Why the New “Fair School Funding Plan” Matters for One Ohio School District: Will the Ohio Senate Let It Die?

In Ohio, the state senate is refusing even to consider a new school funding plan, developed over a period of several years to replace the old school funding system that has become progressively unworkable over the past decade.  Last Thursday, the Ohio House of Representatives passed the proposed new plan by a huge margin: 84-8.  But the Ohio Senate Finance Committee has not even chosen to hold open hearings on its own companion bill, which was introduced early last month as Senate Bill 376.  The current biennial legislative session will end on December 31, and without consideration by the Ohio Senate and passage by that date, the Fair School Funding Plan will die.

If the Ohio Senate refuses to pass this bill, it will be merely one more piece of proof that the incoming senate president, Matt Huffman, and Matt Dolan, who chairs the senate’s finance committee, are committed to supporting children in private and religious schools with publicly funded vouchers at the expense of the 1.6 million children and adolescents who are enrolled in our state’s public schools.

The testimony I submitted last month to the Ohio House Finance Committee on behalf of the Heights Coalition for Public Education details why passage of the new plan is so important to one school district—the Cleveland Heights-University Heights City Schools, in an inner-ring suburb of Cleveland. Here is that testimony.

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The Heights Coalition for Public Education commends the sponsors in both chambers of the Ohio Legislature for bringing forward the proposed Fair School Funding Plan, defined by Substitute HB 305. The bill’s original sponsors described the new plan’s necessity when it was introduced a year and a half ago: Eighty percent of the state’s school districts, 503 of 610 districts, were capped or had fallen onto guarantee. Today, neither base cost nor categorical state school funding comes close to approximating the actual cost of K-12 schooling in Ohio.

Substitute HB 305 enhances equity, increases the state’s investment in the under-resourced public schools and school districts with concentrations of the state’s poorest children, and ends school district deduction funding for charter schools and tuition vouchers for private school tuition.

We commend the sponsors of the bill for revising the original plan to enhance equity. For measuring local capacity, you have expanded the range of the sliding scale to ensure that the state better distinguishes wealthy school districts from the school districts with low property tax bases or those which struggle to pass levies because their residents are impoverished. And you have increased categorical aid for economically disadvantaged students from $272 per pupil to $422 per pupil, an urgently important change. The purpose of the state school funding plan, in accord with the provisions of the Ohio Constitution, is to create a system that ensures that all children are provided an equitable opportunity to learn. The late political theorist, Benjamin Barber defined educational equity: “Education need not begin with equally adept students, because education is itself the equalizer. Equality is achieved not by handicapping the swiftest, but by assuring the less advantaged a comparable opportunity. ‘Comparable’ here does not mean identical…” (An Aristocracy of Everyone, p. 13)

For many years—through mechanisms like the state report card which rates and ranks school districts; the third grade guarantee; the state takeovers in Youngstown, Lorain, and East Cleveland; and the assignment of charter schools and vouchers, all based primarily on aggregate standardized test scores—Ohio has doled out punishments for schools and school districts that serve concentrations of the state’s poorest children. However, a mass of educational research documents that aggregate standardized test scores for any school or school district correlate with family and neighborhood income and are a poor measure of school quality. In September of 2019, the Cleveland Plain Dealer published a stunning analysis, by the newspaper’s data analyst Rich Exner, of the school district grades awarded by the state of Ohio on the 2018-2019 state report cards. Exner’s bar graphs present a series of almost perfect downward staircases, with “A” grades for school districts in communities with high median income and “F” grades for the school districts in Ohio’s poorest communities. The correlation of academic achievement with family income has been demonstrated now for half a century, but too often Ohio policy has blamed public school teachers and administrators instead of using the resources of government to assist struggling families who need better access to healthcare, quality childcare, better jobs, food assistance, and better resourced public schools.

