Ohio’s new budget is bad news for public education, and a model of how to kneecap the institution. Reposted with permission.
The two-year state budget, passed by the Ohio Legislature last week and signed by Ohio Governor Mike DeWine late last night, cuts taxes for Ohio’s wealthiest citizens; significantly underfunds the public school finance formula designed to ensure that our state’s over 1.6 million public school students—no matter where they live—will have an adequate and equitable education; increases funding for private school tuition vouchers; reduces funding for the state’s public libraries; and awards $600 million to Jimmy and Dee Haslam for building a new Cleveland Browns stadium.
The Ohio budget this year is the product of Republican gerrymandered supermajorities—24 Republicans and 9 Democrats in the Ohio Senate, and 65 Republicans and only 34 Democrats in the Ohio House.
New Ohio Budget Cuts State Income Taxes
The new budget replaces Ohio’s graduated income tax with a flat tax, resulting in tax cuts for the wealthy and at the same time eliminating over a billion dollars of state revenue. Signal Ohio‘s Andrew Tobias reports: “That new top tax rate of 2.75% is lower than any surrounding state and lower than any time in the past five decades… About 96% of the $1.1 billion in annual lost revenue… will stay in the pockets of those earning $138,000 or more….” The new state tax cut follows two decades of previous Ohio tax cuts.
Tobias quotes Ohio state Representative Brian Stewart (R-Ashville), chair of both the Ohio House Finance Committee and the Budget Conference Committee, defining the new Ohio budget’s philosophy of extreme individualism along with the budget’s abandonment of essential civic institutions like public schools and public libraries: “Government is not entitled to the fruits of Ohio’s labor, and our residents deserve to keep as much of their own money as they possibly can,” Stewart said. “This budget sends the signal to job creators, workers, families, to everyone in America that is looking to build a better life: we are rolling out the welcome mat.”
Legislators Chose NOT to Fully Fund the Fair School Funding Formula
In a brief video posted just days before the Ohio Senate draft of the state budget became the precursor of most of the final budget plan, a Democratic state senator representing a collection of Cleveland’s east-side inner-ring suburbs, Kent Smith described just how the budget will damage the state’s public schools. As a seasoned legislator and a former member of Euclid, Ohio’s board of education, Smith adds that he and other Democrats on the Ohio Senate Education Committee had little input, and that the final budget passed without one vote from a Democrat in either legislative chamber.
Senator Smith believes that the following provisions of the new budget will undermine the capacity of the state’s 610 public school districts: the failure fully to fund the Fair School Funding Plan; a dangerous measure curtailing school districts’ use of carry-over balances from year to year to manage their finances; and an increase in spending on private school tuition vouchers.
Four years ago, the Ohio Legislature undertook the phase-in over six years (three budget cycles) of a new public school funding formula, designed by a panel of experts. The new formula, called the Fair School Funding Plan, was designed to correct for the disparate capacities of wealthy and poor, urban, rural and suburban school districts to raise their local share of public school funding through property taxes. The new formula calculates each school district’s local funding capacity by measuring the school district’s property valuation as well as the average income of the district’s residents (to measure their ability to pass local school levies). The new formula is also designed to factor in what each school district must spend—its costs—and then to calculate what the state must invest in each school district to compensate for differences in school districts’ local funding capacity and disparities in regional cost of doing business. A fair school funding formula ensures that school funding is adequate and that state funding is distributed equitably to ensure that the school districts in poor areas can afford to provide enriched programming to serve all children’s needs.
In a June 27, 2025 analysis of the new budget, Ohio school funding expert, Howard Fleeter¹ explains that while the framework of the Fair School Funding Plan (FSFP) was technically completed in this year’s budget, the legislature immediately undermined the plan by failing to pay for the full cost of the required services:
“One of the most important features of the FSFP is its utilization of an inputs-based approach to determining adequacy which results in a base per-pupil amount which can vary across districts based on the number of students and their distribution across grade levels… The following steps are required in order for the FSFP to be considered to be fully funded… (T)he (plan’s ) phase-in percentages should be increased from the current 66.67% in FY 25 to 83.33% in FY 26 and then to 100% in FY 27. In order to not just fully phase in the funding formula but to adequately fund it, the base cost in FY 26 should be based on FY 24 input data and the base cost in FY 27 should be based on FY 25 input data. This step will both ensure that the formula remains adequate over time but will also address the issue of a declining state share of (Ohio public school) funding, which has been largely caused by annually updating the school district property valuation and income data used in the state/local share calculation but not annually updating the input data used to compute the base cost.”
