Friday, August 24, 2007

District Finance Committees: ACT FOR SCHOOLS

This is one part of a two part post about the committees created by the School District to deal with strategic financial matters.

There exists two citizen committees which were formed by the leaders of the school district to deal with financial issues of strategic significance. One is called ACT for Schools. ACT is an acronym which stands for Advocate, Collaborate and Teach. The other is the Finance Committee. I served on both in their formative days.

This is the assignment of the ACT committee: "[the] ACT for Schools community committee has been charged with educating and informing the community about school funding in Ohio and serving as advocates of the district to state and local legislators."

The list below are the "Issues of Concern" published on the ACT for Schools page in the District website. My comments on each point are in italics:

  1. The unconstitutionality of school funding in Ohio;

    I am not trained in the law, and therefore am quite sure that I don't understand the legal nuances of the several Ohio Supreme Court rulings. But it seems to me that the Supreme Court was less concerned about the mechanism for funding than the fact that many school systems in our state are legitimately underfunded. The Court was concerned about the role property taxes play in school funding, and the truth is that for districts with low property values, this a problem.

    But this is the reason there exists a mechanism for the State of Ohio to augment the funding generated by local property taxes. The problem has never been that this algorithm is flawed, it is that the Governor and General Assembly fail to fully fund it. Therefore the districts least able to operate solely on local funds are shortchanged. How is the Supreme Court to deal with this? What happens if the Supreme Court orders the Governor and the General Assembly to fully fund school districts as prescribed by the existing formula - and the General Assembly refuses?

    Supporters of a proposed amendment to the Ohio Constitution say an amendment is the only way to force the Governor and General Assembly to make school funding have top priority in our allocation of resources. I think they have other motives, and have already written extensively on this subject.

  2. Establishing a per-pupil cost for adequately educating a child;

    How do you actually figure that out? Well it turns out that the current funding process does exactly that. This is how Robert Stabile describes it in his "Ohio School Finance Handbook:"

    The Legislature uses an inferential approach to determining base cost. The process is to to select high performing districts, determine their base cost, and then infer that all districts in Ohio could be high performing districts if they had the same amount of money to spend for base costs.
    Seems like a valid process to me.

  3. The “Robin Hood” method of funding that is currently in use;

    What a strange thing to say! This is exactly the purpose of the State being involved in school funding - to allow districts without adequate local resources get funding help from the wealthier districts (see the Dispatch editorial on this). Where else do State tax revenues come from?

    And why would anyone think that any solution to the state's school funding problem would result in wealthy districts like Hilliard getting more money? Wouldn't you think it likely that we could get less money if others are getting more? The State has already taken a step in that direction by freezing our funding - we get no more funding from the State this year than we did last year, even though there has been growth of a few hundred students.

  4. The current unfair practice of reducing state aid to school districts after property reappraisals, resulting in lost revenue based on inaccurate tax accounting -- commonly known as “phantom revenue”;

    This point has some merit. Due to a supposedly unintended interaction between two separate laws, the amount of state funding a district receives is reduced slightly when local property is appraised to higher values. However you would that this is the problem based on how often the Superintendent talks about it. It's not.

  5. House Bill 920, which unilaterally rolls back all taxes instead of allowing tax revenue to increase with growth in a community;

    This was the law sponsored by then State Senator George Voinovich and passed in 1976 in response to rapidly escalating property values in the Cleveland area. This law says that when a piece of property is appraised to a higher value, the millage rates of all levies associated with that property will be adjusted so that the dollar amount of property taxes paid by the homeowner remains the same.

    That seems like a good idea to me. The Superintendent says it prevents School District revenue from increasing with inflation. The trouble is that property values are not an indicator of inflation. Nor is inflation the reason the District needs more money every year. The need for more money is driven by the huge and growing amount of money needed to pay the salaries and benefits of the faculty, staff and administrators in our District.

    I like the idea that the School Board and administrators have to convince us every once in a while that they need more tax dollars from us. It doesn't have to be painful. They just have to be more open, and communicate better -- which is what this committee was supposed to be about.

  6. Unfunded mandates;

    This is talking primarily about the federal No Child Left Behind (NCLB) program.

    Okay, but every school district in the country is subject to this law. If we expect more Federal money to fund this mandate, where does it come from? Other states? Other programs? The answer is that it just comes out of our own pockets as federal taxpayers, so at best it is a wash to send it to Washington DC first.

    However, there is one nuance worth mentioning: to the extent that our school district is being unusually (compared to other districts) stressed by the presence of immigrants absorbed as the result of federal policies, there should be some additional federal funding, or a relaxation of the NCLB requirements. According to one report, we do receive some funding of this kind today.

  7. The state budget passed in July, 2005 decreases funding from the state, further shifting the burden of school funding onto local taxpayers.

    This is a fact. The Governor and the General Assembly have a tough problem - between the requirements for school funding and health care funding, the bulk of the state budget is spoken for, and the demands increase every year. Do they raise taxes, or cut programs? The answer is a little of both. From our perspective as a school district, we should expect we will collectively pay more taxes and our school district will receive less unless we make our voice heard.
So how is the ACT team doing on its assignment? I don't know how well it has done in its role as an advocate to the state legislature. I suspect that the development of the proposed funding amendment rendered any such effort unneeded.

How about the mission of educating the community? One set of Powerpoint slides was produced and perhaps a few sparsely attended public presentations were held (I attended one), but that was a couple of years ago. The job is most definitely not finished.

It has barely begun.