Substitute HB 305 eliminates school district deduction funding for the state’s vouchers and charter schools, and would, therefore remedy what has become a primary source of inequality in Ohio’s system of funding public schools. Because, in Ohio, students in so-called failing schools qualify for vouchers, and because the siting of charter schools is limited to districts with lower test scores, “school district deduction” funding for these programs punishes the very school districts that serve concentrations of children living in poverty. Not only will vouchers and charter schools drain $2,352,881,306 overall from the budgets of Ohio school districts for vouchers and charters in FY 21 and FY 22, according to William Phillis, executive director of the Ohio Coalition of Equity and Adequacy, but the cost of these school district deductions for vouchers and charters is inequitably distributed across the state’s 610 school districts. School district deduction funding, which is said to provide students an escape from so called “failing” schools, inequitably sucks money out of the local budgets of school districts which serve children who need expensive additional services. Many of these districts also have the lowest capacity to raise local revenue. In many cases, the students carrying away the vouchers have never been enrolled in the districts from which they are carrying away the money.

In a white paper last April , a co-convener of the Heights Coalition, Susan Kaeser explains why specifically the EdChoice voucher program, funded by school district deduction, is inequitable: “The financial burden of EdChoice vouchers is not shared evenly by school districts across the state, punishing some districts and not others. This disparity is made worse by the reality that the majority of students in the districts most affected by vouchers live in poverty and are not white…”

The Heights Coalition advocates for the public schools in the Cleveland Heights-University Heights City School District. whose school district budget has been devastated in recent years by EdChoice vouchers. Why?  First is the clamor for vouchers among a growing community of religious families whose children have never been enrolled in the district’s public schools. The second reason is the increase over the years in impoverished students currently enrolled in our public schools. According to the Ohio Department of  Education’s 2019 Cupp Printout, 99.98 percent of our students are currently designated as disadvantaged.

Here is what the school district deduction for EdChoice vouchers has done to our school district. In a PowerPoint presented to the Cleveland Heights-University Heights Board of Education last month, the school district’s treasurer, Scott Gainer explains that in our school district the number of students claiming vouchers—and the dollars being deducted from our school district’s budget—have grown precipitously. Much of the growth occurred when the Legislature, in the FY 20-21 biennial state budget, expanded eligibility to all students in grades 8-11 in EdChoice designated schools. The amount diverted from our school district budget to EdChoice vouchers has grown from $2,256,017 in 2017;  to $3,232,403 in 2018;  to $4,187,249 in 2019;  to $7,074,249 in 2020;  to $9,017,250 in the current 2020-2021 school year.

Currently 1,792 students are carrying vouchers out of our school district budget at the expense of the 4,810 students enrolled in our public schools. This year EdChoice voucher students are diverting to private and religious schools 45 percent of the school district’s state’s foundation school funding despite that they represent only 27 percent of the combined total of students the state counts as part of the district.

While 1,240 of vouchers granted by the state this year are renewals, which means that the district continues to collect state aid to cover a portion of the cost of each voucher, students applied for 552 new vouchers for this school year—a year when the state budget allocation is frozen at the FY 2019 level. For these 552 students, the district is forced to cover the full cost of their vouchers—$2,566,800—out of the local school district budget.

And while the legislature claims that the vouchers are designed to help students and their families be able to make a choice to leave public schools, Gainer documents that in our school district during the current school year, 1,699 of the 1,792 students carrying the vouchers out of our school district—roughly 95 percent—have never been enrolled in our public schools. In essence, this means that in our school district, and across Ohio, the Legislature is forcing local public school districts to undertake an unexpected expense: paying for private and religious education.

In the DeRolph decision, the Ohio Supreme Court charged the state legislature to create a system that is no longer overly reliant on the passage of local operating millage. Currently in our district, EdChoice diverts 45 percent of state foundation funding out of our school budget and forces our voters to replace this funding with additional local operating levies.

The Heights Coalition for Public Education commends you for considering Substitute HB 305. The Fair School Funding Plan is a comprehensive blueprint which, when funded, will ensure that public schools across Ohio can provide an opportunity to learn for all of our children. We urge you promptly to enact the Fair School Funding Plan.

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Ohio Legislative Leader Rams Through Voucher Changes that Hurt Students in Poor, Title I Schools

This post has been updated.

