Ohio continues to disinvest in public education. Jan Resseger explains the problems that causes. Reposted with permission.
Before he retired in 2023 as the director of the Education Law Center, David Sciarra released a report defining the widely held principles of adequate and equitably distributed public school funding, as defined by the constitutions of the states:
“Today, there is broad agreement that the education guaranteed by state constitutions must be one that prepares all students for active participation as citizens in a democratic society and as valued contributors to a robust economy. Young people must have the opportunity to fully pursue their intellectual, academic, and vocational aspirations. This requires access to a quality, content-rich curriculum, delivered by qualified teachers in schools led by strong instructional leaders, and a safe and inclusive environment with sufficient in-school supports to address students’ academic, social and health needs. And we know that providing a constitutional education demands equitable school funding for all students and greater levels of funding to enable schools to respond to the additional needs generated by concentrated poverty, disability, lack of language proficiency, homelessness, and other challenges faced by so many of our children.”
The school funding conversation raging right now in the gerrymandered and deep-red Ohio Legislature has strayed far from Sciarra’s principle of justice defined by adequate and equitably distributed public school finance as a state responsibility.
The Plain Dealer‘s Anna Staver has been doing an excellent job of covering a raging controversy across Ohio right now about how to control the rapid rise in local property taxes that support public schools in a large number of school districts. House Bill 920, a 1976 tax law, severely limits the growth of unvoted property taxes by setting limits on local property taxes when school districts collect growing revenue as property appreciates, but a flaw in that law’s operation combined with accelerating property values has allowed property taxes to soar in 483 school districts of the state’s 609 school districts whose millage levels have been reduced by HB 920 to the 20 mill floor. Staver explains: “Since the 1970s, Ohio law has said schools can’t collect more than voters approved. When property values rise, millage rates drop to keep taxes roughly stable… But Ohio law doesn’t let rates for school taxes drop below 20 mills. Once a district hits that floor, taxes rise with property values—even if that means schools collect more than voters originally approved.”
Earlier this week, Staver outlined the findings of a working group appointed by Ohio’s governor to suggest a way to address the problem: “Gov. Mike DeWine’s Property Tax Reform Working Group didn’t settle on a single fix. Instead it approved a sweeping list of 20 recommendations, ranging from technical fixes to new relief programs… House Speaker Matt Huffman, a Lima Republican, told cleveland.com he will consider their ideas. But DeWine’s working group is one of several overlapping attempts to tackle property-tax relief in Ohio. Legislative Republicans have introduced more than 30 bills on the issue since the General Assembly started in January. At the same time, activists are pushing a constitutional amendment to abolish property taxes altogether—an idea 61% of people reportedly support. With so many competing plans in play, homeowners are left to wonder what, if anything, will actually change.”
Yesterday, the Ohio Senate voted to override Governor DeWine’s veto last June of a bill that banned three kinds of local property tax levies some school districts have been using to fund their schools. Anna Staver reported: “In 90 days, school districts and local governments will no longer be able to ask voters for emergency, substitute or replacement levies.”
Legislators seem far more worried about protecting local property taxpayers than they are about school districts losing operating revenue. School districts in Ohio must rely on local property taxes because the state’s investment in the public schools has been inadequate, and falling lower year-after-year, as a percentage of Ohio public schools’ total cost. Several legislative policy choices have undermined adequate school funding. In the two-year state budget, passed by the Ohio legislature in June, legislators failed fully to fund the last stage of a six-year phase in of a new, constitutionally equitable and adequate school funding formula, and invested $2.75 billion less state dollars in the public schools than if the plan had been fully funded. By underfunding the plan at the outset, lawmakers invalidated the long term operation of the carefully calculated mathematical formula. In the current state budget, the state also slashed billions of dollars in state revenue by transforming the graduated income tax into a flat tax, gave away large tax exemptions to the business community, and diverted billions of dollars to private school tuition vouchers.
Staver traces a history of declining state investment in public education: “In fiscal year 1999, the state covered about 47% of the base cost of education, according to the Ohio Education Policy Institute. This fiscal year, the state will cover 38%. By FY 2027, that share is projected to drop to 32%. As the state steps back, more of the responsibility for funding schools shifts onto local homeowners—through their property tax bills.”
Here is how fiscal experts at the Ohio Education Policy Institute, Howard Fleeter and Greg Browning explain Ohio’s situation today: “(M)ost school and local government budgets in Ohio are financed by a combination of state and local resources. However, this essential partnership has fallen increasingly out of balance over the past 20 years, with Ohio’s state tax burden falling while Ohio’s local tax burden has increased… A leading example is the share of school property taxes paid by Class 1 residential and agricultural real property owners. This share was 46.1% in 1975, and the business property tax share was 53.9%. In 2023, Class 1 was 67.5% and business property was only 32.5%… Additionally, state tax revenue growth since 2005 has not kept place with inflation as revenues have increased by 48.3% while inflation has increased at 66.5% rate… The relative decline in state funding for K-12 education has obviously placed more pressure on school districts to fill the gap through increased local funding, which for Ohio school districts primarily means the local property tax.”
As the legislature fails to pay its fare share of school funding and also tries to limit property taxes as housing valuations rise across the state, school districts will have only one choice: to mount myriad operating levy campaigns to replace the lost revenue they have automatically been receiving by being at the 20 mill floor.
Fleeter and Browning suggest a number of strategies including a circuit breaker based on taxpayers’ income levels to address rapidly accelerating property taxes, but they add one primary principle: “Consistent with the state/local partnership employed to fund schools… the solution to Ohio’s residential property tax problems should involve manageable and actionable state and local government fiscal reforms.” In order to reduce property taxes and at the same time fully fund the state’s public schools, the legislature will have to raise its contribution to the formula.
The enthusiasm for slashing property taxes across Ohio right now and the legislature’s preoccupation with this project demonstrates that many Ohioans and their elected representatives in the legislature have forgotten the principle David Sciarra defines as basic: equal access for all to a quality public education. Article VI, Section 2 of the Ohio Constitution defines the principle this way: “The General Assembly shall make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state….” Our children depend on our demanding that our legislators address their constitutional responsibility to invest our tax dollars into the kind of state support for public education that our state constitution demands.