House Bill 64 (State Budget) Analysis

The following analysis is based on the final version of House Bill 64 (state budget) as signed by the Governor.

K-12 Education
School Funding

  • Increases state aid to school districts by approximately $350.9 million in FY 2016 and $154.4 million in FY 2017 prior to deductions for charter schools and vouchers.
  • Maintains the existing school funding formula but adds new support for transportation, as well as incentive funding tied to the third grade reading guarantee and graduation rates.
  • All school districts are guaranteed that they will not receive less funding than they received in FY 15 in state foundation aid over the biennium.
  • Increases the foundation formula from $5,800 per pupil in FY 2015 to $5,900 in FY 2016 and $6,000 in FY 2017.
  • Limits the gain cap or the funding increase that a school district can receive under the formula to 7.5 percent in each year of the biennium. Exempts capacity aid (the capacity measure determines a districts ability to raise local revenues), transportation supplement, graduation rate appropriation, and third grade reading guarantee appropriations from the cap in both FY 2016 and FY 2017.
  • Reduces payments to school districts from the elimination of the Tangible Personal Property Tax and Kilowatt Hour Tax by between 1% and 2%, depending on the property wealth of the school district. The Governor vetoed the Tangible Personal Property (TPP) supplemental foundation aid in FY 2017 that was intended to guarantee that districts do not receive less funding (state foundation aid and TPP reimbursements) than FY 2015 levels. This veto, coupled with the elimination of the minimum per-pupil provision, reduces approximately $95.5 million in FY 2017 for nearly 120 districts that are reliant on the TPP replacement payments (Revised estimates from the Legislative Services Commission 7/2/2015). The Governor retained the TPP supplemental foundation aid for districts in FY 2016.
  • Provides approximately $278 million in FY 2016 and $283 million in FY 2017 for Joint Vocational School Districts (JVSD).
  • Requires a school district or charter school to pay a JVSD for student special education and related services if the cost of providing those services is greater than the amount the JVSD receives under the funding formula.
  • Creates a School Transportation Joint Task Force to study the “appropriate formula” for paying for student transportation and the responsibility of school districts, nonpublic schools and community schools. Requires the task force to submit a report by February 1, 2016.
  • Repeals the requirement that Legislative Services Commission maintain an online database of current and historical revenues and expenditures for all school districts.


  • Requires the state superintendent to verify that the state achievement tests in 2015-2016 will be administered once during a testing window in the second half of the school year and that the amount of time spent taking these tests is reduced in order to provide more time for instruction.
  • Requires any entity which grades state assessments to send a school a list of individual scores for all students within 45 days or by June 30 - whichever is earlier (3rd grade ELA tests results due by June 15).
  • Extends for one year (through 2015-2016) a provision that prohibits any school from being required to administer state assessments online. Requires ODE to furnish assessments free of charge.
  • Prohibits general revenue funds from being used to purchase assessments developed by the Partnership for Assessment of Readiness for College and Careers (PARCC).
  • Exempts students enrolled in a chartered nonpublic school which is accredited through the Independent School Association of the Central States (ISACS) from the high school graduation assessments and the requirement to take the high school end-of-course exams, unless the student is attending the school under a voucher program. Specifies that non- ISACS chartered nonpublic schools may forgo the end-of-course exams if the school administers an alternative assessment to all of its students.

Safe Harbor

  • Prohibits districts from using value-added ratings from 2014-2015 and 2015-2016 for evaluations or employment decisions unless the district and teachers collectively agree to use them. Requires that evaluations be based solely on performance if no other measure of student academic growth is available.
  • Changes the first year that state report card ratings must have an overall letter grade to 2017-2018.
  • Prohibits report card ratings from being used to determine EdChoice voucher eligibility and academic distress commissions through 2016-2017.
  • Extends “student safe harbor” by two years. Through 2016-2017, schools are prohibited from utilizing student scores on state assessments or end-of-course exams as a factor in any decision on student retention, promotion or granting course credit. (Note: this does not apply to the retention provision of the third grade reading guarantee).


