John’s Actions in the 130th General Assembly:

The Education Funding Caucus
John’s office formed this caucus, which addresses pertinent issues with respect to adequate, equitable and sustainable funding for education. Composed of 21 members (11 Democratic and 10 Republican) from both chambers, it first met in late October, 2013 and again in early December, 2013. The caucus will continue to meet throughout 2014.

House Bill 216
John is the sponsor of this bill. HB 216 forgives the debt a school owes to the state, if that school district is willing to consolidate with another district. HB 216 passed out of committee 17-2. HB216 eventually was incorporated into an amendment in HB 487 which passed both the House and Senate and was signed into law by the governor.

House Bill 374
John is the co-sponsor of this bill. Ohio’s expansion of Medicaid will result in a savings of more than $400 million. HB 374 adds that money to the “Straight A” fund to benefit education. The “Straight A” fund incentives school districts to solve specific problems in our schools through sustainable, innovative approaches.

HB 520
John is the co-sponsor of this bill. As a joint sponsor, HB520 would require public audits of charter schools. With the acceptance of taxpayer dollars, so must come appropriate financial oversight of those funds.

HB 547
John is the co-sponsor of this bill. Teacher evaluations ought to be congruent for all those who labor in the craft and accept public funding. HB 547 requires equivalent evaluations for charter school teachers as those already implemented for public school teachers.

In this four-part series, the John will trace the evolution of school funding in Ohio prior to World War II, describe the challenges experienced after the war and depict the current crisis facing education funding. Finally he will explore various options for consideration with respect to the future of school funding.

Part One: The Evolution of School Funding

Since antiquity, education has been valued in both eastern and western cultures. From Confucius and Socrates in early history, to Horace Mann and John Dewey of American history, education has provided the means by which we humans discover, reflect, and deepen our understanding of those concepts pertinent to our responsibilities as citizens of our communities, our states, and our nation.

Our forefathers, operating under the auspices of the Articles of Confederation adopted the Land Ordinance of 1785 which guided the development of what would become the State of Ohio. This charter not only divided the Northwest territory into townships of 36 square miles, but allocated one parcel within each township (section 16) to be set aside for “the maintenance of public schools.” Two years later, the Northwest Ordinance echoed this belief and further charged that “Religion, morality, and knowledge, being necessary to good government and the happiness of mankind, schools and the means of education shall forever be encouraged.” Clearly it was evident from Ohio’s genesis that education was critical to our development. This realization, we can all agree upon.

What might cause disagreement then, and now, was the underpinning assumption of school funding. In the early days of Ohio, proceeds from economic activity (primarily agriculture) from section 16 helped to offset the cost of public education. This education, one should know, was available to children of both sexes — a novel concept at the time. By 1825, however, the state legislature passed legislation which created a means to generate revenue — the property tax. Local districts could now function properly to provide “the maintenance of public schools.” This system seemed to work well down to the eve of the Civil War when the Ohio Constitution of 1851 mandated that the state provide an “efficient system of education.” By this time the population of our state was growing rapidly and produced, to no surprise, a financial burden on the citizens to fund public education.

By the turn of the 20th century, more demands were placed on Ohio’s educational delivery system. The Bing Act of 1921 added increased pressure as children from ages 6 to 18 were required to attend public school (with the exception of those who opted out at 16 for work). To this challenge, the state legislature adopted a 3% sales tax in 1935 — half of which was earmarked for operating costs of school districts. This approach, adopted in the midst of the Great Depression, served Ohio well through the remainder of those challenging economic times, World War II, and the two decades to follow. In the next segment, we will examine the challenges facing funding after the war and into the 21st century.

Part Two: The Post War Challenges

The end of World War II was celebrated by many as a time when we could forget the hardships of the Depression and the sacrifices of the war. America settled down to raise families and live the good life. Even with the demands brought upon education by the onslaught of Baby Boomers, the Cold War, and “rocket fever,” our system of funding proved to be sufficient.

By 1971, however, facing the challenges of increased educational expectations due to a growing international economy, the Ohio state legislature offered financial relief with the establishment of a state income tax. Hence, a tripartite system to fund education was now in place–property taxes, a sales tax, and an income tax were thus yoked in an equitable manner. It would seem that the source of funding would be secure for the foreseeable future. In fact the system was good–too good to be left alone.

