Release of school rating data by the Ohio Department of Education shows that state education law is stacked against Ohio’s urban school districts. Even though five of the eight urban districts – Akron, Canton, Cincinnati, Columbus and Toledo – have been graded at or above Continuous Improvement for the second year in a row, urban districts are unable to check the growth of charters. This continued uncontrolled expansion destabilizes funding and enrollment for districts, undercutting their ability to address the needs of children in our cities.

The Toledo Blade

Ohio’s new two-year budget slashes state aid to traditional public schools, while it authorizes more charter schools. Yet recent research and litigation make clear that state government continues to do a lousy job of regulating the charter schools that already operate in the Toledo area and across Ohio.

That doesn’t add up. And it won’t until elected officials are prepared to apply the same performance and accountability standards to charter schools that they demand of traditional ones, even at the risk of offending some campaign donors.

Gov. John Kasich and many state lawmakers, most of them Republicans, are strong advocates of charter schools. They say such schools can provide better education at less cost, because they are unshackled from many of the rules that govern traditional schools.

Advocates argue that charter schools also provide needed competition in education and enhanced student choice. Although most Ohio charter schools are operated by for-profit businesses, they are subsidized with taxpayer dollars.

Last year, Ohio’s 330 charter schools enrolled 94,000 students and collected $680 million in state tax support. Students who live in Toledo attend 44 charter schools, some of them online or outside the city — a major factor in Toledo Public Schools’ rapid enrollment decline and funding problems.

The new state budget lifts the previous ceiling on the number of charter schools, while ostensibly imposing tougher accountability measures. But lawmakers rejected meaningful standards in favor of weak ones.

A new study by Policy Matters Ohio, a nonpartisan research organization, notes that state education officials declared 45 percent of charter schools in “academic emergency” or on “academic watch” last year — designations that indicate poor performance. Yet the group calculates that the supposedly tougher standards in the new budget apply mostly to smaller sponsors that oversee just 14 percent of charter schools.

Policy Matters Ohio notes that charter schools’ growth in troubled urban districts such as Toledo remains “unchecked and unexamined.” Allowing students in such districts to move from poor-performing public schools to poor-performing charters does them few favors.

At the same time, a judge in Franklin County ruled this month that White Hat Management of Akron, one of the state’s largest private operators of charter schools, must give the governing boards of those schools more information about how it spends public money. That includes details about teacher pay, textbooks and equipment, school property, and lobbying expenses. Such data, the judge made clear, are public records.

White Hat’s president, David Brennan, is a major contributor to Republican political campaigns in Ohio. Lawmakers rejected budget changes Mr. Brennan and other for-profit charter operators sought that would have weakened charter school oversight. But the new standards they did enact don’t go nearly far enough.

Genuinely useful standards would include stronger scrutiny by the state Department of Education and local sponsors, to prevent poor-performing companies from setting up new charter schools. They would encourage public school districts and charter operators to work more closely together, instead of in zero-sum competition for students and the state tax dollars that follow them.

Some Ohio charter schools have fulfilled the academic promise that their supporters predicted. Too many have not. The ratio will improve when all schools, publicly or privately run, that accept public money are held equally accountable for how they spend it and the results they produce.

Full Article (PDF version)

The Cleveland Plain Dealer

The state of Ohio says you don’t get anything for free — not even free 
money, $176.3 million worth from the federal government to expand benefits for jobless 
Ohioans.

Saying it fears long-term entanglements, Ohio let the deadline pass Monday without
applying for the money, which could have gone toward offering unemployment benefits
while residents were in approved job training programs, or while they sought only part-time
work.

Or Ohio could have used the money to give more aid than it does now to jobless residents
with children. As a fourth option, it could have expanded benefits to people who had to
leave their jobs due to domestic violence, a spouse’s job transfer or illness of an immediate
relative.

The state would have had to pick two of these uses for the money, which would come from
the American Recovery and Reinvestment Act of 2009, which provided $7 billion nationwide
for expanded unemployment benefits. But the state legislature, with clear signals from Gov.
John Kasich’s administration, let the application deadline expire Monday without action.

This put Ohio at odds with at least 33 other states, including Utah, Georgia and South
Carolina.”It would create new costs,” said Ben Johnson, spokesman for the Ohio Department of Job
and Family Services, or ODJFS, which administers the state’s unemployment compensation
program. “It would be expanding benefits based on a one-time infusion of money.”

Ohio is already $2.6 billion in debt to the federal government for money it needed to
continue its regular unemployment program, Johnson said. He said the state did not want to
risk adding new costs by expanding programs it then would have to continue — at state
expense — after the federal money ran out.

