In Ohio, Jan Resseger looks at a legislative plan to cut taxes for the wealthy at the expense of everyone else, including school students. Reposted with permission.
On Wednesday, June 12th, the Ohio Senate passed its proposed budget for fiscal years 2026-2027. The senate-approved plan cuts taxes for the wealthiest citizens of our state; significantly under-funds the public school funding formula designed to ensure that our state’s over 1.6 million public school students—no matter where they live—will have an equitable and adequate education; restricts the property tax carryover balances school districts use to compensate for the ups and downs of the local property tax levy cycle; diminishes funding for the state’s public libraries; does nothing to diminish the diversion of $1 billion annually to a lavish private school tuition voucher program and another $1 billion annually to charter schools from the public school foundation budget; and awards $600 million to Jimmy and Dee Haslam for building a new Cleveland Browns stadium.
Legislative leaders have defended tax cuts and other cuts to public services as essential for a economic growth, but the Governor’s budget and the House and Senate budgets all favor individualism and reduce state support for the institutions that are at the center of every community.
Concerned that neither the Governor’s proposed budget, nor the House’s nor the Senate’s version protects the public schools, Canton Mayor William V. Sherer, II convened an emergency forum on the state budget’s public education provisions last week at the Canton Memorial Civic Center. Along with the school superintendents of several Stark County school districts, Mayor Sherer addressed a crowd of over 1,000 citizens:
“Public education is under attack from Columbus, and the effects could be potentially fatal for some Stark (County) school districts…. When you talk about educating children, there are no shortcuts. When you wage war on public education, you are attacking the mortar that holds the community together…. We need to remain unified in our resolve in support of children, educators and schools in our community…. You can say this is not my lane or my problem, but this is all of our problem right now.”
The superintendent of the Plain Local School District, Brent May described the damage his school district would face in any of the currently released versions of the state budget: “Your public school district will not look the same next year if some of these things happen… Under the governor’s proposed budget, Plain Local would lose $2.7 million in fiscal year 2026 and an additional $1.7 million the following year. That plan would put funding back to 2021 levels and doesn’t account for inflation… Under the Ohio House Plan, Plain would be flat-funded for the next two years followed by a loss of more than $8 million in the following two years… The Ohio Senate’s proposed budget has Plain losing $2.2 million next year and every year after.”
Canton City Schools depend on state revenue for nearly 80 percent of their school budget. Canton Superintendent Jeff Talbert explained that he worries about the underfunding of the new school funding formula, the Fair School Funding Plan, whose full phase-in had been scheduled in this year’s state budget: “Legislators are hell-bent on tearing it apart.”
For years, Ohio legislators have plugged in whatever amount they feel they can afford to fund the public schools. In this year’s budget, funding the public schools comes after spending over a billion dollars for EdChoice private school tuition vouchers in the recent school year and regularly diverting over a billion dollars every year to privately operated charter schools.
The political philosopher, Benjamin Barber describes the consequences when states invest in individualism and undermine the common good by moving constitutionally promised school funding to privatized alternatives like private school tuition vouchers and privately operated charter schools: “Privatization is a kind of reverse social contract: it dissolves the bonds that tie us together into free communities and democratic republics. It puts us back in the state of nature where we possess a natural right to get whatever we can on our own, but at the same time lose any real ability to secure that to which we have a right… Public choices rest on civic rights and common responsibilities, and presume equal rights for all. Public liberty is what the power of common endeavor establishes, and hence presupposes that we have constituted ourselves as public citizens by opting into the social contract. With privatization, we are seduced back into the state of nature by the lure of private liberty and particular interest; but what we experience in the end is an environment in which the strong dominate the weak… the very dilemma which the original social contract was intended to address.” (Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole, pp. 143-144)
The legislature should choose the public interest and the well being of our state’s children as the Ohio House-Senate conference committee negotiates a final FY 2026-FY 2027 state budget by the June 30th deadline.
First: The legislature must fully phase in the Fair School Funding Plan. Wealthy and poor, urban and rural and suburban school districts all have different capacities to raise local school funding through property taxes. The new Fair School Funding Plan formula is designed to calculate 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 capacity 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 vast disparities in local school district capacity and disparities in regional cost of doing business. High poverty school districts need additional funding, and Policy Matters Ohio reports that the Fair School Funding Plan would deliver more state funding to 246 high poverty school districts, while the Senate’s budget plan would provide additional state support for only 21 high poverty districts. 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.