  • Revises the alternative framework of the Ohio Teacher Evaluation System (OTES) as follows:
    o Decreases the student academic growth measure to 35% (from 42.5%)
    o Increases the teacher performance measure to 50% (from 42.5%)
    o Specifies the remaining 15% shall be one or a combination of student surveys, teacher self-evaluations, peer reviews, student portfolios or any other component deemed appropriate by the district.
  • Requires the Educator Standards Board to develop standards for school counselors that align with the American School Counselor Association’s professional standards, and are in keeping with the core elements of an effective school program.
  • Requires the State Board of Education to develop a standards-based framework for the evaluation of school counselors and requires each school district by September 30, 2016, to adopt an evaluation policy that conforms to the state framework.

Voucher Programs

  • Increases the maximum amount of an EdChoice voucher for a high school student from $5,000 to $5,900 in FY 2016 and $6,000 in FY 2017.
  • Increases the maximum amount of the Autism and Jon Peterson Special Needs voucher programs from $20,000 to $27,000.

Charter Schools

  • Requires the Ohio Department of Education (ODE) by July 1, 2016, to submit to the House and Senate Education Committees, a plan that would expand ODE’s authority to directly authorize charter schools and makes recommendations for a ratings rubric for the evaluation of charter school sponsors.
  • Allows charter schools with the highest rated sponsors to receive local tax dollars if approved by local school boards and voters.
  • Permits a charter school to operate a preschool program if its sponsor is rated "exemplary,” and if the charter receives a grade of “C” or better on either the value-added or performance index score for grades four through twelve or if a school serving grades K-3 receive a “C” or better for improving literacy. A charter school may not receive operating funds for students enrolled in a preschool program, but is permitted to receive early childhood expansion funds.
  • Requires a feasibility analysis regarding the establishment of 16 charter schools for gifted children located in the different ESC regions of the state.
  • Changes the definition of “internet- or computer-based charter school” to include a charter school that offers career-technical education even if that instruction provides some classroom-based instruction.
  • Requires that high-performing charter schools be given the right of first refusal in the sale or lease of school district real property (this establishes a more specific rank order to current law that generally provides charter schools a right of first refusal).
  • Increases the amount of money that may be used to pay for school facilities from $100 to $200 per student.
  • Authorizes e-schools to receive $25 per pupil for facilities.