The Ohio Senate is up to its old tricks.

Five years ago right at the end of a spring session of the Ohio Legislature, a group of state senators added a long amendment to House Bill 70, which was about expanding the number of full service, wraparound community learning centers—schools with medical and social services located right in the school. The amendment had nothing to do with the subject of the original bill. The amendment’s purpose was to establish the state takeover of the school district in Youngstown and set up a procedure for state takeovers of other so-called “failing” school districts. A deal had been cut. No opponent testimony was permitted. The Ohio Senate passed the amended HB 70 and sent it back for quick approval by the Ohio House. Within hours, Governor John Kasich had signed it, and without public input, an appointed Academic Distress Commission supplanted the elected school board in Youngstown.

This time the subject is vouchers.

Last spring, just as everything shut down due to the arrival of the COVID-19 pandemic, both houses of the Ohio Legislature debated changes in the EdChoice voucher program and came up with two separate bills. EdChoice eligibility is currently described by legislators as “performance-based.” The state designates EdChoice schools by these schools’ low ratings on the state’s school district report card, which everybody agrees is flawed. Last spring the program was expected to double in size. At angry hearings, school districts complained because EdChoice vouchers are funded through something called “the school district deduction.” The House plan would have funded the vouchers out of the state budget; the Senate plan kept the school district deduction.

When COVID-19 shut everything down and House and Senate were unable to agree on a plan, a conference committee began quietly meeting. It’s been a complicated year, so everybody was surprised last week when the Columbus Dispatch‘s Anna Staver reported that Matt Huffman, a powerful legislator already elected to be senate president in the new legislative session beginning in January, had announced that the conference committee has a new plan for EdChoice vouchers. On Wednesday of this week, without any public hearings and without any real attempt to explain Huffman’s EdChoice scheme to the public, the Ohio Senate passed Huffman’s new plan as part of Senate Bill 89. On Thursday SB 89 was approved by the Ohio House .

Thank you, Senator Teesa Fedor (D-Toledo) for speaking the truth despite being outvoted. The Ohio Capital Journal‘s Susan Tebben reports that Fedor protested that the new EdChoice plan “does not reflect the public school advocates and the issues they brought forward (last spring). At best, this change is based on arbitrary criteria.”

What Is Huffman’s New Plan?

Here is how the EdChoice program has been working. Schools are “EdChoice Designated” by their scores on the state report card. The state continues to count the voucher students as though they are enrolled in the public schools and gives each voucher student’s per pupil state foundation formula funding to the school district, but then deducts the voucher from the school district’s local budget. The problem is that in all but a handful of the state’s school districts, the cost of the voucher—$4,650 for a K-8 voucher or $6,000 for a high school voucher—is higher than the amount the state gives the school district for that student. EdChoice voucher deductions rob school districts of essential budget dollars. And in the current budget biennium, with state school funding frozen at the FY19 level for all school districts, 100 percent of the cost of newly awarded vouchers is being covered by local school district budgets. Thus EdChoice vouchers reduce local school budgets at the expense of needed programming for the students who attend traditional public schools.

Huffman’s new, revised SB 89 plan passed on Wednesday by the Ohio Senate and accepted by the Ohio House on Thursday, still uses the school district deduction method of funding. But instead of relying on the school district report cards—whose calculation everybody regards as flawed—Huffman’s plan starts by targeting public schools where at least 20 percent of students qualify for federal Title I funding. Title I schools are identified by the federal government because they serve concentrations of students living in poverty. Second,  Huffman’s plan selects the 20 percent of Ohio’s schools scoring lowest on the performance index of the state report cards. Through the combination of these two factors, Huffman’s plan designates the schools which will qualify for EdChoice. The new Huffman plan will designate only 469 schools.  Under the old state report card designation process, EdChoice had been expected to double its current size this winter to 1,229 schools.