These and other details are in dispute.

Advocates for laid-off Ohio workers say that while states had to agree in their applications
to no “sunsets” on expanded benefits, state legislatures could repeal their agreements as
soon as a year later if the programs cost too much. U.S. Department of Labor officials have
said as much.

The stimulus money will pay for about four years’ worth of expanded benefits, and “a lot of
states have taken the position of taking the money and setting up a study commission” to
look at the cost after a few years, said Rebecca Dixon, a policy analyst for the National

Employment Law Project.
Ohio Sen. Joe Schiavoni, a Democrat from Canfield, had a bill to do just that but it never
got traction.

“It is a shame that this deadline has passed, because this is funding that could have helped
unemployed Ohioans and their families,” Schiavoni said in a statement.

As recently as June, ODJFS officials supported applying for the federal program, calling it
“an extraordinary opportunity” with only “modest drawbacks.”

Asked why the state changed its mind, Johnson said, “That was kind of an initial study of
what modernization could mean, but ultimately we decided not to move forward.”

The primary factor, he said, was the existing debt and fear that future obligations would only
compound it.

But critics of the state’s decision say the federal money could have helped the state deal
with the debt. The state could have obtained the money quickly but would not be obligated
to start spending it for a year. In the meantime, while revenues are down, it could have
used some of the money toward debt reduction or interest payments, Dixon said.

The money also might have helped postpone unemployment-tax hikes that employers will
soon face, while providing jobless residents with training opportunities, said Zach Schiller,
research director for Policy Matters Ohio, a think tank that deals with economic and social
issues.

“These are things that the state should be trying as a matter of sound policy,” Schiller said.
“These are not things that are being pushed on us as part of ‘big government.’”

Business groups were interested in the modernization potential of the unemployment
system, with a chance to smooth out existing program inequities and improve job training.

But businesses also saw problems with accepting the federal money and deciding on the
expanded focus of unemployment programs.

“The problem was, you couldn’t get the right mix in terms of looking at these,” said Andrew
Doehrel, president and CEO of the Ohio Chamber of Commerce. Doehrel said he, too,
worried about the prospect of long-term state obligations, even while knowing that the
General Assembly could always repeal the new programs if they became burdens. That
relies on a state legislature whose makeup and disposition cannot possibly be known, he
suggested.

“You tell me where the legislature’s going to be three years from now and maybe I’ll be
more comfortable with it,” Doehrel said.

Full Article (PDF version)

WKSU

A new study from Case Western Reserve University says auto parts suppliers will have 
to take the — quote — “high-road” in manufacturing if they expect to survive. WKSU’s 
Kabir Bhatia has more on the nuts and bolts of what that means for the way one of 
Ohio’s biggest industries does business…

Ohio parts suppliers are getting squeezed on the low end by China and Mexico,
and on the high end by Germany and Japan. And the Case study says, since they
can’t continue competing on price, they need to invest more in worker training,
research and efficiency. Only about 20 percent of U.S. manufacturers are doing
that now, says Susan Helper, who headed the study. But those who did were
better equipped for the last recession, and may be better prepared for the next
one.

“(HELPER)…They saw less of a sales decline during the automotive crisis. They
also have a number of indicators that suggest they’re going to do better in the
future, because a greater percentage of their products are new or innovative, as
opposed to being older products in which they have a lot of competitors…”
She says success requires improved supplier relations, too. For example, the
company making car doors can’t afford to be overly stingy with the company supplying
door handles.

“(HELPER)…That’s not necessarily to just reduce the price. If all you’re doing is
squeezing the margin of the supplier below you, then that’s going to have
medium- and long-term impacts because nobody’s going to have the money to
invest.”

The Weatherhead School of Management at Case looked at one thousand secondand third-tier auto-parts
suppliers across the county. Those are the ones employing fewer than 500 people. They also do not supply
the automakers directly, as first-tier suppliers do.

Full Article (link to site)
Full Article (PDF) 

Associated Press

As Ohio faced Monday’s deadline to expand unemployment benefits and receive $176 million in federal stimulus money, state officials had not applied for the money and the General Assembly had not scheduled any sessions to take any action.

The federal government set aside $7 billion for unemployment compensation for states that broaden their unemployment programs. The provision is part of the American Recovery and Reinvestment Act.

“The idea was to reward states who update laws to increase access to benefits,” said Wayne Vroman, an unemployment compensation expert under contract with the Ohio Department of Jobs and Family Services.

