Executive Budget Analysis for K-12

Here’s an analysis by OEA, of Governor Kasich’s Executive Budget detailing his plans for the state budget for Fiscal Years (FY) 2016 and 2017.

The governor claims that his budget proposal would provide an additional $700 million in state foundation support to schools. However, the approximate $235 million cut in the tangible personal property tax reimbursements to school districts would result in a significantly lower amount. Changes to the school funding formula and tangible personal property tax replacement reductions will result in 323 school districts receiving less money in FY 2016 than they received in FY 2015. Calculations also indicate that approximately 287 districts will receive reductions in FY 2017 over FY 2016 levels. District numbers provided below come from state officials in various offices.

School Funding

  • Increases the per-pupil funding amount from $5,800 in FY 2015 to $5,900 in FY 2016 and $6,000 in FY 2017
  • Retains the school funding structure enacted two years ago and provides for a 2% annual increase for the special education component; 4% annual increase for careertechnical education aid; annual 5% increase for K-3 literacy component
  • Sets a 10% gain cap on annual growth in formula aid in each year of the biennium
  • 236 school districts are on the 10.5% gain cap this year (FY 2015)
  • 204 school districts will receive a cap on increases in FY 2016
  • The administration’s intent is to eliminate the cap on funding by FY 2019
  • Modifies the income adjustment portion of the formula and claims that this adjustment will target state aid to districts with a lower capacity to generate local revenue
  • 321 districts would receive no income adjustment
  • 176 districts would receive increases in the amount of aid beginning in FY 2016
  • 114 districts with higher income would result in a greater share of funding delivered by local contributions and phased in over a five-year period
  • Reduces guaranteed funding for school districts by up to one percent of the district’s combined state and local resources from the prior fiscal year
  • 278 districts would see reductions in FY 2016
  • Reduces payments to school districts from the replacement payments from the elimination of the Tangible Personal Property Tax and Kilowatt Hour Tax by between 1% 2 and 2% of total district funds. The reduction percentage is based upon the property wealth of the school district.
  • 260 districts currently receive reimbursements, 352 districts receive no reimbursements
  • 203 school districts would receive reimbursements in FY 2016
  • 136 school districts would receive reimbursements in FY 2017


  • Limits time spent on standardized tests to no more than 2 percent of the school year and time spent on practice tests to no more than 1 percent
  • Allows local districts to decide on non-reading diagnostic tests in grades 1-3
  • Eliminates the fall Third Grade Reading Test and requires that the test be taken in the spring and, if needed, in the summer while retaining alternative assessment
  • Eliminates the use of student learning objectives for teachers teaching in non-core subjects areas in grades 4-12

Charter Schools

  • Increases the per-pupil funding amount from $5,800 in FY 2015 to $5,900 in FY 2016 and $6,000 in FY 2017
  • Increases the per-pupil school facilities amount from $100 to $200 per student
  • Establishes a $25 million fund for construction and renovation projects for charter schools with the highest rated (“exemplary”) sponsors
  • Allows charter schools sponsored by the highest rated sponsors to receive local tax dollars if approved by local school boards and voters
  • Prohibits the second-lowest level (“ineffective”) sponsors of charter schools from sponsoring new schools and places them on a one-year improvement plan
  • Sponsors rated at the lowest level (“poor”) would lose their charter schools which would be reassigned to higher performing sponsors and these sponsors would be banned from sponsoring new schools


  • Appropriates $23.5 million in FY 2016 and $31.5 million in FY 2017 for the income-based EdChoice Voucher and expands the program to students in second and third grade whose household income is at or below 200% of the federal poverty level ($47,700 for a family of 4)
  • Increases the EdChoice Voucher amount for students in grades 9-12 from $5,000 to $5,7003

Early Childhood Education

  • Provides an increase of $40 million over the biennium to an additional 6,125 economically disadvantaged children to attend preschool
  • Allocates $14 million over the biennium to cover childcare copays for families making less than 100 percent of the poverty level
  • Appropriates $10 million over the biennium to expand access to early childhood mental health counselors for children, teachers and staff


  • Allows the highest rated teachers to skip additional coursework requirements and take a year off from annual evaluation requirements
  • Exempts districts rated “exceptional” in reading proficiency, student growth and graduation rates from state rules on class size and “other rules” not identified
  • Allows local school districts to exempt third-year teachers from state-level evaluations since Ohio’s four-year licensure program for new teachers includes the Resident Educator Summative Assessment
  • Creates standards for school counselors and provides for $2 million over the biennium to improve access to school counseling services
  • Provides for $200 million over the biennium for two rounds of grants through the Straight A Fund in order to assist schools in projects that increase student achievement and increase student efficiency o Earmarks $18.5 million to train more high school teachers to teach college-level courses and encourage student participation in College Credit Plus
  • Increases funding for the Ohio Community Connectors program by $30 million over the biennium

Taxation Tax Increases (which would generate a $5.17 billion increase in revenue over the biennium)

  • Increases the state sales tax from 5.75% to 6.25%
  • Broadens the sales tax base to include cable TV, parking, travel packages and tours, debt collection services, lobbying services, public relations, management consulting and research/opinion polling
  • Raises the cigarette tax from $1.25 to $2.25 per pack
  • Raises the tax on other tobacco products to a level equivalent to the cigarette tax
  • Adjusts the rate of the Commercial Activities Tax (CAT) on business from 0.26 to 0.32 percent
  • Raises the severance tax on oil and gas, generating an estimated $325 million in revenue
  • Eliminates a number of tax deductions and credits for Ohioans making more than $100,000 in annual income including the retirement income credit, Social Security deduction, $50 senior credit and the lump sum senior credit Tax Decreases (equals a $5.69 billion reduction in revenue over the biennium)
  • Implements a 23% personal income tax reduction across all income brackets over two years
  • Eliminates the income tax for Ohio businesses with annual gross receipts of $2 million or less
  • Maintains Ohio’s 50% tax deduction on the owner’s first $250,000 of net business income for businesses with annual gross receipts of $2 million or more
  • Increases the personal exemption amount for Ohioans who earn $80,000 or less