Second: The legislature needs fully to fund the Fair School Funding Plan. Setting up a fair formula and then refusing regularly to update the factor that reflects school districts’ real costs immediately invalidates the formula. The Fair School Funding Plan was designed to promise much needed stability to the school funding process. If the legislature fails fully to fund the Fair School Funding Plan, Ohio will return to its decades-long practice of funding schools more arbitrarily as a “budgetary residual” or what’s left as the pie is divided—something the Ohio Supreme Court deemed unconstitutional back in the original 1997 DeRolph decision.
It is time for the legislature to accommodate the very purpose of the Fair School Funding Plan: to pay for the real cost of the programs the bipartisan designers of the plan identified as serving our children’s needs and pay for what the state constitution promises: a thorough and efficient system of common schools. Current budget drafts are based on FY 2022 cost data which has not been updated to reflect rising school district expenses. The Plain Dealer‘s Laura Hancock reports that the Senate budget passed last Wednesday would increase funding for 63 percent of the state’s school districts, and leave nearly 40 percent behind.
Third: The state budget is not the right place to set policy for local property tax reform. Both the House and Senate budget drafts include a flawed proposal to limit school districts’ carryover balances from year to year in order to limit the growth of property taxes due to property appreciation in the school districts whose local effective millage is at the twenty-mill floor.
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 levies.
In recent testimony he presented to the Ohio Senate Education Committee, school finance expert, Howard Fleeter outlines why he believes the legislature’s proposal to limit school district carryover balances is unworkable: “A major reason that districts build up cash balances is the ‘levy cycle.’ Because House Bill 920 rolls back millage rates of all voted levies, school districts that are not at the 20 mill floor must rely on the continual passage of new levies in order to generate additional local revenue merely to keep up with inflation. Because expenditures escalate from year to year, the typical ‘levy cycle’ involves passing a levy for an amount which creates more than current expenditures initially but less than projected future expenditures… Eventually annual expenditures will surpass the district’s amount of annual revenue, and the district will begin spending down their cash balances… (and place) a new levy before voters…. However, under the… (legislature’s) cash balance cap provision, school districts that have recently passed operating levies will likely see much of these revenues mandatorily returned to voters… The alternative is for the districts to place levies on the ballot nearly every year trying to stay as close to the cap as possible.”
The Ohio Senate’s proposal to allow school districts to hold on to 50 percent carryover balances (instead of the House’s 30 percent carryover limit) might delay the need to pass new levies a little longer, but data posted by the Ohio Senate Finance Committee (School District Cash Balances 2014 through 2024) show that a 50 percent carryover limit will still curtail long range planning by myriad Ohio school districts.
There have been proposals to help taxpayers in school districts operating at the 20 mill floor—districts whose taxpayers are not protected by HB 920 from rapid property tax appreciation. The legislature could, for example, establish a property tax circuit breaker, but property tax reform should not be part of the state budget process.
Fourth: Ohio Does NOT need another income tax cut on top of years of previous state tax cuts. The Ohio Senate’s budget proposal would further reduce state revenue by cutting taxes, diminishing the state’s capacity, for example, fully to fund the Fair School Funding Plan. Describing the Senate budget, the Plain Dealer’s Anna Staver explains: “The Senate’s budget includes a $1.4 billion income tax cut, which comes from eliminating Ohio’s top tax bracket of 3.5% and replacing our tiered system with a flat 2.75% tax rate for anyone making over $26,000… According to an analysis from Policy Matters Ohio… more than 98% of the tax benefit would go to the top 20% of earners—those making at least $139,900 a year.” She quotes Policy Matters Ohio’s Bailey Williams: “A flat tax is a handout to the most well-off among us, and it will devastate Ohio’s ability to provide services that benefit everyone.”
In a report last October, Williams released shocking data about how tax cuts over the two decades between 2005 and 2024 have perpetually favored the wealthy at the expense of middle and lower income Ohioans: “Ohio families with the least resources—those making less than $24,000—pay more annual taxes on average today than they did before 2005. The average household among the top 1 of Ohio earners, with incomes above $647,000, now contributes over $52,000 per year less than they once did. The result is a loss of about $12.8 billion a year in revenue…. ”
The Ohio Legislature’s budget conference committee should:
- fully phase in the Fair School Funding Plan;
- fully fund the Fair School Funding Plan by updating the 2022 cost data that measures school districts’ operating costs with 2025 cost data;
- avoid dealing with local property tax reform in the state budget by leaving out any restrictions on school districts’ carryover balances; and
- remove any provision to institute a flat tax or further cut state income taxes in this budget.