenges that make it hard for them to provide local funding.”

Patton outlines what has happened to the state’s level of investment in public schools: “On average, local governments paid for the greater part of school funding in each of the last 40 years but three, 1987-1989. At times, the gap narrowed between state and local share, but the 2006-07 budget halted that progress by eliminating major business taxes and phasing in big state income tax cuts. Gov. Ted. Strickland made positive steps using federal stimulus…. But Gov. John Kasich promptly reversed that effort with a $1.8 billion cut to school funding imposed over the two-year budget of 2012-13. School funding has lagged ever since. By 2020, the state share of school funding had fallen to its lowest point since 1985.  Lawmakers…. also changed the formula for granting state aid four times over the past dozen years. Uncertainty in state aid makes planning and staffing hard for districts.”

Although the Ohio Constitution requires the state to establish a “thorough and efficient system” of public schools, and despite that the 1997 Ohio Supreme Court declared the state’s school funding unconstitutional and overly reliant on local property taxes—a decision whose demands have never been met, Patton describes the state’s funding of public education today as “a system of Band-Aids and patches”: “Today there is little connection between the funding of Ohio’s schools and the cost of educating a student: Formula funding is simply frozen at 2019 levels. Lawmakers provided no increase to cover the effect of inflation and the rising cost of education since then. According to projections used in the governor’s budget, between 2019 and 2023, state formula funding for public education will lose over $600 million in value as a result of inflation.”

Patton castigates the legislature for diverting an ever growing amount of state education dollars to charter schools and private school tuition vouchers at the same time Ohio’s legislators have failed to fund the public schools which serve 1.6 million Ohio students. Funding for charter schools is by school district deduction, which counts the student as though enrolled in the public school district, sends the state’s basic aid school funding amount to the public district, but then deducts from the local school district budget the state’s allocation for each charter school student. In many cases, the state charter school deduction from the school district’s budget is significantly more than the district receives in basic aid for that same student.  Patton provides an example: “Columbus received $4,815 per student in the 2018-19 school year in state formula funding, but the district had to provide an average of $8,305 per student in the 2018-19 school year to students at charter schools. In other words, for every charter student, Columbus must provide $3,489 more than it receives from the state.”

One of the state’s voucher programs, EdChoice, works the same way. The state sends the school district’s basic aid amount but then deducts $4,650 for every K-8 voucher and $6,000 for every high school student voucher. And because EdChoice voucher qualification rules limit the vouchers only to students living in the attendance area of a school designated by the federal government for Title I, school district deduction EdChoice vouchers are concentrated in areas of family poverty. Here is Patton’s explanation: “The use of vouchers is heavily concentrated in a limited number of districts. Fifteen of the 31 districts that transferred 10% or more of their total state aid to vouchers are located in Cuyahoga County.”  Cuyahoga County, an urban county with significant child poverty, includes Cleveland, to which the state has assigned its own voucher program, and several inner-ring suburbs with concentrations of children from poor families who qualify for the EdChoice Program. The irony in the majority of these school districts is that students taking vouchers out of the public system are students who have never been enrolled in public schools. Students already enrolled in private and religious schools are extracting state dollars out of public school districts serving concentrations of poor students, districts where more money is desperately needed for the students who are enrolled.

Patton concludes:  The Fair School Funding Plan is based on the actual cost of education….  When fully funded, it would help nearly all public schools by boosting the average state per-pupil aid from $6,835 to $8,459…. A predictable formula would create stability and certainty in planning and hiring… The funding for economically disadvantaged students would increase from $272 to $422 per student…. This will help students experiencing poverty and give needed resources to schools that serve communities where poverty is concentrated.” She adds: “The Fair School Funding Plan… would separate charter and voucher funding from the state’s formula funding system… Charter and voucher programs would… be funded through a separate line item in the state budget.”

What Is Holding Up Support for the Fair School Funding Plan in the Ohio Senate When Public Schools Are Desperately in Need?

Here is the problem: Senate President Matt Huffman’s website defines him this way: “President Huffman is devoted to quality school choices for all families, lowering taxes and reducing regulations on Ohio’s small business.”  And the Ohio Coalition for Adequacy and Equity of School Funding quotes Senate Finance Committee Chairman Matt Dolan: “Where a child gets educated is not as important to us as: ‘The child gets educated.'” Huffman and Dolan are committed to marketplace school choice at public expense; neither is committed to public education as one of our most essential community institutions and our mutual obligation to our children.

The All In for Ohio Kids Campaign is all about calling members of the Ohio Senate to uphold the state’s constitutional mandate for adequate public school funding, distributed equitably according to need and considering each school district’s capacity to raise local school taxes. The Ohio Constitution does not provide for diverting public dollars to privately operated charter schools or, as tuition vouchers, to pay for private schooling.