By John Higgins
Beacon Journal staff writer
The state will play Robin Hood with disappearing federal stimulus money, taking from wealthier districts to help poorer districts absorb the loss.
The Office of Budget Management released district-by-district calculations for how Gov. John Kasich's proposed two-year budget will affect school districts.
The state is not replacing federal stimulus money, which accounts for about 7 percent, or $457.5 million, of state funding for schools.
Kasich's proposed formula cushions the blow to poorer districts by shifting state money from districts with high property wealth.
State aid comprises about 45 percent of total school spending, but that number varies greatly among districts depending on their ability to raise money through local property taxes.
School treasurers around the state scrambled Thursday afternoon to make sense of the state's projections and still had some unanswered questions, but here's what it looked like after a few hours of crunching:
Wealthier districts appear to be losing more in state aid than they received in federal stimulus money under the governor's proposed budget, said Barbara Shaner, associate executive director for the Ohio Association of School Business Officials.
''The way they're taking the stimulus payments out is not dollar for dollar for each district for what they had,'' Shaner said. ''Some of those higher-wealth districts were not prepared necessarily for how much they would be losing.''
Copley-Fairlawn, for example, will lose about 57 percent, or $943,602, of its state funding in the first year.
Revere will lose about 55 percent, or $1.1 million, of its state funding.
Their dollar losses will be among the 25 largest in the state.
Both districts get back some of that loss in the second year of the budget.
However, Akron, Barberton and Canton will all see an increase to ease the loss of the stimulus money.
''We were expecting to lose about $8 million in state aid and now we're going to get a $6 million increase, as of right now,'' said Akron treasurer Jack Pierson. ''If things stay the way they are, we're in better shape than what we had projected we'd be in.''
But the big boot that hasn't dropped yet is what effect the loss of local business taxes will have on districts that rely heavily on commercial support.
The state passed tax reforms in 2005 that included the elimination of a tax
on business machinery, equipment and inventory. It was called the personal tangible property tax and it had been on the books since 1846.
The changes shifted more of the burden for funding schools away from businesses and onto homeowners. But the state planned to make districts whole, phasing out that reimbursement gradually so the loss didn't come all at once.
Gov. Ted Strickland extended the period of full reimbursement an additional two years, but Kasich's proposed budget speeds up the phaseout, beginning next year.
That is expected to cost school districts another $428.2 million in the first year, but it isn't reflected in the spreadsheets released Thursday.
Pierson projects that Akron will lose $5.4 million from the loss of the tangible personal property tax.
''We can't do anything until we see what we're definitely losing in tangible and what exactly they have in those numbers,'' Pierson said.
Shaner said districts won't lose more than 2 percent of their total revenue because of the phase-out, but the state hasn't released the specific numbers for school districts and local governments, which also rely on the taxes.
Mogadore relies on tax
Nobody's watching that more closely than Mogadore's treasurer Chris Adams.
Mogadore's state funding will decrease slightly over the proposed two-year budget, but it's the possible loss of reimbursement on business taxes that worries Adams most.
Mogadore receives about 6 percent of its total local revenue from the inventory tax, the highest of any district in Summit County.
He would welcome a reduction capped at 2 percent a year, but if the phase-out proceeds as it was originally planned, it could throw Mogadore into a fiscal emergency requiring state takeover. ''If we lose a million over two years, it's going to be devastating for us,'' Adams said.
He said he knew it was coming, but like all of Ohio's treasurers, he thought he had two more years. Adams projected a loss of $1 million at the end of the 2013-2014 school year.
But if that loss comes next year, it could plunge the district into fiscal emergency.
''The problem is, I'm just trying to keep afloat now,'' Adams said.
Teachers took a freeze in base pay and tripled their contributions to health care in their new two-year contract. Adams is treasurer for Springfield schools in addition to Mogadore, which saves money.
But still the district is facing cuts if it fails to pass its levy on the May 3 ballot, including the elimination of high school French and art classes.
The music teacher, who teaches high school choir and elementary general music, would have to work half time, which would affect class sizes and offerings.
''I'm putting on an 8.49-mill levy and it's going to generate $750,000,'' Adams said. ''They take away tangible, and in two years, I could lose over $1 million. It more than wipes out a levy that some would consider difficult at best.''