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Schools' treasurer calls governor's budgetary forecast 'not rosy'

By MARC KOVAC Capital Bureau Chief Ellin Walsh Reporter Published: February 19, 2017 12:00 AM

"It's not a rosy picture when we look down the road," says Tallmadge City Schools Treasurer Jeff Hostetler regarding Gov. John Kasich's initial bi-annual state budget proposal. Presently, the state legislature is reviewing the proposal and may make changes to it.

Hostetler told Board of Education members Feb. 15 that Tallmadge schools are projected to see a $137,000 increase in state funding in Fiscal Year 2018 and an $18,000 increase in 2019. However, Hostetler said the $137,000 increase in Fiscal Year 2018 would be offset by $239,000 lost through a reduction in tangible personal property taxes. "So we're seeing a net loss of $102,000 in the first year," according to Hostetler. In the second year, with the $18,000 projected increase, the rest of our (tangible personal property tax) reimbursement will be gone -- another $231,000 -- so we see another loss of $213,000. So over the biennium, we're at $315,000 less state funding than where we're at currently."

State officials promised to make up for the loss of personal tangible tax by building those monies into the state funding formula, Hostetler says, but that has never happened. "Tallmadge schools' total state funding is at a level where it was about 12 years ago," Hostetler said, adding, "It is disturbing that the state doesn't make funding public schools a priority but yet funds failing charter schools the way they do."

Superintendent Jeff Ferguson said he expects to see "numerous unfunded mandates" incorporated into the governor's final budget proposal. "Typically we spend the summer every two years reacting to unfunded mandates that are put into the budget bill that require us to do something with locally funded taxpayers dollars," Ferguson reported.

"It's ironic," Hostetler said, "Next month is 20 years ago that the Supreme Court first declared the funding system for schools in Ohio unconstitutional and here we are, 20 years later, and it still doesn't work. It's an inefficient, ineffective system."

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Kasich's budget director is hopeful the legislature will move an executive budget school funding proposal that would send less state money to some school districts that have lost students.

The governor has offered comparable law changes in the past, but lawmakers have balked at the move.

But Tim Keen, director of Ohio's Office of Budget and Management, told reporters recently, "I think we have the best opportunity we have had in a long time to get this guarantee proposal adopted into law. I think we have targeted it and crafted it in such a way that it just makes sense. If you lost an appreciable number of students, why should we continue to pay you the same amount of money that we previously did?"

Keen offered the comments during an afternoon question-and-answer session with Statehouse reporters, a few days after Kasich rolled out his proposed spending plan for the next two fiscal years.

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OBM recently released spreadsheets noting projected funding levels for the state's 600-plus school districts. The numbers aren't set in stone -- they're estimates used as part of the budget process, with actual totals determined later after taking into account local valuations, student enrollment and other factors.

The governor said that he is proposing a $200 million increase in funding for primary and secondary schools over the biennium. But that doesn't mean all districts will receive more money next year than they did during the current school year.

Additionally, the governor has proposed lowering the guarantee base districts receive if schools lost more than 5 percent of their student population.

Those that have grown or lost up to 5 percent would be guaranteed the same funding total they are receiving this fiscal years. Those that have lost more than 5 percent would see that guarantee drop to, at most, 95 percent of the current year total.

"Just go out on the street and take a poll of people," Keen said. "This district lost 17 percent of its kids, should we pay it the same amount of money that we did last year? Where else in the world would that happen but in school funding? What would the man on the street say? I think that's the test the members of the general assembly ought to use to judge."

He added, "If there are fewer kids, why are we paying the same amount of money to education them?"

Keen also said, for many districts projected to see decreases in the formula funding, the totals aren't that large.

Of the 346 districts in that category, 187 would see a decrease of less than $100,000, he said, adding that 71 of those would see a reduction of less than $5,000.

"A lot of these numbers are very small," he said.

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

Email: ewalsh@recordpub.com.

Phone: 330-541-9419

Twitter: @ EllinWalsh_RPC

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