Today is the 25th anniversary of the original Ohio Supreme Court decision in DeRolph v. Ohio. A quarter of a century ago, the Court declared Ohio’s method of school funding unconstitutional because state dollars were inadequate and inequitably distributed. The case was brought back to the Ohio Supreme Court and upheld three more times, but in the ensuing 25 years, Ohio’s flawed school funding system has never been legislatively remedied.
Because state funding was deemed inadequate and inequitably distributed, the Court declared that the entire system was overly reliant on local property tax levies which Ohio requires school districts to put on the ballot. The Court also charged the Ohio Legislature to discontinue a long practice of what the justices called “residual budgeting” and instead to base the per-pupil funding level on what school districts must actually spend to fulfill the state’s commitment, as defined in the state constitution, to a “thorough and efficient’ system of common schools. What is residual budgeting? It is the Legislature’s practice of dividing up the state’s revenues in each biennial budget across all the functions of government, and spending what’s available for K-12 education without consideration of the actual costs of teachers and school counselors or special education or school transportation, or the needs of English learners or the importance of enriched curriculum or school libraries or music and art classes.
The problem in March 2022, on the 25th anniversary of the first of four Supreme Court decisions in DeRolph v. Ohio, is that the legislature has neither chosen to fund public schools sufficiently nor to compensate for differences across local school districts in the amount and type of local property that can be taxed. Ohio school funding remains inadequate and inequitably distributed. School funding continues to depend too much on each school district’s capacity to put school millage on the ballot and on parents’ willingness to mount major political campaigns to pass these levies every few years.
Part of the problem has been a long legislative commitment to tax cuts. In an April 2021 report for Policy Matters Ohio, Wendy Patton examined Ohio’s chronic disinvestment in state funding for public education: “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.” In the most recent FY 2022-2023 state budget, passed by the Ohio Legislature in June 2021, the Ohio Legislature again cut income taxes, this time by $1.7 billion over the biennium.
The new FY 2022-2023 state budget raised some hope for school refunding reform. In the budget, the Legislature passed a brand new Fair School Funding Plan designed to meet the mandates of the Ohio Supreme Court’s four DeRolph decisions. The new plan was developed through a study in which experts tried to figure out a base cost per pupil that would reflect the real costs for school districts. Over a six-year phase-in, the Fair School Funding Plan was supposed to guarantee adequate funding, equitably distributed. Legislators promised it would end residual budgeting and end what, 25 years ago, the Court had condemned as overreliance on local property taxes.
But problems became apparent as last summer wore on. The Ohio Senate refused to pass a law implementing the plan in full, and merely chose to fund the first two years of the plan because state senators said they did not want to tie the hands of future legislatures. It soon became apparent that there was no long-term commitment among many in the Ohio Legislature fully to implement the plan. The Ohio Senate also left out an important provision in the original Fair School Funding Plan—the inclusion of a cost study of the real needs in districts serving concentrations of children living in poverty while at the same time refusing to begin a phase-in of “disadvantage aid” until the second year of the biennium, with a zero percent increase for FY 2022.
The most serious threat to fair school funding in the new Ohio budget for FY 2022 and FY 2023 is that the budget alarmingly expanded school privatization, with the added investment in vouchers and charter schools coming out of the state’s public school foundation budget. In the budget the Legislature raised the state budget for charter schools from $30 to $54 million per year. Legislators also allowed charter schools to locate in any or all of the state’s 610 school districts, while in the past, charter startups had been limited to a group of eligible districts.
But the biggest threat to fair public school funding cames from the myriad ways the budget expanded the state’s investment in one of its largest school voucher programs—EdChoice. Each K-8 EdChoice voucher grew from $4,650 to $5,500; each high school voucher grew from $6,000 to $7,500. The legislature altogether removed any cap on the number of EdChoice vouchers, which had previously been limited to 60,000 total. Students qualify for EdChoice if they live in the attendance area of a public school that ranks in the lowest 20 percent on the State School Report Card Performance Index, but under the budget, all siblings of students who currently have a voucher qualify, wherever they live.
And there’s more. While there used to be a 75 day window for submitting an application for an EdChoice voucher, there is now “a rolling window with no closing date.” Alarmingly, in the new budget the state has begun phasing out the requirement that students must have attended a public school in the year prior to qualifying for an EdChoice voucher. High school students had previously been able to apply for a voucher without prior public school enrollment, but that requirement will have been phased out for all K-12 students by 2026.
A quarter of a century after the Ohio Supreme Court declared Ohio school funding unconstitutional, over 100 public school districts recently filed a second lawsuit declaring that EdChoice vouchers deprive Ohio’s public school districts of essential revenue. Much of the substance of the new lawsuit traces Ohio’s school funding problems to the same old issues—inadequate and inequitable school funding and the resulting overreliance on local property taxes.
In their lawsuit, plaintiffs declare: “The EdChoice Scholarship Program poses an existential threat to Ohio’s public school system. Not only does this voucher program unconstitutionally usurp Ohio’s public tax dollars to subsidize private school tuitions, it does so by depleting Ohio’s foundation funding—the pool of money out of which the state funds Ohio’s public schools… The discrepancy in per pupil foundation funding is so great that some districts’ private school pupils receive, as a group, more in funding via EdChoice Vouchers than Ohio allocates in foundation funding for the entire public school districts where those students reside. This voucher program effectively cripples the public school districts’ resources, creates an ‘uncommon’, or private system of schools unconstitutionally funded by taxpayers, siphons hundreds of millions of dollars of taxpayer funds into private (and mostly religious) institutions, and discriminates against minority students by increasing segregation in Ohio’s public schools. Because private schools receiving EdChoice funding are not subject to Ohio’s Sunshine Laws or most other regulations applicable to public schools, these private facilities operate with impunity, exempt from public scrutiny despite the public funding that sustains them.”
The plaintiffs continue: “Because public funds are finite, funding EdChoice Program Vouchers out of the foundation funding designated for public school districts inevitably depletes the resources designated by the legislature for educating Ohio’s public school students. H.B. 110 (the state budget bill) initially incorporated the salient features of the …Fair School Funding Plan …. However, due to the ballooning effects of the EdChoice program, the enacted version of H.B. 110 funded only up to one-third of the increases required by the proposed Fair School Funding Plan over the next two fiscal years.” “(T)he Fair School Funding Plan was not fully funded due to the ballooning costs of the EdChoice Program. Only 16.67% of the Fair School Funding Plan is being funded through Fiscal Year 2022 and 33% of the Fair School Funding Plan will be funded through Fiscal Year 2023, as specifically delineated in H.B. 110. This means the General Assembly will meet only a fraction of its constitutional obligation, by the standards it has adopted, to provide a thorough and efficient system of common schools for Fiscal Year 2022.”
On this 25th anniversary of the DeRolph decision, Ohio’s legislators continue to flout their responsibility as defined by Article VI, Section 2 of the 1851 Ohio Constitution: “The General Assembly shall make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state; but no religious or other sect, or sects, shall ever have any exclusive right to, or control of, any part of the school funds of this state.”
If you are interested in further exploring Ohio’s school funding dilemma, sign up to attend an Ohio League of Women Voters webinar tonight, March 24, 2022 at 7:00 PM: Fair School Funding: The Unfinished Agenda and How to Win. Register here.