Kasich escalates public ed defunding

Ohioans would see income taxes fall, but would pay for them through higher sales and property taxes in the final Republican proposal

That's how the Cincinnati Enquirer opens its report on the massive last minute tax plan the Ohio GOP are planning to dump on the state, after months of internal disagreements.

Of particular concern to those who support public education, the budget conference committee decided not to restore the historic school funding cuts they made in the previous budget, but instead build upon it. Here was their starting point

FY12 (2011-2012 school year), which was the first year under Kasich's budget, saw a total of $7.52 billion in total state revenues. That's an 8% cut in total state revenue -- easily the largest cut since ODE started keeping these total state revenue figures in 1995.

And the bad news for districts is that FY12 won't represent the entire state divestment from education during Kasich's first budget. That's because the governor's budget phased down the Tangible Personal Property and Killowatt Hour tax reimbursement payments over two years. So the cut will be likely continued in FY13, pushing the total revenue figure down even lower.

As it stands, that $7.52 billion is the lowest amount provided by the state since the 2007-2008 school year.

Where they have ended up is even worse. In order to pay for their income tax cut, they have decided to eliminate the 12.5% property tax rollback.

The elimination of the property tax rollback will make future school levies harder to pass and more expensive, further shifting the burden from the state to local communities already struggling to support the needs of their students.

Eliminating the 12.5 percent property tax rollback for new taxes could make school levies harder to sell to voters. For example, without the rollback, last year's 15-mill Cleveland school levy would have cost $263 a year instead of $230 for the owner of a $50,000 home, and $525 a year instead of $459 for the owner of a $100,000 home.

The Governor and his legislative allies continue to shift the burden from millionaires to working people and their communities. We're going backwards at a time when the state can afford to move forward.

Education News for 01-10-2013

State Education News

  • Teacher education programs at public, private state colleges can now be compared (Cleveland Plain Dealer)
  • Prospective teachers, school superintendents and parents can now judge the quality of teacher education programs in Ohio's public and private colleges…Read more...

  • Secrecy to shroud school seclusion, restraint use under new state rules (Columbus Dispatch)
  • New state rules would require schools to keep records of how often and why educators place children in seclusion rooms or physically restrain them…Read more...

Local Education News

  • Casino money headed this way (Marion Star)
  • School districts are getting their first taste of casino-tax revenues, though this new revenue stream won’t be a windfall…Read more...

  • Newcomerstown schools' recycling drive helps beat budget crunch (New Philadelphia Times-)
  • Staff and teachers of Newcomerstown Exempted Village Schools have been earning free technology equipment by participating in the FundingFactory Recycling Program…Read more...

  • Scioto schools get $277,500 from Casino Tax (Portsmouth Daily Times)
  • The state of Ohio announced Wednesday nearly $38 million will go to Ohio schools…Read more...

Education News for 01-08-2013

State Education News

  • Disadvantaged on the report card (Akron Beacon Journal)
  • It’s a complicated business, telling people whether they are getting good value for their public schools and how well their students stack up against those across the street or the oceans…Read more...

  • Ohio’s education laws 10th-best, group says (Columbus Dispatch)
  • Ohio ranked 10th for state education laws that include performance pay for teachers, school choice for students and parents, and spending and governance flexibility for schools and districts…Read more...

  • Tax revenue from casino offsets lower home values for South-Western schools (Columbus Dispatch)
  • South-Western schools, Columbus and other government entities will get their first taste of property-tax revenue from Hollywood Casino Columbus this year…Read more...

  • State tax revenue beats December projection (Columbus Dispatch)
  • December was a good month for state tax revenue: It came in nearly 5 percent higher than projected, thanks largely to strong income-tax receipts…Read more...

  • GED test changes include rising price (Hamilton Journal-News)
  • Beginning in 2014, there will be significant changes in the content and procedures regarding the test for the General Educational Development diploma…Read more...

Local Education News

  • Reduction in Duke tax costs area schools $11M (Cincinnati Enquirer)
  • School districts in Hamilton County have lost about $11 million in tax revenue from utility giant Duke Energy in three years…Read more...

  • Charter school sponsor rules in place for Cleveland (Cleveland Plain Dealer)
  • The Transformation Alliance, a new panel created through the Cleveland schools legislation passed by state legislators last year, has agreed on broad principles for evaluating charter schools and their sponsors…Read more...