Fleeter adds that, in the current fiscal year (FY 2025) under the budget that passed two years ago, the state is paying 38.4% of public school funding in Ohio. In the new budget, in which the legislature has failed to update the cost data, however, “the average state share (of total school funding) will decline to 35.0% in FY 26 and to 32.2% in FY 27….” When a state fails in its responsibility to fund schools, the funding burden falls more heavily and more inequitably on local school districts.
Fleeter compares the legislature’s investment in public school funding to the legislature’s investment in private school tuition vouchers. He explains that state state foundation funding for Ohio’s traditional school districts—spread across the state’s 610 local school districts—will increase by $281.9 million over the Fiscal Year (FY) 2026-2027 biennium compared to current funding levels.” Fleeter continues: “Voucher funding is slated to increase by $327.1 million over the FY26-27 biennium…. This increase is $45 million more than the increase slated for the traditional K-12 districts over the biennium, despite the fact that K-12 districts educate roughly 8 times as many students as do private schools.”
While I have not yet been able to locate the precise amount of formula funding Ohio’s public school districts will receive from the state in this budget compared to what they would have received if the Fair School Funding Plan were being fully funded, Policy Matters Ohio calculated that the earlier House version of the budget would have provided $2.75 billion less, and the Senate budget (which became the precursor of the final plan) would have provided $2.74 billion less than the fully funded Fair School Funding Plan. Clearly the new budget is providing well over $2.5 billion less than what the Fair School Funding Formula would have allocated on the promise of compensating for school districts’ disparate capacities to raise enough to pay the cost of services providing all children with the equitable and adequate education promised in the Ohio Constitution.
DeWine Vetoes Plan to Force School Districts to Return any Carryover Balance Higher Than 40% to Local Voters
Both the House and Senate budget drafts included a flawed proposal to limit school districts’ carryover balances from year to year. If a school district had more than a 30% carryover balance, the House budget said school districts would have to return the money to the local voters. The Senate plan instead said school districts could hold on to the carryover balance unless it rose above 50%. Legislators have claimed this would reduce property taxes at a time when property valuations have appreciated. The budget conference committee compromised; the new state budget limits school district carryover balances to 40% before districts have to give the money back to the voters.
Fortunately Governor Mike DeWine vetoed this ludicrous proposal.
School districts maintain carryover balances after they pass local school levies in order to stretch the revenue from any levy for as long as possible. Because Ohio has a tax freeze law (House Bill 920), which limits school districts’ access to revenue when property appreciates, school districts must mount repeated levy campaigns to accommodate inflation. By law, all Ohio taxes must be voted on. School districts regularly plan for the future by asking voters for more local property tax millage than is needed in any one year and then operate from a carryover balance to stretch the length of time between levy campaigns.
In his new “On the Money” Fleeter shows why requiring school districts to return any carryover balance over 40% is a ridiculous plan: “While touted by legislative supporters as ‘property tax relief,’ the tax reductions mandated by the… cash balance provision would not be linked to increases in property taxes caused by the recent large increases in reappraisal… in any coherent way. Instead districts whose taxes may be relatively low but have carefully managed their assets to built up a cash balance will likely see a significant portion of the contingency fund wiped out, while other districts that have not managed their resources as carefully and have low cash balances would not been impacted… Many districts that have recently passed operating levies will likely see much of these revenues returned to voters.”
Some of the Other Miscellaneous Budget Provisions that Will Be Harmful to Public Schools
- Governor DeWine vetoed the legislature’s plan to establish a new Education Savings Account voucher program for non-chartered, non-public, unregulated, mostly religious schools. The new voucher program would cost the state $35 million annually.
- The new budget has set aside a $108 million bonus to reward “high performing” school districts as measured by standardized test scores, even though research has shown that test scores most often reflect parents’ aggregate income.
- The new budget cuts Ohio’s 19 member state school board, which now includes 11 members elected by the public, to only 5 members, all appointed by the governor.
- Governor DeWine vetoed a legislative mandate that all school board elections will be partisan, a provision that would feed political division.
The vetoes identified here were among Governor DeWine’s 67 vetoes. Right now, however, there are gerrymandered, veto-proof, 3/5 legislative majorities in both chambers of the Ohio Legislature. Legislators have the capacity to override any of the governor’s vetoes.
Although the governor vetoed some of the disturbing items in the state budget, there remains widespread dismay about the large and damaging provisions for public education in this new state budget. Public school parents and citizens who believe the public schools are the center of our neighborhoods and communities join Ohio’s educators in worrying about the difficulties the new budget will pose for our public schools and for our state’s 1.6 million children and adolescents who are enrolled.
¹Howard Fleeter, “On The Money,” Hannah News Service, June 27, 2025, (available free in many public library research collections)