Budget announcement analysis

Yesterday, is a carefully orchestrated rollout, the Governor revealed elements of his school funding plan. He could have titled it "Under-investment is our new normal in school funding".

His plan involves a new mechanism for allocating state dollars to public schools, but before we get to that, let's take a look at the actual funding levels he is proposing.

The 2011 school GRF budget allocated $6.3 billion for fiscal year 2012, and $6.4 billion for fiscal year 2013. This produced the largest school funding cuts in state history which, according to an Innovation Ohio study, has led to voters having to consider $1.1 billion in new property and income taxes for schools. Voters passed just over 40% of that amount, approving school levies equal to $487 million in new taxes. With that as a backdrop, supporters of public schools were hoping for significant restoration of that funding and alleviation of local property tax burdens. So what did the Governor unveil?

Dick Ross and Barbara Mattei-Smith, two of Kasich's main education advisers, said the long-promised plan calls for $6.2 billion in basic state aid for the 2013-14 school year, [...] and $6.4 billion for 2014-15

At best that appears to be a status-quo under-investment of Ohio's public schools. However, during the presentation the Governor and his aides all expressed the following

If approved by the Ohio General Assembly, school districts would not experience any drop in funding in the next two years (July 1 to June 2015). However, Ross said, that level of funding would not be sustainable and would have to eventually decline.

The Governor reiterated that funding guarantees would be eliminated after this budget and districts should expect more cuts. To a system that has already suffered $1.8 billion in cuts that ought to be chilling. To avoid some of the rollout day chills, the Governor did not have district level funding numbers available - they should be available later next week.

Along with this basic GRF funding the Governor did announce a number of new programs and program expansions

Additional items, including $300 million for grants to encourage innovation in districts, bump the total cost of the plan to $7.4 billion for 2013-14 and $7.7 billion for 2014-15.

Much of this money is one-time, requires grant applications to be approved, or is ear-marked for specific purposes, such as

  • Funding of $190 million for special needs students, plus $45 per pupil in every school to fund gifted students;
  • Additional support of $207 million for 3- and 4-year-olds with disabilities;
  • New funding of $185 million for districts with the least amount of access to public preschool programs.

While this is welcomed, there is also a significant expansion of money going to charter schools and vouchers.


Included in the proposal are several provisions that dramatically increase the availability for school vouchers in the state, including a statewide income-based scholarship for families earning less than 200% of federal poverty (roughly $46,000 for a family of four) and a literacy-based scholarship for students who consistently fail the state's third grade reading test. A full 1.8 million students would qualify for the new plan's income requirements

The new vouchers would give about $4,250 a year toward private-school tuition to any kindergartener in the first year and first graders in the second year. The extra cost would be about $8.5 million in the first year, and $17 million the second year.

Charter Expansion

While new charter school accountability mechanisms were missing from the Governors proposals, extra money for them was not. For-profit charter schools will see an increase in state funding with those schools receiving the same dollar amount per student as their public counterparts, along with $100 more per student to help pay for facilities.

The $100 per student facilities payment will amount to around $13 million dollars. The "Money follows the child" provision will cause significant hardship to poorer districts that can least afford to lose state aid to low performing charter schools, which brings us to the new formula.

The Funding Mechanism

The Governor has moved away from trying to determine the cost of a quality education and funding it at that level to instead considering a communities ability to pay and having the state attempt to equalize that across school districts. The Plain Dealer describes is like this

Mattei-Smith said this plan tries to reduce the difference through a complicated formula to provide aid to districts with lower property values in two stages. The first takes the 20 mills of property taxes that most every district in Ohio charges at a minimum. Though Mattei-Smith said only 24 districts in Ohio have $250,000 of property value per student -- an amount that raises $5,000 per student with the 20 mills -- the plan will raise every district to that amount.

The state will cover the gap between the $5,000 figure and what 20 mills raises per student in that district. Because charter schools can't use property taxes, the state will cover the entire $5,000 as their base funding.

The second phase aims to equalize residents' ability to pay property taxes in addition to the 20 mills. Districts typically have about 35 mills billed to residents, but Kasich's staff said many residents don't have the income to afford those added taxes.

The plan ranks districts in wealth based half on property vales and half on household income, then separates the bottom 80 percent from the top 20 percent. The top 20 percent will receive no additional state aid.

The plan aims to boost the remaining 80 percent of districts, with those at the top getting state aid equivalent to charging another 5 mills in taxes. The lowest ranked districts will receive state aid up to the equivalent of as much as 15 mills.

This extra money will "follow the student" -- to use a phrase that Kasich and his staff used in the weeks leading up to Thursday's announcement -- as they go to charter schools. That means that a charter school, whether it be in a building or online, will receive more money for students from a poor district like Cleveland than it would from a richer one like Beachwood or Westlake.

The non-partisan, highly respected KnowledgeWorks released this statement, which captures the essence well.

Ohio Governor John Kasich’s proposal for a new school funding formula for primary and secondary public education includes many good ideas to help propel Ohio’s public education system forward but fails to ensure all students have adequate resources to succeed, Ohio Education Matters said today.

While more details are needed to fully assess the plan, which was released today in a Columbus briefing, the initial reaction is that the school funding plan does nothing to assure that students have enough resources to meet higher standards and expectations, said Andrew Benson, Executive Director of Ohio Education Matters, a division of KnowledgeWorks.

There appears to be many devils hiding in the not too clear details, but what is clear is that under funding Ohio's students education is now the new normal.

Here's the Presentation the Governor gave

2013 Ohio Gov. School Funding Plan Presentation by