Dozens of school boards will be preparing for levy campaigns in the fall, and trying to explain as best they can why the addition of roughly $1 billion in Ohio’s new school budget is a helpful step but one that still falls short of adequate and equitable financing to ensure “a thorough and efficient system of education.”
State lawmakers point out that they have increased spending for K-12 education substantially. That is correct, to a degree. An analysis by economist Howard Fleeter of the Education Tax Policy Institute shows that in 2014 and 2015, state funding for basic aid and reimbursements for revenues lost through the phaseout of business and utilities taxes add up to $15.2 billion, an increase of about $831 million from the 2012-2013 budget.
But bear in mind that K-12 funding took it on the chin in 2012-13. Schools received about $1.4 billion less in 2012-13 than in 2010-11 as a result of cuts in state funding and the loss of federal stimulus funds. Thus, even with the encouraging infusion of $831 million, state basic aid in 2015 falls short by about $607 million of the funding level five years earlier. The new budget only partially makes up for the revenue drop-off. Meanwhile school boards face new mandates and costs, including technology upgrades and revisions in curriculum and testing for the Common Core program.
On the recurring issues of adequacy and equity, the budget again yields mixed results. The budget determines “core” aid per pupil and adjusts funding levels to reflect costs related to such factors as student poverty, property and income wealth in the district, special education and transportation. The plan also offers a “guarantee,” extra funds to ensure that no district falls below its 2013 aid level.
On the face of it, all this suggests a reasonable mechanism for adequate funding. But again, a closer look reveals something of a numbers game.
For example, under the formula devised for funding, state aid would amount to about $7.3 billion in 2014 and $7.4 billion in 2015 if lawmakers followed it strictly. But they don’t. The law places a cap in both years on the how much of an increase a district can gain, regardless of what the formula indicates. Thus, in 2014, the cap reduces by about $815 million the amount of money the state would have had to spend on school aid. The state saves itself $498 million more in 2015. In effect, lawmakers manipulate the formula to fit what they want to spend, not what the formula requires. This, in short, is the practice of “residual budgeting.”
For poor rural school districts especially, the budget also turns out to be less than equitable as their percentage increases in state aid, from 2013 to 2015, are smaller than for urban and suburban districts. The budget is an improvement on the previous one, without question, but in the end, it does not do enough to ensure the same opportunities in all districts to gain the necessary education.