Other K-12 Provisions

  • Establishes the Joint Education Oversight Commission, consisting of five members from the Senate and five members from the House, to review and evaluate education policies and programs.
  • Requires the State Board of Education, by July 1, 2016, to adopt rules exempting consistently high-performing teachers from the requirement to complete any additional coursework for the renewal of an educator license.
  • Extends the deadline for the 2015-2016 state report cards from September 15, 2015, to January 15, 2016. Extends until January 31, 2016, the deadline for ODE’s reports regarding students with disabilities for 2014-2015.
  • Requires the State Board of Education by December 31, 2015, to update its plan for students to earn high school credits based on demonstrated competency and how 7th and 8th grade student can meet curriculum requirements. The provision requires school districts to comply with the plan in 2016-2017.
  • Makes eligible for high school graduation an individual who entered 9th grade for the first time prior to July 1, 2014, if the person completes one of the three pathways: (1) score at "remediation-free" levels in English, math, and reading on nationally standardized assessments, (2) attain a cumulative passing score on the end-of-course examinations, or (3) attain a passing score on a nationally recognized job skills assessment and obtain either an industry-recognized credential or a state agency or board-issued license in a specific vocation.
  • Makes eligible for high school graduation an individual who entered the 9th grade for the first time prior to July 1, 2014, and has not passed all of the Ohio Graduation Tests, if the person meets a combined graduation requirement established by rules adopted by the State Board of Education. Requires the State Board to adopt such rules by December 31, 2015.
  • Permits schools to enter into contracts with hospitals, health care providers or a Federally Qualified Healthcare Center (FQHC) in order to provide health care services to students.
  • Requires the Board of Building Standards to adopt rules for a staff member of a K-12 school or institution of higher education to use temporary barricades for security. Requires each school to train staff members on the use of barricades.
  • Appropriates $40 million over the biennium to expand early childhood education opportunities.
  • Appropriates $5 million in FY 2016 to support graduate coursework for high school teachers in order to receive credentialing to teach college credit plus courses. The provision gives priority to educationally disadvantaged high schools. Also appropriates $5 million in FY 2016 for competitive grants for universities to aid in the credentialing of teachers.
  • Appropriates approximately $42 million over the biennium for the Straight A Program.
  • Prohibits a school district or school from altering, truncating, or redacting any part of a student’s record so that any information on the record is rendered unreadable in the transfer of that record.
  • Allows students who enter the 9th grade for the first time on or after July 1, 2015, who are pursuing a career-technical instructional track, to take a career-based pathway mathematics course as an alternative to Algebra II.
  • Modifies mentoring under the Teacher Residency Program to specify that mentoring be provided during the first two years of the program and that the mentor be a licensed teacher (lead professional license not required).
  • Specifies that a career-technical education instructor teaching under an alternative resident educator license may not be required to complete the conditions of the first two years of the Ohio Teacher Residency Program.
  • Changes the deadline for the annual reading assessments under the Third Grade Reading Guarantee for Kindergarten students to November 1.
  • Grants parents of home-schooled students the ability to award a diploma to their children and requires the local superintendent to sign that diploma.
  • Specifies that up to $200,000 in each fiscal year, after providing matching funds for the school lunch program, be used by ODE to contract with the Children's Hunger Alliance to expand access to federal summer nutrition and school breakfast programs.
  • Appropriates approximately $315,000 in FY 2016 and $285,000 in FY 2017 to support the Chardon Pilot Program to assist in trauma-based recovery for students and teachers in Ohio.
  • Allows school districts to contract with public and private entities to provide academic remediation and intervention services to all students outside of regular school hours (current law allows for grades 1-6).
  • Prohibits the State Board of Education from requiring the payment of any fee for a license, certificate, or permit issued for teaching in a Junior ROTC program.
  • Changes the term of office of a joint vocational school district board member to one year if that member is appointed on a rotating basis by members of the board when there is an even number of member school districts under a plan on file with ODE.
  • Permits the State Board of Education to establish a Teacher of the Year program and permits voluntary contributions to the program.
  • Permits a Science, Technology, Engineering, and Mathematics (STEM) school to admit out- of-state students and requires the school to charge tuition to those students.
  • Appropriates $2 million in each FY for Teach for America.
  • Abolishes the Healthy Choices for Healthy Children Council.


  • Provides 6.3 percent across-the-board reduction in income tax rates beginning in 2015.
  • Provides a 75 percent tax deduction for the first $250,000 in small business income for 2015, a 100 percent deduction in 2016 and 2017. Imposes a 3 percent flat tax rate on business income above $250,000.
  • Increases the cigarette excise tax from $1.25 to $1.60 a pack beginning July 1, 2015.
  • Creates the 2020 Tax Policy Study commission consisting of six members (three from the House and three from the Senate) to review Ohio’s tax structures and policies. Requires the commission to make recommendations on how to transition Ohio’s personal income tax to a 3.5% or 3.75% flat tax by 2018, how to reform Ohio’s severance tax by October 1, 2015, and the historic building rehabilitation tax credit by October 31, 2016.
  • Applies a means test to retirement income tax credits, beginning in 2015, only taxpayers with Ohio taxable income of less than $100,000 would be eligible for the credits. The lump- sum retirement credit and the lump-sum distribution credit may be claimed in lieu of, and not in addition to, the retirement income credit and the senior citizen credit respectively.
  • Increases the maximum allowable rainy-day fund from 5 percent of general revenue funds to 8.5 percent.


  • Eliminates the ability of local communities to conduct special elections in February and requires the payment – in advance – of 65% of the estimated cost of an election where a political subdivision places an item on the ballot in a special election.