The 1970’s brought prosperity to the Buckeye State. Businesses grew providing ample employment opportunities and with that, increased demand for housing which drove property values upwards. In fact, as property values increased so too did the revenue which funded schools. To ease the burden on taxpayers, the legislature enacted HB 920 in 1976. Here, then, one can find the roots of today’s funding problem.

House Bill 920 effectively “froze” the millage of an operating levy at the face amount of value at the time of its passage. Hence, if a school district passed a levy which brought in one million dollars, that was all that could ever be collected during any calendar year. Unlike the pre-920 days (when a percentage was used that inched upwards with inflation), this new legislation locked in a fixed amount. Thus, similar to a household with no pay raise, school districts were forced to ask taxpayers for more and more levies to offset the insidious reality of inflation. This reality is sometimes referred to as “phantom revenue” — property valuations rise, but school districts see no increase in their revenue.

Certainly, on the surface taxpayers felt a sense of relief when 920 passed. In fact, their “share” of the amount due annually actually decreased as new construction or upgrades were initiated within their tax districts. (However, the flip side to 920 is this: as property values stagnated and/or fell, taxpayers would discover that their “share” rose so that, in our example, one million dollars was still collected. This is precisely what, in part, is occurring at the present time).

Nevertheless, in the early 1980’s public schools began to feel the pinch of stagnant revenue and looked for other solutions to their funding dilemma. To that end, in 1984 the legislature agreed that profits from the state lottery would be earmarked for public education expenses. In addition, a ten-year reduction in the tangible property tax would also be offered as a means of offsetting expenses. But rather than fully address the problem which needed attention, this action proved to be but a Band-Aid.

As a result, in 1991 the Ohio Coalition for Equity & Adequacy of School Funding challenged a 1979 Ohio Supreme Court case in which the state’s funding formula was deemed to be constitutional. The case, DeRolph v. the State of Ohio (1994) was based on the charges that Nathan DeRolph had received an inferior education as he lived in a poorer area of the state (Perry County) that did not generate equitable funding due to inadequate property taxes. Judge Linton Lewis Jr. ruled that the then current system of funding was unconstitutional as it did not provide an “efficient” system as based on the 1851 Ohio Constitution. The state legislature, however, appealed the decision and won in the 5th District Court of Appeals. But in 1997 the State Supreme Court upheld the decision of the Lewis court and ordered the legislature to create such a system that would satisfy the dictates of the constitution.

Three more times, in 2000, 2001, and 2002 the state Supreme Court would find the system of funding to be inefficient. Finally, in 2003 the court determined that the legislature had essentially made progress enough to merit an end to the legal wrangling. The U.S. Supreme Court concurred and did not agree to hear an appeal in that same year. In 2012, we still await a equitable and adequate system of funding for education.

Part Three: The Current Crisis in Education Funding

With the DeRolph decision essentially made moot, new developments occurred in the late 1990’s to further complicate the matter of school funding. In 1997 the Ohio School Facilities Commission embarked upon a massive program to construct new schools in the state largely due to the tobacco settlement. Roughly $2.3 billion dollars have thus far been spent to replace Ohio’s aging schools. In Ashtabula County alone, Grand Valley, Geneva, Jefferson, and Lakeside have experienced the construction of new schools coupled with the demolition of the old. No doubt these facilities are impressive and state-of-the-art, but there remains one issue–the continuous struggle to operate given the current system of funding.

In 1998 a ballot initiative was proposed that would have raised $1.1 billion with the implementation of a one cent increase in the sales tax. If passed, half of the revenue would have provided relief for schools while the other half, relief for property owners. It failed. That same year, Bob Taft was elected governor. He wanted to be known as the “education governor” but such was not to be the case as the war on terror coupled with economic stagnation proved to be stumbling blocks to enacting real reform. His successor, Ted Strickland, did attempt to lay the foundation for a new approach to funding. However, like his predecessor, was not able to fully implement sufficient economic reforms.

