March 28, 2013
House Bill 59 would boost state funding for Ohio’s primary and secondary schools in fiscal years 2014 and 2015, but would not bring it up to the level provided for K-12 education in the fiscal year 2010-11 budget, either in current or inflation-adjusted dollars. The last five years have challenged schools with a bumpy fiscal ride – federal stimulus dollars that filled a gap in fiscal years 2010 and 2011 were not replaced in the current budget; at the same time, tax reimbursements were substantially reduced. Policy Matters Ohio found through a survey of school districts in 2011 that many were furloughing teachers and aides, cutting course offerings and asking families to pay for extracurricular activities.
Figure 4 compares changes in funding for three biennial budgets – fiscal years 2010-11, 2012-13 (the current budget), and 2014-15 (the proposed budget). Significant cuts in revenue distribution funds in the current budget slow in the proposed budget, but losses in this funding source continue. General revenue funds increase by more than a billion dollars in the proposed budget compared to the current one. The increase is mostly in foundation funding, which gains $905 million. It is important to note, however, that analyses by education groups and media have called into question the administration’s stated intention to direct additional funding to poorer districts. Lower-wealth districts, which rely more heavily on state funding, would be more adversely affected by the administration’s proposal because it begins with a lower base amount than has historically been directed to school districts, according to a coalition of statewide education groups.
Overall, the proposed budget contains $1.167 billion more dollars for primary and secondary education than the current budget, restoring funding to within 1.5 percent of where it was, on an all-funds basis, in fiscal years 2010-11. Table 1 shows total dollars in the education budget in the prior, current and proposed budgets, based on figures in the Office of Budget and Management’s Budget Recommendations document.
In reality, inflation erodes the value of current dollars. Figure 5 shows the effect of inflation on foundation funding over the past 10 years, including the proposed budget for fiscal years 2014-15. The restoration proposed in the executive budget is helpful, but between 2005 and 2015, inflation has risen by about 20 percent while foundation funding has risen by 5.3 percent. Schools have been falling further behind as state support lags the consumer price index. Here, too, a long-term investment strategy is needed to bring schools up to a pre-recession level.
Targeted and one-time funding
Gov. Kasich’s “Achievement Everywhere” plan includes a $300 million “Straight-A Fund” to provide “one-time grants to those districts with the will to take on ambitious new strategies for helping their students improve their achievement levels and increase their operational efficiency.” No details have been provided as to the criteria by which awards will be determined. Although there may be value in this approach to spurring innovation, the competitive, targeted nature of the fund and its limited time frame mean that it cannot be counted as a restoration of state funding cut or lost over recent years.
The Achievement Everywhere plan also identifies approximately $880 million in “Guarantee Funds” to make up for what would otherwise be cuts in state foundation aid to a majority of school districts. Gov. Kasich and his advisors have called this support unsustainable after the coming biennium and have said they want to wean districts off the guarantee. A predictable school-funding formula that allows schools to plan for the future is a good goal, but one that starves schools of needed resources defeats the purpose of strengthening the state’s public education system. Taken together, the Straight-A Fund and the guarantees add up to nearly $1.2 billion, the amount the Kasich administration touts as its increase in school funding.
In March, the Ohio Legislative Service Commission released spreadsheets that estimated state funding for Ohio’s charter schools under the governor’s proposal. According to LSC, an additional $35 million would be redistributed from public schools to charters; as a result, many districts would lose some of their state support to charter schools. This amounts to an average 4.5 percent increase in state aid for charters, according to news reports about the LSC release, without taking into account the $12 million ($100-per-student) in funding boost for charter facilities. The districts that would see the largest share of their funds go to charter schools are among the state’s poorest, according to the Akron Beacon Journal. This increase to charters at the expense of district schools continues a long-term trend that has seen funding increases for charters outstrip enrollment gains.
The administration’s budget proposal also would establish two new school voucher programs. The first, an income-based voucher would enroll kindergarteners in fiscal year 2014 and expand to first-grade students the second year of the budget. The other new program would be available to students in schools that don’t meet benchmarks based on the state’s third-grade reading guarantee. These programs, along with the state’s four existing programs – the Cleveland voucher, the statewide EdChoice program, the autism voucher and the special ed program – have since the 1990s diverted increasing amounts of money from districts while showing at best mixed results academically.
Another provision in HB 59 would require districts to outsource education services if they don’t make “consistent progress” with four subgroups of students – gifted, low-income, English language learners, and students with disabilities. The proposal would have state funding that flows to districts for the education of these subgroups diverted to third-party entities. Given the failure of previous privatization efforts to create a stronger K-12 education system in Ohio, this approach would likely further weaken the current system.Other sections: Executive summary Introduction Expenditures Medicaid expansion Other health and human services Higher education Local government Tax policy Conclusion
 Patton, Wendy, and Piet van Lier, “The State Budget and Ohio Schools: Big Cuts, Hard Choices, Local Impacts,” Policy Matters Ohio, January 2012 at policymattersohio.org/state-budget-ohio-schools-jan2012.
 Testimony on House Bill 59 by the Buckeye Association of School Administrators, the Ohio Association of School Business Officials, and the Ohio School Boards Association, delivered March 21, 2013, and retrieved at www.ohiohouse.gov/committee/finance-and-appropriations.
 Achievement Everywhere: Common Sense for Ohio’s Classrooms, retrieved from the governor’s website at www.governor.ohio.gov/PrioritiesandInitiatives/K12Education/AchievementEverywherePlan.aspx.
 Boss, Charlie, “State’s ‘guarantee’ on school funding may vanish,” Columbus Dispatch, March 4, 2013.
 Livingston, Doug, “Kasich’s budget plan lowers aid to public schools, boosts privately run charter schools,” Akron Beacon Journal, March 15, 2013, retrieved at http://bit.ly/13WZ9Uk. See also: O’Donnell, Patrick, “Nearly half of Ohio school districts will lose money under Gov. John Kasich’s school funding proposal,” The Plain Dealer, March 13, 2013, retrieved at http://bit.ly/Yrz5wV.