  • Columbus schools on verge of hiring info officer (Columbus Dispatch)
  • As investigations continue into the accountability of Columbus City Schools student data, the Board of Education is ready to hire an executive…Read more...

  • New evidence delays trial in Ohio school killings (Columbus Dispatch)
  • Because “voluminous” new evidence has emerged, a judge agreed yesterday to indefinitely delay the murder trial of an 18-year-old charged in the high-school shooting…Read more...

  • Schools OK transfer (Marion Star)
  • A plan by the Boys and Girls Club of Marion County to open a youth center proceeded another step Monday…Read more...

  • Schools warned of threat (Warren Tribune Chronicle)
  • Local schools are being watchful after they were told of a potential threat on Monday. Youngstown police were notified of the threat Sunday, which was made in the form of an online message board post…Read more...

  • School Choice, Lottery Process Starts For Columbus City Schools (WBNS)
  • Columbus City Schools started its school choice/lottery process on Monday. Parents of 2013-2014 high school students have until Jan. 31 to return completed applications to put their children in the lottery process…Read more...


  • Uniformity across county could have life-saving impact (Canton Repository)
  • To say that Roger Wiandt is well-traveled when it comes to school buildings in Stark County is an understatement…Read more...

The Casino shell game

Hopes of school districts hitting the proverbial jackpot are set to take a significant hit if analysis conducted by the Cincinnati inquirer prove accurate.

“This is all a big shell game,” said Warren County Administrator David Gully. “We’re not really getting anything. All the new money we’re getting is going to be offset by cuts in the Local Government Fund.”

Gully was referring to state budget cuts through mid-2013 that severely slashed funding to counties and local communities in order to close an $8 billion budget gap.
Tax projections also depend on whether slot machines open at Ohio’s seven racetracks. Local governments can count on a 27 percent reduction in projected tax proceeds if that occurs because “racinos” are expected to dip into casino profits. The low end of The Enquirer’s analysis includes that scenario.

That scenario is now certain, with the Governor signing SB386 which will allow racetracks to offer slot machines. Ohio schools are likely to received just 39% of what was promised in 2009, which wasn't big money to begin with. In 2009 projections were that $327,441,791 would flow from casino to local tax juridistions, but now just $130,452,323 is expected, a massive drop of $196,989,468

School officials are skeptical about how much money they’ll receive and what it will mean to their budgets.

Consultants have told school districts to expect $21 per student for 2012 and up to $80 per student when all casinos are open.

“It’s not big money, although it sounds like a lot to the average Joe,” said Randall Bertram, treasurer at Northwest Local Schools, the second-largest school district in Hamilton County with about 9,000 students.

Northwest, which is laying off 56 people on Aug. 1, including 21 teachers to trim $3 million from the payroll, is hoping to get about $1 million a year in tax revenue from the casinos. That’s still only 1.25 percent of an $80 million general fund budget in a district that axed $16 million from its spending since 2005, Bertram said.

The further fear, which materialized with the lottery revenues, is that casino revenues will further supplant state funding

“It took one or two biennium budgets and it’s in the same bucket of money as everything else,” Bertram said of lottery proceeds. “We don’t know how long this is going to last. It’s almost like stimulus money. You hope you get it, and you hope you can do good with it. You don’t rely on it.”

Here's a district by district breakdown of expected revenues.

Casino Revenue Analysis

A teacher schools the Dispatch

When we read this article in the Dispatch by senior editor Joe Hallet, we were taken aback a little by how fawning it was, and how it seemd to suffer from quite a lot of selective amnesia. One Worthington school teacher thought so too, and forwarded to us his email to Mr. Hallet.


I read your column on Sunday and came across this line:

(Kasich) used Senate Bill 5 to take on public-employee unions, whose pay and benefit packages were growing unsustainable for taxpayers, in part because their local government and school officials had forgotten how to say no.

I don't think this is a fair characterization at all. The front page article ("Public, private compensation in the same ballpark.") in the Dispatch on Sunday demonstrated that public employee salaries and benefits are on par with those in the private sector. By your logic, combined with the article on pg 1 Sunday, you could say that private sector salaries have also grown unsustainable since private employees have a slightly richer salary and benefit package than public employees.

