In the 17 years since the Ohio Supreme Court ruled the state’s school funding system as unconstitutional, Ohio schools continue to rely upon property taxes to pay for buildings and operate classrooms, much to the dismay of districts and taxpayers alike.
Districts such as Canal Winchester repeatedly go back to voters with their hands out and their hearts hopeful for money to keep the lights on, teachers working, and more space as a steady stream of new students continues to march through the doors year after year.
On Feb. 18, a group of concerned residents met in a fellowship hall at the Grace Bible Church in Canal Winchester to discuss possible options to a property tax levy. The district has an 8.9 mill operating levy on the March 4 ballot, which, if approved, would generate $3.7 million in additional funds for the cash-strapped district.
The annual additional cost per $100,000 of property valuation is $272.56. The property value used to calculate taxes is the appraised value determined by the county auditor’s office and is the amount listed on the tax statement for each individually-owned property.
Discussing school financing
Facilitated by James Bell, school board members David Brobst and John Kantner, along with Treasurer Joyce Boyer, former superintendent Steve Donahue, and State Representative Larry Flowers spent two hours at the Feb. 18 meeting reviewing and updating the history of the DeRolph ruling, discussing school finance in Ohio, and funding options, including a local income tax.
"In the DeRolph case, the districts claimed the state failed to provide an efficient educational system by relying heavily on property tax," noted Bell. "The state has forced school boards to take it upon themselves to fix the situation on their own through property tax levies. The governor in his most recent State of the State did not address this issue, but it is something he ran on. A tax levy is a tourniquet, a Band-Aid. If we don’t get the patient into surgery, we’re going to lose a limb and the education lottery, in my opinion, is a joke."
According to Flowers, despite public opinion to the contrary, over the last several years, the state has responded to the educational crisis by increasing state funding. In 1991, state funding per pupil was approximately $2,636. In 2009, the amount is budgeted at $5,732.
"The state increased funding every year and that was in part a response to the lawsuit," said Flowers, who is a member of the state’s Finance and Appropriations Committee. "The state has increased funding to education and in most years, the amount of increase is higher than inflation. The lottery was sold to be an answer to school funding and the amount varies over the years. Of the total statewide amount for education, Canal Winchester gets about $900,000. However, when they started putting lottery funds into the budget, they started taking it out of education, so it wasn’t an influx of new dollars."
In addition, Flowers said millions of dollars for school facilities renovation and replacement is administered by the Ohio School Facilities Commission and is derived from a multi-million dollar tobacco settlement.
"It was another piece of funding going out to the local level that wasn’t there before," said Flowers. "In school districts like Canal Winchester, which are fast growing, we have property wealth and don’t get as big a hunk of the pie as other districts. It’s all based on property wealth and it’s difficult for districts like Canal Winchester to keep up with the school funding issue. As I see it (funding crisis), the biggest thing causing this is we’re getting new kids. In the legislature, we’re still waiting for his (the governor) plan."
Kantner emphasized, once construction of new buildings is complete, the district expects to receive more than 30 percent of the project cost back from the state. However, districts must continue to rely on three funding sources-the state foundation, local, and federal-to pay for buildings and operational costs. He said the state funding formula is based on district wealth and as the wealth of the community increases, the amount of state foundation funding decreases.
"When additional houses are built, it adds additional kids," stated Kantner, "but (because of tax rollbacks), the pie gets smaller."
Other ideas
When a potential increase in the local sales tax was proposed, Flowers responded that the state currently does not allow an increase in sales tax as suggested and, while a statewide increase in sales tax, income tax, or property tax are options, Canal Winchester would end up becoming a donor community.
"The legislative leadership is waiting for the governor to come up with a plan," Flowers said.
In being as clear as possible with the public, as far as the district’s financial forecast and needs, Brobst maintained board members and administrators have always told residents the district needs to abide by state law in balancing the budget and in explaining what options are available.
"It’s been since 2001 that we’ve had new money into the district," remarked Brobst. "Levies haven’t increased since 2001. We are at a point, financially, where we can’t continue to operate without cutting things. And they’re not really cuts; it’s just what we have to do to balance the budget. An income tax is an option. We had one defeated in 2004. But it’s an option I’m more than happy to look at. The thing to consider with an income tax is that it is variable and there are still some issues about accountability. Whether it’s a property tax or an income tax, they’re all just different ways to get dollars into the coffers."