But Gov. John Kasich says it makes no sense for the state to make long-term changes to a fiscally-damaged system for a one-time payment, spokesman Rob Nichols said. And the jobs department, which administers the state’s unemployment compensation system, is not seeking any changes, department spokesman Ben Johnson said.

“We don’t feel it’s wise to expand benefits at a time when the trust fund is already $2.6 billion in debt,” Johnson said.

Sen. Joe Schiavoni, D-Canfield, introduced a bill that would allow Ohio to receive the money by providing benefits to workers who leave their jobs for family reasons and by extending benefits to people in approved job training. But his bill never came to a vote.

Senate President Tom Niehaus, R-New Richmond, who determines which bills are called in the Senate, was concerned that costs of the long-term changes could outweigh the benefits of one-time funding, spokesman John McClelland said.

Ohio’s unemployment compensation program provides short-term income to unemployed workers who lose their jobs through no fault of their own. The weekly benefit is typically half the worker’s previous wages up to a set maximum, based on the number of eligible dependents. Benefits may be paid for up to 26 weeks — longer for those who lose their jobs before Dec. 31.

Tamara Chavis, 43, of Columbus relies on unemployment compensation to support her four children. She said she thinks the state should “definitely” take action to expand benefits and net the federal dollars.

“We’re going to need the benefits to be extended until we get back on our feet,” Chavis said. “It’s just a no-brainer.”

Chavis worked in property management and leasing for seven years until the real estate market collapsed and left her unemployed last year. Now she spends time updating her resume and looking for job openings at the Central Ohio Workforce Investment Corporation, a nonprofit that works to pair employers with the unemployed. Expanded benefits could allow her to receive more money to care for her children.

So far, 40 states have changed their unemployment compensation systems to receive the federal money, according to the U.S. Department of Labor. Of those, Ohio and five others applied for only one-third of their share of the $7 billion. Ohio received its third — $88.2 million — after changing how it calculates benefits by incorporating a worker’s most recent earnings.

To receive the remaining two-thirds, the state would have to choose two options from among several: Allow people seeking part-time work to qualify for benefits, extend benefits to those in approved job training programs, increase the allowance for dependents, and provide benefits to people who leave work for certain family reasons, such as domestic violence or transfer of a spouse.

Proponents say the changes are necessary so more Ohioans have access to benefits while they get back on their feet.

Zach Schiller, research director for the think tank Policy Matters Ohio, said the changes would modernize the system for today’s economy.

“One-fifth of Ohio workers are part-time. It’s becoming more regular, with the bulk of part-time workers being women,” Schiller said. “Workers also need more retraining nowadays.”

Schiller said the $176 million would help Ohio pay back money the state has borrowed from the federal government since 2009 to keep benefits flowing during tough economic times. He said the funds could reduce the state’s interest payments by $7 million annually. As for the argument that Ohio would be stuck paying more in the long term, he doesn’t buy that.

“Congress didn’t want states to grab the money and run, so it didn’t allow them to sunset benefits,” Schiller said. “But it also didn’t require a specific time period for those to be maintained.”

Schiller said Ohio’s General Assembly could review the changes after a few years and decide to keep, modify or repeal them if they were too expensive.

Taxes on employers pay for unemployment compensation. Last year, employers paid $1.16 billion to the state, Vroman said. Estimates for an expanded system are uncertain, but it could cost businesses up to $30 million annually, he said.

Ohio Chamber of Commerce President Andy Doehrel said businesses aren’t necessarily opposed to expanding benefits. He said the chamber is in favor of certain provisions, such as providing more money for unemployed people with dependents.

But, he said, “We would want to be very, very aware of the long-term impact on the system. Some of these (changes) could run billions of dollars a year.”

Meanwhile, Ohio’s unemployment rate has been rising. It was 9 percent in July, up from 8.8 percent in June — the second monthly increase after a two-year decline. In the week ending Aug. 13, Ohio had 529,000 unemployed workers and 213,000 of them getting unemployment benefits.

Full Article (link to site)
Full Article (PDF) 

The Budget and You - What are the real costs of state budget cuts? Northern Ohioans for Budget Legislation Equality (NOBLE) sponsors a conversation Thursday night, August 11 at 6:30 pm at Trinity Cathedral (2230 Euclid Avenue), on how local services- child care, mental health, education, disability services and more will change under the new budget. For more information, contact BrianL@MerrickHouse.org.