Serious Questions about Huffman’s New Plan

Why does Senator Huffman want to extract precious funding from the budgets of school districts that serve concentrations poor students who themselves need smaller classes and more programming in their public schools?  Despite that the Ohio Legislature justifies EdChoice vouchers as a way to help poor students (ignoring considerable evidence—see Christopher and Sarah Lubienski, The Public School Advantage—that private and religious schools are not superior to public schools), the plan hurts the mass of poor students whose public schools are diminished when the vouchers extract money out of their public school’s budget. Tebben quotes State Senator Andy Brenner—among the Legislature’s farthest-to-the-right ALEC members who once dubbed public schools a form of socialism—disingenuously justifying the new plan as a salvation for poor students who attend so-called “failing” schools: “We need to make sure that those students are given a solid education and yes, I would love to see that those students stay in their original, traditional buildings if they could do that… But they’re not learning… They should be allowed that opportunity.”

The situation in the school district where I live, Cleveland Heights-University Heights, an inner-ring suburb of Cleveland, typifies the mistake in the Legislature’s justification.  In the CH-UH school district during the current school year, 1,699 of the 1,792 students carrying the vouchers out of the school district—95 percent—have never been enrolled in the school district’s public schools. In essence this means that in CH-UH, and across Ohio, the Legislature is forcing local public school districts to undertake the unexpected expense of paying for private and religious education. Dispatch reporter, Staver quotes both Senator Huffman and current Senate President Larry Obhoff worrying about private and religious school families who fear losing vouchers as the reason the Senate must hurry up and pass the new plan, but it is the state’s poorest public school students who will lose out under Huffman’s new plan.

Covering Huffman’s new plan, cleveland.com’s Jeremy Pelzer quotes Scott DiMauro, president of the Ohio Education Association, condemning the new plan because it is increasingly targeted to districts serving children in poverty: “Schools that rate low on the state’s performance index are usually in areas of the state with high poverty rates…  We don’t think that’s fair… We don’t think this is a good day for Ohio’s kids.” DiMauro’s assessment is correct. Last March, part of the controversy about EdChoice vouchers was that the Ohio school district report card designation had projected a number of schools in wealthy suburbs becoming EdChoice Designated as the number of Designated schools was set to explode to 1,229.  By limiting EdChoice Designated schools to Title I schools, Huffman’s new plan will protect the local budgets of the outer suburban districts serving wealthy families from EdChoice voucher deductions.

Why did Senator Huffman sneak through a redesigned voucher plan without hearings when the Legislature is currently holding hearings on a carefully developed, bipartisan comprehensive school funding plan that his voucher funding scheme contradicts? Important questions about Huffman’s rushed attempt to pass SB 89 this week arise because the Ohio House and Ohio Senate are currently considering Substitute HB 305 and SB 376, which together constitute a new, comprehensive state school funding system. The Fair School Funding Plan, a bipartisan effort that has undergone two years of analysis, is currently in open hearings, and must be passed by the end of the current legislative session on December 31, 2020 or the process would have to start over again.  The Fair School Funding Plan is designed to rectify an old formula that has stopped working altogether.  A decade of state tax cuts has left the formula underfunded; 508 of the state’s 610 school districts had been operating under caps or hold harmless guarantees until the current biennial budget froze all formula state aid at the FY 2019 level. The new plan identifies growing inequity as a particular problem as the state has failed to help the school districts with the lowest local taxing capacity and the greatest number of impoverished students. If it is adopted, the new Fair School Funding formula would increase state categorical per-pupil assistance for disadvantaged students from $272 per pupil to $422 per pupil.

The new Fair School Funding Plan would also eliminate all school district deduction funding for vouchers and charters. The Ohio House has begun hearing open testimony from public school superintendents, treasurers, parents, and advocates about the dire need for more state assistance.  Even the state’s fast-growing outer suburbs have been suffering under capped funding as they need to hire more teachers. The state’s poorest school districts are desperate. I wonder why Senator Huffman has rushed through a bill to confirm school district deduction voucher funding at the same time the Legislature is considering banning this funding method?

