What changes under Ohio’s new Fair School Funding Plan?
COLUMBUS, Ohio (AP) — Advocates for Ohio’s new school funding plan say it should finally provide a level of fairness and reliability that past spending programs lacked.
The Fair School Funding Plan, approved as part of the state budget last month, spends about $12.4 billion this year and $12.6 billion in 2023. At its core the plan changes how the money that the state provides districts for each student is calculated. The new system weighs a district’s expenses to come up with the base per-pupil funding amount.
“It’s much more of a ‘What do kids need, and let’s pay for it thing,’ rather than, ‘Here’s how much money we’re willing to spend, let’s divide it by the number of kids and see what we come up with,’” said Steve Dyer, government relations director at the Ohio Education Association and a former Democratic state lawmaker from Akron. “It’s a totally different way of looking at school funding.”
Though the plan passed by wide margins in the House and Senate, it’s not universally applauded. Senate President Matt Huffman, a Lima Republican, said he’s concerned about the plan’s cost over time. And some educators, while welcoming the concept, note that lawmakers removed language at the last moment that addressed the need to phase the plan in over six years.
“This short-term approach does not provide stability in needed funding beyond the upcoming biennium budget cycle,” said Emily Hatfield, treasurer at Olentangy Local Schools in central Ohio, one of the state’s fastest-growing districts.
A look at components of the Fair School Funding Plan:
In the past, lawmakers arrived at the per-pupil share the state was willing to pay — $6,020 in the current budget — based on unscientific measures that weren’t always clear, and were sometimes based on what revenue the state had, an approach referred to as residual budgeting.
Under the Fair School Funding Plan, the state’s cost per pupil is based on actual expenses faced by a district, such as teacher salaries and benefits, transportation, technology needs, and the number of administrators. The bulk of the money, about 60%, goes to direct classroom instruction. In the school funding plan approved last month, the base cost averages $7,200 per student for most districts.
“It costs out the day in the life of a student, and it takes the student’s perspective,” said Ryan Pendleton, chief financial officer for Akron Public Schools. “So, from the time they’re picked up to the time they log off at night, and everything in between.”
More than 80% of Ohio’s 600-plus districts would receive between $7,000 and $8,000 in per-pupil base funding, according to a legislative analysis.
The way the local community’s contribution is measured is also changing. Under the old system, what a district could pay was based mainly on property tax values. That could skew what some districts could pay if they had a large company in the district but most people were low-wage earners in town. It also depended on a comparison with local support in other districts. That meant a particular district’s ability to provide local dollars was determined largely by what other districts were contributing. This led to instances of districts being judged wealthier or poorer than they actually were.
With the school funding plan now in law, the local district share is based on both property tax value and district residents’ income, giving a more accurate picture of what a local district can actually contribute to the base cost. The plan also increases accuracy because a district’s share is determined by what it can actually pay, regardless of what other districts contribute.
The former school funding plan contained provisions ensuring that districts wouldn’t see funding decrease year over year, a method known as the guarantee. This system protected districts that saw temporary changes in factors that could affect funding, such as enrollment, the value of property, or local income. About 350 districts received guarantees in fiscal year 2019, a number that has continued to increase.
Under the Fair School Funding Plan, guarantees are predicted to dwindle and potentially disappear.
“There’s a conceptual need for the guarantee, but the goal is that if we have a formula that can be in place over time, and adequately funded, and slowly implemented, then a need for a guarantee should go away,” said Will Schwartz, legislative services deputy director for the Ohio School Boards Association.
The previous school funding system also put limits known as caps on how much money some districts could receive based solely on how much state money was available.
“The state just did not have the funds to fund all those districts at the level the formula said it should,” said Tom Hosler, superintendent of Perrysburg local schools in suburban Toledo. That limitation often affected fast-growing districts whose costs rise as more students enroll, forcing districts to turn to voters more frequently to make up the difference. The Fair School Funding Plan aims to eliminate caps once the plan is completely funded.
Additional funding was proposed two years ago by Republican Gov. Mike DeWine and was meant to pay for programs — such as mental health services and services for children on welfare — to enhance a child’s education by addressing needs outside of the normal school requirements. DeWine had asked for $1.1 billion in wellness funding when he first proposed the state budget this year.
The Fair School Funding Plan incorporates wellness spending into the new formula, with requirements that the money pay for those enhanced services. Because it’s now permanently part of the funding system, it should remain even after DeWine leaves office.
The state will continue to support poor children, gifted children, students in special education and those in career technical education programs, but the new system will grow funding for those children as a percentage of the base cost, rather than add a specific dollar amount of extra money as the state has done in the past. The exception to the new plan’s percentage rule is funding for poor students, which rose from $272 to $422 per student with a goal of transferring that funding to a percentage down the road.