On 25th Anniversary of Ohio’s “DeRolph” Decision, Expansion of Vouchers Has Only Exacerbated School Funding Inadequacy and Inequity

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.

Five Reasons Why the Lawsuit Filed by Over 100 School Districts to End Ohio’s EdChoice Vouchers Is So Urgently Important

As I listened to a webinar last week about the Vouchers Hurt Ohio lawsuit filed by more than 100 school districts to demand that the court finds our state’s EdChoice Voucher program unconstitutional under the Ohio Constitution, I challenged myself to name five succinct reasons this lawsuit is so urgently important.  Here is my five point argument against Ohio’s EdChoice Vouchers.

First — EdChoice Vouchers were premised on a false assumption—that standardized test scores are a measure of school quality.

In fact aggregate standardized test scores reflect primarily our society’s family economic inequality from school district to school district. In the fall of 2019, the Plain Dealer’s data wonk, Rich Exner, created a series of bar graphs to demonstrate the almost perfect correlation of school districts’ letter grades on the state school district report card with family income.  Standardized test scores are not a good measure of school quality.

By basing voucher eligibility for students on their school’s low standardized test scores as reflected in the state school report cards, legislators who initiated the voucher program premised the idea of vouchers as an escape route for students from public schools instead of developing a strategy to support the public schools that serve our state’s poorest children.

In research summarized in a newsletter last October describing the National Education Policy Center’s new Price of Opportunity Project, NEPCs executive Director Kevin Welner explains that school achievement gaps as measured by standardized tests instead reflect larger opportunity gaps:  “Those of us who work in or with schools never question the enormous impact that a teacher or school can have on a student. But this essential truth coexists with another truth: that differences between schools account for a relatively small portion of measured outcome differences. That is, opportunity gaps in the U.S arise primarily outside of schools. This should not be a surprise. Poverty, concentrated poverty, and racialized poverty are pervasive features of America. School improvement efforts cannot directly help children and their families overcome decades of policies that perpetuate systemic racism and economic inequality. When children are born in the United States, their educational and life outcomes can all be predicted based on their parents’ education, income and wealth. Compared to the Scandinavian countries and other so-called Western democracies like Canada, Spain, Australia, and New Zealand, American children are inordinately trapped in intergenerational poverty. Inequality in the U.S. is stark and enduring.”

Second — Ohio school districts serving masses of poor students lose urgently needed school funding to vouchers. The students who remain in district public schools suffer program losses when other students extract essential school funding to pay private school tuition.

In Ohio, EdChoice Vouchers, funded by school district deduction, have taken money year after year from the budgets of local school districts serving masses of Ohio’s poorest children. Until last summer’s budget bill, the Legislature made the school districts themselves pay for the vouchers out of their local budgets and therefore increase class size, or cut the number of counselors and school nurses, or shutter the school library in the public school.  At last week’s Vouchers Hurt Ohio webinar, Cleveland Heights-University Heights school board member, Dan Heintz, explained that of the 22 Ohio school districts most severely penalized by the EdChoice Voucher program, all 22 are majority poor, and 19 are majority African American. In these school districts which desperately need increased services for their students, the loss of school funding to vouchers has pared down programming for the students who remain in the public schools.

Third — Many school districts lose more money to vouchers than they receive for voucher students in state foundation basic aid.

The state has awarded to the local school districts basic foundation aid for each of the voucher students, but the amount of each voucher in many cases has significantly exceeded the amount of per-pupil state aid coming to the district. In many of these districts which primarily serve students in poverty, the state has been extracting more money for each voucher student to carry out of the school district budget than it spends on each student who remains in the district’s public schools.  Many of the students taking vouchers out of the school district budget have never been enrolled in the district’s public schools and have always attended private schools. Heintz reminded viewers that in his district, 95 percent of students taking vouchers have never been enrolled in the school district.

The lawsuit, as filed, delineates the losses in public school funding for Heintz’s district, one of the plaintiff districts: “The Cleveland Heights-University Heights City School District… is expected to receive from the state of Ohio a total of approximately $5.6 million in foundation funding for Fiscal Year 2022 to educate the 5,000 students who attend its schools. The state of Ohio, however, will pay out over $11 million for private school tuition to the approximately 1,800 EdChoice Voucher recipients residing within the Cleveland Heights-University Heights City School District in Fiscal Year 2022. In other words, approximately twice as much public funding will be paid in Fiscal Year 2022 for private school tuition for CH-UH residents as the foundation funding allotted to the entire student body of the Cleveland Heights-University Heights District.”

Fourth — EdChoice Vouchers have exacerbated white flight.

In a number of school districts, EdChoice vouchers have accelerated racial segregation, as white students have taken the vouchers to attend private schools.  At the press conference where the lawsuit was announced, a member of the Richmond Heights Local Schools Board of Education, Nneka Jackson explained how, in her Cleveland suburban school district, EdChoice Vouchers have increased racial isolation: “If someone tells you this is about helping poor minority children, hook them up to a lie detector test ASAP and stand back because the sparks are going to fly… About 40 percent of Richmond Heights residents are white. Before the EdChoice private school voucher program, about 26 percent of the students in the Richmond Heights School District were white and 74 percent were students of color. Today, after EDChoice, Richmond Heights is three percent white and 97 percent students of color. Private schools are allowed to discriminate, plain and simple, based on disability, disciplinary records, academic standing, religion and financial status. These are often proxies for race and other protected characteristics. Ohio is essentially engaged in state-sponsored discrimination in admissions and retention. You know who can’t do this? Public schools. Common schools.”

Fifth — By expanding the EdChoice Voucher program in the FY2022-2023 state budget, the legislature made it impossible to fully phase in the new Fair School Funding plan it passed in the same state budget.

The state ended school district deduction finding for EdChoice Vouchers in the FY 2022-FY2023 state budget and will fund the vouchers out of the state’s public school foundation budget.  In the very same the FY 2022-FY2023 state budget, the legislature passed a new Fair School Funding Plan. By expanding EdChoice Vouchers, the state has rendered itself unable to fully phase in the Fair School Funding Plan.

The lawsuit declares: “Under House Bill 110, in the state budget bill recently passed by the General Assembly, effective June 30, 2021, the EdChoice Program has been greatly expanded both in terms of eligibility for the EdChoice Program and its scope. Indeed, HB 110 eliminates previous limits on the number of EdChoice Program vouchers the Ohio Department of Education can approve… 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… HB 110 initially incorporated the salient features of the… Fair School Funding Plan, a bipartisan effort to fund Ohio’s public schools adequately and equitably as required by the Ohio Supreme Court in DeRolph v. State…. However, due to the ballooning effects of the EdChoice Program, the enacted version of HB 110 funded only up to one-third of the increases required by the proposed Fair School Funding Plan over the next two fiscal years.”

The Vouchers Hurt Ohio lawsuit challenges a state program that has exacerbated systemic racial and economic injustice.