LIMA — They want more money and a school-funding system that is fair. But area school officials also just hope for a little honesty.
“It’s been a constant shell game,” said Kalida schools Superintendent Don Horstman, pointing to lottery money and other times the state claimed to have increased funding to schools, but in reality just took it away from a different pot of money.
“The biggest thing I would like to see is open and honest discussion about we are going to give you more money, but be honest with the public and say we are going to take it away on this side,” he said.
School officials anxiously await a new funding formula expected in early February when Gov. John Kasich unveils his two-year operating budget. They wait with a bit of fear and skepticism after years of no fix to the system deemed unconstitutional 15 years ago because of an overreliance on property taxes.
“We are fighting those same fights,” Elida schools Treasurer Joel Parker said. “Talk about kicking a can down the road. I think we have kicked the education can for about two decades in not addressing some of the fundamental flaws in the formula.”
The formula will come on or around Feb. 4 when Kasich presents his budget to the General Assembly, said Kasich Spokesman Rob Nichols. The administration has been very tight-lipped on the formula that Kasich has said will put more money into the classroom.
“We have talked the better part of two years about wanting a system that drives more money into the classroom, more money into instruction as opposed to bureaucracy, overhead, red tape,” Nichols said. “We are one of the worst states of funding bureaucracy overhead with the least among getting into the classroom and we want to flip that.”
Nichols added that the governor wants to get away from the “prescriptive input driven concept” of the past and look more at outputs.
Lima schools Treasurer Ryan Stechschulte questions comments about too much being spent outside classroom instruction. The so-called red tape, he said, could be reduced by eliminating all excessive reporting and requirements from Columbus.
A LONG HISTORY
The Ohio Supreme Court first ruled that the state’s school funding model was unconstitutional in 1997 in DeRolph v. State. The court ruled three more times, the last being December 2002.
Nathan DeRolph was a high school student in Northern Local Schools in Perry County. The district claimed that the state failed to provide an “efficient” educational system by relying so heavily on local property taxes to fund schools.
The court ruled that Ohio’s reliance on local tax dollars leaves too much to the chance of where someone is born and raised. Property-rich districts collect more in local tax dollars and can provide an education that poorer districts cannot afford. Urban and rural schools suffer the most.
Kasich joins a parade of governors to try to tackle school funding since the 1997 ruling. Gov. George Voinovich’s model based funding levels on what was being spent by the top performing schools. Gov Bob Taft followed with a model based on program needs instead of student outcomes.
Gov. Ted Strickland’s evidence-based model would have calculated costs of individual components needed for a successful education. It was never implemented, being scrapped by Kasich, who had said a model would come out last year and then delayed it. The Ohio House Extended Subcommittee on Primary and Secondary Education sought input and held meetings around the state, including in Lima in August.
Nichols said there have been countless meetings with stakeholder groups, superintendents and teachers.
“We have sought input and recommendations and ideas from every corner of the state for an extensive period of time,” he said.
Local officials have done their share of letter writing to the state and meeting with local representatives. Allen County treasurers spent time with state Rep. Matt Huffman, R-Lima, in meetings Stechschulte called productive.
Huffman said he doesn’t know what the formula will look like and has not had conversations with Kasich or his staff about his personal opinions.
Huffman believes the most significant, year-to-year problem for districts is the uncertainty of real estate taxes. Real estate can be dramatically different from one district to another, he said. Huffman suggests creating a pool of money from local revenue and then distributing it to districts based on the number of pupils. It is the way many other states fund schools.
The second problem, Huffman said, is uncertainly in state revenue. He suggests dedicating some portion of revenue from the state, like state sales tax, to education.
“You eliminate most of the risk in the first problem and bring certainty to the second one. Then people can plan,” he said. “They may not like how much money they are getting, but there won’t be a question every two years about how much money.”
ALWAYS ON THE BALLOT/ALWAYS CUTTING
School officials point to the number of times they have had to go to voters as a clear sign that the formula is flawed. According to a 2012 report from the Education Tax Policy Institute, Ohio has had 12,890 levy attempts on the ballot since 1984. Of those, just more than half (51.8 percent) passed.
Elida saw an operating levy go down in November and will try again in May. Parker said school officials worry about voter fatigue.
“Sometimes I think it is easier for legislators to make cuts at the state level and assume we can just pass it locally,” he said. “But when the economy has been down for so long, I think it is not that easy to get some of the local issues passed.”
When a levy fails, school districts are usually forced to cut. Most often they have chopped already before even going to voters. Elida has cut 43 positions in the last 10 years and the board is expected to approve additional reductions next month. Wapakoneta schools’ enrollment has stayed steady, but the district has cut 40 employees in the last five years. Employees at both districts have taken concessions.
“We are as skinny as we can be and still offer a quality education for our kids,” Wapakoneta Superintendent Keith Horner said.
Lima schools cut $3.8 million from its budget before voters narrowly rejected a levy last May. It cut another $1 million before voters said "yes" to the same request in November.
Ottawa schools hasn’t gone to voters for new money, but has made its share of cuts, including cutting 28 staff members in the last nine years. The district’s administrators have been reduced by half, Superintendent Kevin Brinkman said.
