Tuesday, May 1, 2012

Believe It When We See It

The Columbus Dispatch ran a story today about how tax revenues from Ohio's new casinos would be funneled to our public school system.

Ohio Revised Code section 5753.02 says the casinos will be taxed at a rate of 33% of gross revenues.

ORC 5753.03(D)(2) says 34% of that will go to the "gross casino revenue county student as required by Article 6(C)(3)(b) of the Ohio Constitution."

Article 6(C)(3)(b) says "Thirty-four percent of the tax on gross casino revenue shall be distributed among all eighty-eight counties in proportion to such counties' respective public school district student populations at the time of such distribution."

According to the research done by the Dispatch reporters, the estimate is that Hilliard City Schools will get about $600,000 in FY13, and $1.4m in each of the following two years:

click to enlarge
Before we collectively yell, "Oh goody!"  let's understand that while we may get every dollar shown on this chart, it doesn't necessarily mean that our aggregate funding from the State of Ohio will increase at all.

As I have been cautioning for many years, the folks in the Statehouse don't think our schools - Hilliard City Schools - are underfunded. They see a school district that is among the best in the state, and a community which has consistently voted to raise its taxes in order to preserve the programming and services offered, while paying its teachers, staff and administrators well.

In other words, the folks downtown don't think we need more state funding to run our district at a high level of performance, and that allows them to send any new money they find elsewhere.

So while this extra casino revenue may get put into one of the funding buckets that makes its way to us, there may be this much or more taken from other buckets. That's certainly what happened in the current budget, where basic Foundation Aid was largely maintained at prior year's levels, but the Personal Property Tax Reimbursement Phase-Out was accelerated. The Dispatch story quotes the Treasurer of South-Western City Schools, Hugh Garside, being skeptical that they'll see any net increase in state funding. I tend to agree with him.

However, the story also quotes Rep. Mike Duffey (R - Worthington) as saying that this casino tax revenue should be considered as new money, and that 'districts should start conservatively counting casino money in their five year forecasts.'

I'll believe it when I see it.


  1. The Ohio Constitution requires that Casino money is not used to supplant other money. This paragraph:

    Tax collection, and distributions to public school districts and local governments, under sections 6(C)(2) and (3), are intended to supplement, not supplant, any funding obligations of the state. Accordingly, all such distributions shall be disregarded for purposes of determining whether funding obligations imposed by other sections of this Constitution are met

    I agree with your main point that the state could arbitrarily say that to meet its obligations to education under the constition all of a sudden requires hundreds of millions of dollars less than it did before, but I can't agree that districts should pretend that the casino money does not exist. What districts should do, in my opinion, is to modify their forecasts to produce a separate line for casino revenue. If you believe the state is going to cut foundation funding, that should be reflected in the appropriate spot on the forecast. In that way, you have transparency behind your district's assumptions vis-a-vis state revenue and casino money.

  2. That's a great idea! Have you mentioned it to our friends at OSBA?