Why is Senator Huffman designating Ohio schools by their Title I status for vouchers that extract local school district funding, thereby directly undermining the purpose of the federal Title I program?  The federal Title Formula program was enacted in 1965 as part of the War on Poverty. Its purpose was federally improving school funding equity by supplementing state funding in the schools serving our nation’s poorest students. Now the Ohio Legislature has passed a plan to use the Title I designation to identify school districts from which state will be diverting funding for EdChoice vouchers for private and religious schools. Ironically and tragically, Ohio Senate Bill 89 will undermine the purpose of Title I by denying opportunity for the students enrolled in the state’s Title I public schools.

Ohio Legislature Looks to Adopt New School Finance Plan During 2020 Lame Duck Session

The Ohio Legislature will waste no time before trying to enact—before the end of the current legislative session at the end of December—a Fair School Funding Plan, which was proposed in the spring of 2019. The Ohio House has been holding hearings for months on what, this week, became Substitute House Bill 305. Last week Senate Education Chair, Peggy Lehner, and 14 additional co-sponsors introduced a companion bill, Senate Bill 376.

The Columbus Dispatch‘s Catherine Candisky summarizes the Ohio Legislature’s attempt to move forward immediately to pass the new school funding blueprint: “A bipartisan group of state lawmakers on Friday unveiled a complex and long-sought overhaul of Ohio’s school funding system that would provide another $1.99 billion a year—about a 24% increase—to K-12 schools when fully implemented. The proposal to change the way state aid is calculated and distributed to public schools establishes the per-pupil cost of ‘a quality education,’ and determines how much funding each local community should be able to cover itself and how much should come from the state. It aims to keep overall funding levels relatively even across the state despite widely varied tax bases across Ohio’s more than 600 school districts.”

The term-limiting of several of the plan’s co-sponsors is accelerating the timeline for seeking the bill’s passage before the end of 2020.

Here is the primary reason why a new school funding plan is needed in Ohio. Materials released when the new funding plan was introduced in the spring of 2019 showed that before the current biennium, in 503 of the state’s 610 school districts, state school funding was capped or the district had fallen onto a hold-harmless guarantee. Then the current biennial budget for FY 2020-2021, froze the state’s contribution to state foundation school funding at the FY 2019 level with no increase to cover normal inflation.

The purpose of a state school funding plan, in accord with the provisions of each state’s constitution, is to create a system ensuring that all children, no matter where they live, are provided an equitable opportunity to learn. The late political theorist, Benjamin Barber defined educational equity: “Education need not begin with equally adept students, because education is itself the equalizer. Equality is achieved not by handicapping the swiftest, but by assuring the less advantaged a comparable opportunity. ‘Comparable’ here does not mean identical…” (An Aristocracy of Everyone, p. 13)

The Fair School Funding Plan Would Make Ohio School Funding More Equitable

The plan the Ohio Legislature now hopes to pass has been modified from an earlier version to enhance equity.  It directs additional funding to the state’s poorest school districts, particularly those in urban areas where poverty is concentrated. The plan was developed through a comprehensive costing out study to establish an ongoing method for defining the per-pupil base cost, which the formula then modifies through a calculation of each school district’s local capacity to raise school revenue. Local capacity in this plan combines two measures: (1) each school district’s local property valuation and (2) the income of the school district’s residents (as a proxy for their capacity to vote to pass local levies). Modifications to the original plan have expanded the calculation that divides the state’s school districts into five tiers based on local school district wealth categories. Very significantly, the revised plan increases categorical aid for economically disadvantaged students from $272 per pupil to $422 per pupil.

The Fair School Funding Plan Eliminates School District Deduction Funding for Charters and Vouchers

The Fair School Funding Plan does nothing to reduce the extensive school privatization that already exists in Ohio.  Ohio’s original school voucher program is the second oldest in the country, and the legislature has multiplied the number of statewide school voucher programs at public expense.  Neither does the new plan control the number of charter schools nor does it enhance regulation of what has proven to be a charter sector filled with conflicts of interest and fraud.

