An Analysis

State Funding for Ohio Public Education
Posted on 08/15/2018
Image of State Funding ProtestThe 20 years since state officeholders reacted to the Ohio Supreme Court’s initial ruling that the state’s system of school funding was unconstitutional has been a tale of two decades.

When adjusted for inflation, total state and local funding has increased from 27 percent, from $5,946 per pupil to $7,567, since 1999, when lawmakers first developed a new formula in response to the court’s initial 1997 DeRolph decision.

But new research found most of that increase happened in the first 10 years, as state funding failed to keep pace with inflation for many districts in the past decade.

Nearly 77 percent of the total revenue increase from state funding and local taxes in the past 20 years occurred prior to 2009, according to a new analysis by the Ohio Education Policy Institute, which is affiliated with public school associations.

State funding increased 35 percent from 1999 through 2009, but in the past 10 years it has actually fallen nearly 2 percent below inflation.

“It’s reasonable to say we have made some progress in the first 10 years, but we have fallen off since then. We have to reprioritize it,” analyst Howard Fleeter said.

Fleeter also found that in years since the court first ruled in March 1997 that Ohio relied too heavily on local property taxes, costing students at lower-wealth districts the chance at a quality education, too little has been done to boost funding of the poorest schools.

In Franklin County, 13 of 16 districts saw smaller total per-pupil funding increases in the past 10 years compared to the prior 10 years, adjusted for inflation. In eight — Bexley, Columbus, Gahanna, Grandview, New Albany, Upper Arlington and Whitehall — funding failed to keep pace with inflation over the past decade.

Sen. Peggy Lehner, R-Kettering, chairwoman of the Senate Education Committee, said she remains concerned that academic performance remains flat and big achievement gaps remain between wealthy and poorer districts.

“If we’re going to bend the curve and really start educating kids, we need to be spending a heck of a lot more money to alleviate the impacts of poverty,” Lehner said.

“We’ve got to get our heads out of the sand and really start ramping up early childhood education and intervention specialists dealing with emotional deficits some kids have. We can’t fix that through small incremental spending. But that seems to be what we’re doing.”

Local tax revenue increases have remained stable over the 20 years. Fleeter points to three key reasons why state funding slowed, starting with the great recession in 2008 and 2009, causing unprecedented drops in state tax revenue.

GOP leaders also eliminated the tangible personal property tax, which more than a decade ago generated about $1.1 billion per year for schools. For a time, state officials reimbursed schools for those losses, but that amount has largely been phased out, currently providing less than $150 million.

And finally, there are Gov. John Kasich’s funding formula and fiscal priorities, including income tax cuts that have meant an estimated $3 billion less in available revenue each year.

“Clearly he has prioritized reducing the income tax and has done that at every possibility,” Fleeter said. “Those revenues, if we had them, would go a long way toward making (the numbers) look different.”

Kasich crafted a new formula designed to drive funding to districts with the least ability to raise their own local funds, but Fleeter and other public education officials have argued it doesn’t quite work properly.

“The formula itself is kind of just spraying money in a not-very-targeted way,” Fleeter said.

Jon Keeling, spokesman for Kasich, stressed that it’s not just about money.

“For those that only quantify educational success by how much is being spent, they should be happy state education funding is at an all-time high — up over $1.5 billion since the governor came into office,” he said. “But we prefer to focus on the real policy reforms led by this administration that have been designed to improve student success over the past eight years.”

The analysis found that the 20 percent of districts with the lowest property value saw an inflation-adjusted 29.4 percent increase in total revenue over 20 years, compared to 25.6 percent for the wealthiest 20 percent. That movement, Fleeter said, closed the gap by $107 per student, but still leaves the wealthiest schools with $384 more per pupil to spend.

Fleeter said it should be the other way around, considering the low-wealth districts have an average poverty rate more than triple that of those in the most affluent districts.

“We lowered the gap, but not by a whole lot,” Fleeter said. “Getting them the same (level) of the high-wealth districts still isn’t adequate … because their costs are higher. They have kids who cost more to educate.”
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