“We can’t do with less money than what we are doing right now,” he said. “In the last nine years I have done nothing but cut positions.”
If the formula continues to rely on property taxes, Horstman hopes a change comes to at least allow it to grow with inflation. Currently, a property levy is passed for a specific dollar amount and the millage gets changed as property values change. A school district gets the same dollar amount even if valuations increase.
“If districts were allowed to pass a levy for 5 mills and as the property tax values increase, you are able to collect additional tax dollars, that would be hugely beneficial to the districts,” Horstman said.
While specifics aren’t being released, there are lots of hints and rumors about what the formula might look like. Some believe Kasich will move to a system where money follows the pupil, meaning a parent could take the money and use it at a nonpublic school. Local officials say it would be a version of Huffman’s voucher proposal. Officials believe vouchers will in some way be tied into the funding proposal.
Horstman said it will put him and others in a bad position when needing to go to voters for money.
“I may have to put a levy on and it will say in the language that it is to operate Kalida Local Schools, and then someone is going to take that money and go to a different school. That is not what people are voting on,” he said.
State money follows a student that open enrolls in another public district. Horner has no issue with that, but questions how the local share can also go.
“In my mind that is fundamentally wrong to take local dollars that residents are expected to be spent locally and give them to other communities and school districts,” he said.
Huffman said there are already many instances of money following a child. He pointed to not only open enrollment, but also charter schools, vocational schools and autism scholarships. Huffman strongly believes vouchers to private schools should be based on needs not geography.
“I am still a school choice guy,” he said. “I think giving kids a better opportunity to learn is a good thing.”
Horstman is also concerned about what is known as a “guarantee” going away. It guarantees a school district a certain level of funding and helps cushion the blow of declining enrollments. Kalida gets about $300,000 a year from the guarantee. With a $5 million annual budget, Horstman said it is significant.
“I understand there is a problem with a formula when you have to have two-thirds of your districts on a guarantee, but my fear is if they do away with the guarantee and don’t replace it somehow, that is going to be devastating to districts like ours,” he said.
Some also worry about talk of performance being tied to funding. Stechschulte said the concern is making it fair and making the goal attainable for all. The goal, he said, would have to be customized to each district.
“They need to look at the whole child and not an average number because it cost more to educate in a poverty district than a nonpoverty district,” he said.
It has been reported that the new system would try to target resources to property-poor districts and those with large numbers of low-income pupils.
HOLDING ONTO HOPE
Officials hope for an increase in per-pupil spending. Schools currently get about $5,700 per pupil. Horner adds that a mechanism for growth is also needed so that schools can have a little stability and not have to constantly worry about money.
“I am not asking to get rich. I am asking for a reasonable and modest growth,” he said.
“How do we come up with a dedicated stream for education and have something that will grow over time,” Parker said. “You know that whether it is health care, fuel or the cost of instruction, all of those items are going to go up over time.”
Funding essentially has been based on what a district got the previous year. Most have seen cuts, including the $780 million chopped in the current two-year budget.
The Allen County treasurers believe $8,500 per pupil is a good starting point to fund a basic, yet comprehensive education. They believe that should include all-day, everyday kindergarten, arts, physical education, foreign language, advanced-placement classes and other things currently largely required by the state but not paid for. Extras beyond that basic, comprehensive education would be the district’s responsibility. The worry is that the state wouldn’t fund the full amount.
“If their study shows it takes $8,500 a kid to educate then fund $8,500. Don’t fund it at $6,000 per kid,” Stechschulte said.
“It will be hard to hit everybody’s needs, but at the same time I think that it would be nice to just acknowledge that if we are spending $8,500 per student but the state starts at $6,000, at the end of the day, it will be difficult to fund all the things they want us to do.” Parker said.
As they have for many years, officials ask the state to slow down on the mandates, especially those coming with no new money. They point to the new third-grade guarantee and teacher evaluations as the latest.
The list goes on,” Brinkman said of the mandates. “They cut back so much and then they add more things to do. It is just difficult to get it all done. We need adequate funding so we can keep up with all the current mandates that are out there.”
Brinkman hopes Kasich takes into account schools like those in Putnam County that are spending less per pupil than most, yet maintaining schools deemed excellent or excellent with distinction by the state.
The current formula runs backward, Horstman said, so it works out to the amount of money available rather than what is needed for education.
“We have X number of dollars and X number of students so we are going to work out a formula so we don’t get larger than the pot of money,” he said of the current system. “We need to start with what it takes to properly educate a child, not this is the money we have, so this is what we get.”
It all comes down to money and whether the state has and is willing to properly fund education. Some question whether there is enough money.
“If the state had enough resources I think it could fund education the way it should be funded, but when the state is in the position they are financially, you can create a formula, but it is going to be underfunded,” Brinkman said.
While schools might see a fair formula, Stechschulte doesn’t believe the state will fund it properly. He doesn’t believe Kasich will make it happen.
“The governor is not willing to put it there because he has made the statement that we don’t have a revenue problem, we have an expenditure problem,” he said.
“We just want a formula that works and is fair. Are we going to be happy with it, don’t know yet,” Stechschulte added. “But as long as it is funded properly and based on sound research and is fair, then we can adjust. But if it is based on politics then it is just going to create a big fight for years to come.”