No discussion of the impact of public employee salaries on budgets is complete without pointing out that, since 2005, the income tax was cut 21%, the estate tax was eliminated, and the locally collected tangible personal property (TPP) tax was replaced with the state collected commercial activities tax (CAT). The income tax cut resulted in a sustained decrease at the state level in tax revenue which was evident even prior to the recession even with the addition of new CAT revenues. In 2005 total state revenue was $56.5 billion - by 2011 that had fallen to an estimated $50.5 billion which is $43.5 billion in 2005 dollars!

On the local level, governments and school districts were literally robbed of tax revenue by the state legislature's elimination of the TPP and estate tax. All of this has dealt a crushing blow to the ability of local governments and school districts to sustain services by starving them of local revenue as well as state aid.

These tax changes were heralded in 2005 as essential to economic growth in Ohio with the promise that the reforms would result in job growth in our state. I think the record on this score shows that tax reform in Ohio has not achieved the promised results and has instead put incredible stress on the state and local governments' ability to provide vital and expected services.

It is disingenuous to say that public salaries and benefits are unsustainable while ignoring the impact tax reform has had on Ohio's ability to fund its government. Furthermore, the front page of the Dispatch on the same day as your column refutes the notion that public salaries and benefits are out of line or unsustainable.

Mark Hill, Worthington school teacher
Columbus OH

We previousy wrote about this issue in an article titled "GUTTING EDUCATION FOR A CUP OF CHEAP COFFEE"

A balanced approach to the budget

The Republican controlled legislature and the Governor have determined that the state budget will be balanced on the back of public education and the middle class. Much of the solution will pass the buck to local government and school districts, by eliminating the tangible personal property tax (TPP) replacement money, leaving many school districts in dire straits. Further costs are passed onto working Ohioans with a 2% pension shift, directly extracting hundreds of millions from paychecks over the next 2 years alone. A significant portion of the money that is left over for public education is diverted to expand charter schools and vouchers. A plan even conservative charter proponents oppose. Much of the rest of the budget gap is filled with one time money from the privatization of Ohio's assets, from roads and prisons, to the lottery and alcohol.

Clearly a more balanced approach would be welcome.

A short while ago we discussed and demonstrated that the income tax cuts made through HB66 in 2004 has had a negligible effect on a typical teachers tax burden. For those tax cuts to make a real tangible difference one would have to earn significantly more than any Ohio teacher - hundreds of thousands of dollars more in fact.

A recent study by the Education Tax Policy Institute (ETPI), found

that Ohio ranks as the 17th lowest state in taxes levied at the state level. Increases in local taxes place Ohio with a total state and local tax burden at about the national average. Ohio's ranking among states is higher when local taxes are included in the comparison because state policies have shifted the responsibility for funding public services, including education, down to the local level.

While the study determined that the reform of Ohio's business tax structure in 2005 improved both the fairness and the competitiveness of the state's revenue system, the authors also determined that the combination of the recent recession and the changes in the state’s tax system in House Bill (HB) 66 lowered state revenue by $3 billion below the levels anticipated in 2005 when the state revamped its business tax structure.

The summary can be read here, with the full report is below. The report demonstrates that Ohio does not have the crushing tax burden that some would have us believe, but instead has areas where improvements could be made that would raise revenue without causing any economic harm.

The following two charts from the report show the sources of tax revenue, the first for the state, the second for local taxes.

State Sources of Tax Revenue

State sources of tax revenue

Local Sources of Tax Revenue

local sources of tax revenue

As you can see, business pays very little, with the vast majority of taxes being paid by individuals through income tax, property tax and sales taxes. One would hardly have to be draconian to realize significant tax revenues from simply closing outdated loopholes

COLUMBUS, Ohio - Ohio's cash-strapped government could generate an additional $300 million a year by closing tax loopholes that are outdated, benefit a few or do little to spur economic growth, a trio of policy think tanks spanning the political spectrum told state leaders Monday.

You can see some of the crazy tax loopholes in this document

The Tax Expenditure Report Ohio

In total those tax exemptions add to over $7 billion.

The evidence is overwhelming that an alternative, more balanced approach to the budget is available to law makers should they choose. They do not have to continue on this path that seriously harms public education and the middle class. They can solve the budget problems without passing the buck down to local government. The question is, will they chose a new path?