However, the new plan significantly shifts the funding mechanism for some of these programs. In Ohio, while some of the voucher and charter programs are currently funded out of the state budget, the legislature has recently expanded the funding of statewide EdChoice vouchers by deducting dollars right out of school districts’ local budgets for students to carry away in vouchers for private school tuition.

In the current biennial budget, passed in the summer of 2019, the Legislature expanded EdChoice vouchers by adding new grade level cohorts of students who qualify in designated schools and also by expanding the number of schools the state deems “EdChoice designated.” Because the burden of EdChoice falls most heavily on public school districts serving poor children, the expansion of EdChoice, which is funded by the local deduction method, poses serious equity concerns, by extracting essential dollars that could otherwise be used for reducing class size and hiring counselors, social workers, school nurses, and librarians.

The proposed Fair School Funding Plan eliminates the school district deduction funding mechanism for the state’s vouchers and charter schools and would, therefore, remedy what has become a primary inequity in Ohio’s system of funding schools. Here is the sponsors’ explanation of Substitute HB 305: “‘Enrollment’ used in HB 305 means the number of students actually being educated by the district. Students attending community schools (Ohio’s name for charter schools), other schools through one of the state scholarship programs (Ohio’s name for vouchers), or court-placed in schools outside the district of residence would be counted for funding purposes in the school where they are being taught. Students open enrolling into a district also would be counted as students of the district where they are taught.  In all of these instances, funding would go directly (from the state) to the educating entity.”

The Fair School Funding Plan’s elimination of the school district deduction as the funding mechanism for privatized vouchers and charter schools  is one of the urgently important reasons for the Legislature to pass Substitute HB 305 and SB 376.  Recently the Executive Director of the Ohio Coalition for Equity and Adequacy of School Funding, Bill Phillis documented that in FY 21 and FY 22, “$2,352,881,306 will be deducted statewide from local school district budgets for vouchers and charters.”

In the Cleveland Heights-University Heights City Schools, the district where I live, the amount of the local school district deduction for EdChoice vouchers has grown explosively: from $2,256,017 in 2017;  to $3,232,403 in 2018;  to $4,187,249 in 2019;  to $7,074,249 in 2020;  to $9,017,250 in the current 2020-2021 school year. This year students with vouchers are carrying away 45 percent of the school district’s state foundation funding to pay private and religious school tuition. Ninety-five percent of the students carrying vouchers out of the CH-UH public school budget this year have never been enrolled in the district’s public schools. In essence, this means that in the CH-UH school district, and across Ohio, the Legislature has been forcing local public school districts to undertake an unexpected expense: paying for private and religious education. 

Will the Ohio Legislature Raise the Funds to Pay for a Six Year Phase-In of the Fair School Funding Plan?

The caution about the new plan is that sponsors call it a blueprint, but they are clear that it will not come with immediate funding appropriations to cover the cost.  A six year phase-in is anticipated.

Funding the new plan will pose a major challenge as, after a decade of tax cuts during Governor John Kasich’s tenure, the state lacks the necessary revenue to cover the cost of the new plan. The worry about funding is complicated by projections, reported last Friday by the Plain Dealer‘s Jeremy Pelzer, that Ohio will face a state budget shortfall in the current fiscal year of $2 billion (before June 30, 2021) due to the COVID-19 recession which is expected to continue and perhaps intensify unless the pandemic can be brought under control through testing and contact tracing until a vaccine is widely available. Late last spring, after the pandemic caused business shutdowns and widespread layoffs, Governor Mike DeWine was forced by a recessionary collapse in state revenue to cut $330 million out of the already appropriated FY 20 state K-12 education funding. This money, which school districts had already allocated for specific expenses, disappeared before June 30.

Despite Worries About Paying for the 6-Year Phase-In, the Legislature Should Adopt the Fair School Funding Plan.

Despite concerns about how the Legislature will fund the six-year phase-in of the plan, it is important that a bipartisan coalition of Ohio legislators has come together to create a blueprint school funding formula, which would fulfill the Legislature’s obligation under the state constitution to provide all of Ohio’s children equal access to educational opportunity. It will be up to the public to support the full funding of the new plan.