Adding some light to the school funding discussion
By State Rep. Ron Amstutz, R-Wooster
Much has been said recently about the need to rework school funding in Ohio.
Given current challenges of taking school operating budgets or facility improvement proposals to the voters, we can understand the frustration of school leaders and community supporters.
But two misconceptions need clarification in order for these discussions to lead in more productive directions.
Property taxes are not the ideal means for providing the local share for constructing or operating our schools. They are an antiquated funding method. On this most of us can agree.
But the constantly repeated statement that the Ohio Supreme Court ruled the property tax as an unconstitutional means for funding our school is not an accurate reading of the four DeRolph opinions handed down by the court.
Repeating this urban legend over and over has the effect of encouraging voters to select “no” at the ballot box.
The majority opinions did criticize “over-reliance” on the property tax, but went on to state that reliance on property taxes is unconstitutional “only if the disparity is so dramatic that children in the poorest of our school districts are deprived of a basic educational opportunity, and a thorough and efficient distribution of funds need only ensure that each Ohio school district is financially able to offer an adequate education.”
We must remember that the four DeRolph decisions were responding to the many school districts across Ohio that joining the law suit in pursuit of more money. The decisions were all about applying pressure for doing more for our schools financially, not less. Repealing school district property taxes was not what the court had in mind.
Even so, it is fair to ask, “Why not replace the property tax if it is antiquated?” There may be a workable way to do this, but so far no one has brought that proposal forward.
Replacing school property taxes has been looked at a number of times, and led to the local school district income tax option that is in use by a significant number of districts. It was also a contributing factor to phasing out the property tax on business equipment and inventory and replacing it with a much broader commercial activity tax on businesses.
But there is a very practical reason why the property tax continues to be the big local funding source for schools and other local programs. Ohio already has some of the highest personal income tax rates in the nation even after we lowered our rates by over 16 percent in recent years, especially when local income tax rates are included.
Considering another approach, Ohio would have to more than double the state sales tax rate to use this source. We can talk about sales tax rates in the 14-16 percent range in order to drop our property taxes by roughly two-thirds, but that would create a whole new set of problems for our state. And this is why other states also continue to use the property tax as a major funding source for their schools.
It is worthwhile to continue looking for ways to make our taxes more competitive and equitable, but we must do so with a realization that the easy answers may be based on wishful thinking or incomplete homework.
A second misunderstanding, closely tied to the property tax viewpoint, is that nothing has really been done to respond to the court decisions. This also has been repeated so many times that many regard it as fact. It too encourages voters to say “no” at the ballot box to local school levies.
State operating assistance to our schools doubled during the fourteen years after the court suit was filed, while inflation grew by 31 percent in this time frame. These new funds are distributed on a sliding scale to bring lower wealth districts up closer to other district’s resources.
Additionally, billions of dollars have been distributed to school districts to help them rebuild their facilities, also on a sliding scale tied to local community resources.
These changes were all in line with concerns and pressure anticipated and then delivered in the four court decisions.
These state assistance levels were achieved by making funding primary and secondary education a top priority and, to some extent, by sacrificing other goals like making college more affordable in Ohio.
Eventually our state reaches a point where further spending increases can take us out of balance in the other direction, threatening the sustainability of our funding programs and placing Ohio at a disadvantage in competing for quality jobs. Balance is often in the eyes of the beholders – different for taxpayers than tax spenders.
Balance suggests that more attention be focused on federal and state mandates, especially in cases where they drive up costs without paying back in improved educational opportunities. Management of our schools is severely restricted by overlapping state and federal regulations. Even so, Orrville and Rittman have taken the lead in finding efficiencies by sharing administrative overhead.
Now new challenges in our state budget and in our method of funding schools have developed in the past two years. These include:
a large gap between sustainable state revenues and spending – a gap filled for the moment with temporary federal funding and other one-time funding sources;
another new state funding plan adopted last year without thorough review that is wildly out of kilter with actual funding levels and distribution in practice.
We need to face these issues squarely.
In order to do so effectively we must give up some of our treasured misconceptions, stop with the finger pointing and concentrate on more cooperative working relationships.