Currently, John Kasich occupies the Governor’s Mansion (or he would have if he had not opted to live at his home so that his children could attend a private school). Kasich contends that he inherited a budget deficit of $8 billion. To deal with the shortfall, he cut approximately $3 billion to K-12 education and another $1.5 billion to higher education (according to the Ohio Education Association and the Ohio Federation of Teachers). The Kasich administration and those who support him in the legislature (to no surprise) contend that he has increased state spending on education. (It is accurate that funding for non-public charter schools has increased significantly during the Kasich administration). Rather than debate the veracity of either position, let us examine the facts right here in Ashtabula and Geauga counties with emphasis on our own 99th District. Here then, are the realities of school funding locally.

At this writing Conneaut, Geneva, Grand Valley, Jefferson, and Lakeside in Ashtabula County as well as Ledgemont in Geauga County are all looking at massive cuts to teaching and programming. Only Edgewood and Chardon will be relatively unaffected this year. The point is, regardless of what the governor or his supporters might argue, millions of dollars will be gone to support public education. After cuts, voters will invariably be asked to support what is left of our schools in the form of levies. Levies, no doubt, that are based primarily on the collection of property taxes. All this in a time when many households are pinched hard to simply survive.

This, then, is the new reality. The state has balanced its budget on the backs of the local districts. Ultimately, it is the students who will suffer in the short run and our greater society in the long run.

To make matters worse, state funding for local governments has also been decimated. Hence, these entities will also be forced to ask the public for dollars in the form of levies. It is a one-two punch with devastating results. Worse still, with the elimination of estate tax coupled with the phase out of the tangible personal property tax, more revenue will be lost. In short, a perfect storm for funding has been created by cuts and phase outs. In the meantime, who will suffer?

What is to be done? What can be done? These questions point to the heart of the crisis and will be addressed in our last installment.

Part Four: The future of Funding

Public education in Ohio has been deemed a necessity since the early formation of the territory and the evolution of that area into a state. That tradition held firm in the 19th century and for most of the 20th. Now, however, public education has become an increasingly contentious issue for lawmakers and the general public alike. Before we examine the issue of funding, however, we should first determine the collective value of that which we seek — or seek not — to preserve.

First, can we agree that education, in general, is desirable for society to survive and thrive? The answer to this question must be a resounding “YES!” For without education our democracy, our economic machinery, our very quality of life will be threatened as we will be surpassed by other states and nations who do espouse education as a basic right.

Second, if we agree that education is critically important, then the next logical question to be asked is this: “What kind of an education should be delivered?” On this issue there will be differences. For example, should we permit choice in the form of private vis-a-vis public schools? Again, in our great state and nation choice is a fundamental right. Therefore, private and public schools ought to exist in tandem enhancing our culture in the process. But if private schools are financed privately, then should we, as taxpayers, continue to support public schools using public money?

To really understand this question, we must ask another. “Why must we value public schools?” Is this concept of public education antiquated and no longer practical? At this point we must question the purpose of public schools. Is it important to create an informed citizenry to maintain and improve upon our democratic government? Is it important to provide art, music, physical education, consumer science, foreign languages, etc. in addition to the core subjects? Do we seek to educate the whole of the individual or merely that which is deemed to be minimally essential? Ultimately, whose responsibility is it to pay for this great undertaking? And what price will we as a society “pay” if we fall short or our responsibility?

If we can agree that we must provide a holistic education to promote the greater good, then we must then grapple with the question of school finance. How is this to be accomplished? This is the arena in which difficult questions must be raised and answered. Careful consideration should be given to all possible solutions to school funding. It is the critical issue of our time at the state level. For if we do not adequately address this issue, not only will we lose this generation of students, but the ripple effect of ignorance will be felt for generations to come. Even Exxon Mobil, a petroleum giant, has taken up the challenge with their “Let’s solve this” exhortation featured in various TV advertisements.

Our policymakers must understand the significance of public education. They must also understand the cost of public education. And they must also understand the dire necessity of addressing this issue immediately. Eighteen years have elapsed since the DeRolph decision. Various administrations and legislatures have come and gone and still our collective future still hangs precariously in the balance. Wise leadership and counsel must be chosen to wrestle with this vexing dilemma. If we really value an “efficient” system of education, we have no choice but to act responsibly.

Cutting education funding is easy. Finding a solution is not. Therefore, my fellow citizens of the 99th district, I challenge you to take the difficult path. Let us come together and work together to solve this problem. For if we do not solve this problem together, we will not solve it at all.