Bring Back Awesome - On Saturday, August 20, we’ll be standing up in Columbus for good jobs and strong communities. Join a coalition of community, labor, civil rights, and environmental groups (plus Grand Funk Railroad, Nikki Giovanni, Over the Rhine and the Ohio Players) at the Ohio State Fairgrounds for the day-long Stand Up For Ohio Festival. Because, if we don’t bring Ohio’s awesome back, who will?

Building Assets - On September 7 and 8, the 2011 Ohio Benefit Bank Community Meeting and Training will give providers, nonprofits and others information on public assistance, free tax preparation, student aid enrollment and asset building. With Keynote speaker Richard Cordray, former Ohio Attorney General and recent nominee to head the United States Consumer Financial Protection Bureau. Click here for more information and to register.

Calling All Policy Liaisons - We are looking for a Columbus-based Policy Liaison focused on asset building and state budget outreach, to raise the visibility of our state policy work to new levels. Click here for a full announcement, and spread the word…

That’s all!
The Policy Matters Team

JobWatch Returns - Last week, Policy Matters re-launched our monthly JobWatch report series in partnership with the Economic Policy Institute, analyzing employment in Ohio. Our August report finds Ohio on a slow slog toward recovery. Since the Great Recession ended in June 2009, the state has added only 62,500 jobs. The report shows that to return to pre-recession employment levels within three years, Ohio must add 10,000 jobs per month. Stay tuned for updates on job loss and gain, as this series continues.

Quantity Over Quality - Last week’s policy brief showed that changes to educational funding and expansion of charter and voucher schools in the new state budget add up to a missed opportunity to increase school standards across the board. New accountability measures are targeted toward sponsors that oversee fewer than 15% of the state’s charters, while 45% of the state’s charters were on “academic watch” or in “academic emergency” in 2010. The bill will continue unchecked growth of charter schools in challenged urban districts and increase the number of districts where start-ups are permitted, without adding requirements for reviewing academic track records of potential operators.

Who Will Save the Safety Net? - This Wednesday, August 24 from 3:00-4:00 pm, Wendy Patton will be presenting as part of ‘Deficit Reduction’ Isn’t Going Away, a webinar sponsored by Advocates for Ohio’s Future. Join Patton, and experts from Voices for Ohio’s Children, the Center for Community Solutions, UHCAN Ohio, and the Ohio Association of Second Harvest Foodbanks, as they delve into the importance of federal budget advocacy. As a group, we will work on a shared messaging strategy, to help frame conversations about social services that need to happen in our communities during these critical coming months. Click here to register, and please spread the word!

That’s all,
The Policy Matters Team

Gongwer News Service

A new policy brief from nonpartisan research group Policy Matters Ohio reports that the charter and school-choice changes in the biennial budget (HB 153 ) do little to strengthen the quality of privately operated charter and voucher schools that are publicly funded.

“State lawmakers have missed yet another opportunity to adopt a high-standards approach for all schools,” Policy Matters Senior Researcher Piet van Lier said. “Instead, they’ve continued Ohio’s quantity-over-quality approach to charters and vouchers, an approach that has not served our children well.”

The group says the budget bill’s new accountability measures for charter school sponsors are too weak to have a significant impact and will likely target smaller sponsors that oversee fewer than 15% of the state’s charters, even though 45% of charters were rated in “academic watch” or “academic emergency” last year.

The bill expanded the number of districts where start-up charters can be created, and state law continues to allow “unchecked and unexamined” growth of charters in districts considered challenged, the brief says.

The new law also fails to add a requirement that sponsors or the Department of Education carefully evaluate schools and operators before they are approved, such as by imposing stricter criteria relating to operators’ academic track records.

“Because the legislature did nothing to raise the bar for entry into Ohio’s charter sector, it’s still too easy for deep-pocketed management companies, many of them for-profit, to open new charters,” Mr. van Lier said. “Profit-seeking operators or those unprepared for the challenges of running a school end up playing games of chance with the futures of too many Ohio children.”

Policy Matters said the quadrupling of Educational Choice vouchers available to let students in failing schools attend private ones with state funding covering tuition was done without a thorough evaluation of the existing program. (See separate story)

“Ohio has a reputation nationally as a state that puts too much faith in the free-market when it comes to charter and vouchers,” Mr. van Lier said. “This budget bill continues our state down this risky path. It’s not too late for policymakers to change course, but the trend is in the wrong direction.”

Ohio is Still Suffering in the Wake of the Great Recession

Ohio employment continues to make month-to-month gains in the number of
nonfarm jobs, but they still leave the state far short of making up for the losses in
the past two recessions. Data released by the Ohio Department of Job and Family
Services (ODJFS) from its survey of employers for July 2011 suggest that the state
continued to gain jobs. However, a separate survey of households indicated that
unemployment is growing.

Full Report

“Gov. Kasich and the Republican-dominated legislature have foregone the popular option of closing tax loopholes that amount to $7 billion annually in this state.”

State Rep. Dan Ramos says loopholes the GOP left in Ohio’s tax laws cost $7 billion a year

The Cleveland Plain Dealer

In a newspaper opinion piece published last month, Ohio Rep. Dan Ramos said Gov. John Kasich and the General Assembly needlessly neglected the state’s needs through their approach to balancing the budget.

“Gov. Kasich and the Republican-dominated legislature have foregone the popular option of closing tax loopholes that amount to $7 billion annually in this state, choosing instead to balance the budget entirely by selling public assets, cutting local funds and eliminating thousands of jobs,” the Lorain Democrat wrote.

That drew the attention of PolitiFact Ohio. Loopholes and tax breaks are usually mentioned in relation to federal taxes, not those at the state level. And $7 billion almost equals the deficit that was projected as lawmakers worked on the state budget for 2012-13.

We asked how Ramos came up with that figure. His office referred us to two sources: a report by Policy Matters Ohio, a liberal think tank, and the Tax Expenditure Report prepared by the Ohio Department of Taxation.

The Tax Expenditure Report is issued as a companion to the governor’s executive budget. It looks at the impact of tax expenditures, which are the credits, deductions and exemptions in the tax code that reduce the amount of revenue the state would otherwise receive.

“Tax expenditures result in a loss of tax revenue to state government, thereby reducing the funds available for other government programs,” the report says. “In essence, a tax expenditure has the same fiscal impact as a direct government expenditure.”

But “unlike direct budgetary expenditures, unless there is a pre-existing termination date, tax expenditures may remain in effect indefinitely with little or no scrutiny by policy makers.”

This year’s report estimated that the credits and exemptions will amount to more than $7 billion in foregone revenue in both fiscal years 2012 and 2013. The report counts 128 tax expenditures — an increase from 122 in the previous two-year budget.

While estimating their dollar value, the report offers no conclusions about the worth and validity of the tax expenditures. That’s the responsibility of the General Assembly and the governor, although — as the report noted — no continuing or periodic review is required.

Lawmakers supporting the tax credits and exemptions say they are most often intended to spur economic development.

Policy Matters Ohio proposed in its report that the General Assembly set a target of reducing tax expenditures by 10 percent.

“We’re not saying that you can just get rid of them all,” the group’s research director, Zach Schiller, told us.

Some, he noted, are exemptions valued by the public, such as one that exempts purchases of prescription drugs from sales tax.

“But you can cut sizable amounts,” he said.

For example, he noted, a cap on the sales tax paid by buyers of shares in jet aircraft is estimated to be worth $1 million. And retailers who collect the state sales tax get a discount on what they collect, if they send in the tax by the due date of the tax return, a windfall for big retailers.

“But the $7 billion doesn’t cover everything by a long shot,” Schiller said, because the Tax Expenditure Report counts only items that would have been taxable if not specifically exempted. While the sales tax covers the sale of all goods that haven’t been exempted, it covers only services that are specifically named.

“Hiring a lobbyist, for example, does not involve paying sales tax because it wasn’t written into the law,” Schiller said. “To me, that’s a tax break,” even though it does not count as foregone revenue.

Three years ago, Policy Matters Ohio listed “a dozen tax breaks Ohio can do without.” noting that payday lenders and mortgage brokers were given a lower state tax rate than banks; that debt collectors, like lobbyists, don’t have to bill clients for sales tax, and that a measure approved by the General Assembly made it easier for high-income individuals who spend part of the year out of state to avoid Ohio income tax.

Just those tax breaks cost the state more than $65 million a year, the group said.

Let’s get back to the statement we questioned: “Gov. Kasich and the Republican-dominated legislature have foregone the popular option of closing tax loopholes that amount to $7 billion annually in this state.”

Ramos was accurate in writing that tax exemptions and credits amount to $7 billion a year in Ohio — though referring to them as “loopholes” adds a negative connotation that is not uniformly justified.

We found that this year’s budget process increased the number of tax expenditures, rather than limiting them.

But we think it is important to note that even critics of the tax breaks don’t recommend cutting all of them — a point that helps provide clarification. Limiting tax breaks, in other words, is not an either-or option to increasing revenues or cutting spending in balancing the budget.

On the Truth-O-Meter, a statement that is accurate but needs clarification rates Mostly True.