The Little Miami school district almost ceased to exist. It has been in Fiscal Emergency for two years, meaning that a panel appointed by the State is running their school district, not the local School Board. They had closed down buildings, eliminated arts, music, physical education, AP classes, and busing. Parents were pulling kids from the district and enrolling them elsewhere. There was talk of dissolving the district and parceling out the territory to the surrounding school districts.
It's a tale we should learn from. Little Miami isn't a school district in an impoverished rural area. Rather it's an affluent bedroom community of the Cincinnati/Dayton metro area. Like Hilliard, it had been mostly farmland until the last twenty years, when it was rapidly developed and covered with upscale houses. According to the Ohio Dept of Education's Cupp Report, the average property valuation per student in Little Miami is $178,000, which is 15% more than ours here in Hilliard. Average income is almost identical to ours.
Their schools perform very well, achieving an Excellent rating on their State Report Card, with a Performance Index of 102.9.
So how did they get into so much trouble?
One problem seems to be that they didn't pay attention to the balance between residential and commercial development. The Little Miami local property tax base is 94% residential/agricultural, compared to 75% for Hilliard. And because their per-pupil property valuations are high, they don't get much state funding - $2,900 per pupil in FY11, and that has gone down slightly in recent years (our state funding was $3,600/pupil in the same year).
That means the burden of funding their school district falls substantially on the back of their local homeowners. While their cost of operations rose due to both growth in the number of students, as well as growth in the compensation of their teachers, staff and administrators, they had no other place to go for additional funding than the homeowners, and the voters refused - repeatedly.
The effective operating millage (ie not including bond levies) paid by Little Miami homeowners was 24.39 in FY11, compared to 42.03 for those of us in the Hilliard school district. At their millage rate, the average Little Miami homeowner was paying
As a district in Fiscal Emergency, what solutions did the state-appointed oversight Board come up with? They said an operating levy issue had to be put on the ballot - a whopper this time - and it had to pass. They didn't say what would happen if it didn't pass, but the implication was that the district would be dissolved. I'm not sure that would be an easy, or politically acceptable solution either.
After all, why would the surrounding districts want to take on that mess? Absorbing Little Miami would just screw up the residential/commercial funding mix of the 'acquiring districts,' forcing them to raise their taxes (or cut programs/services) to underwrite the cost of the new kids from Little Miami, who would not be bringing enough funding with them - even after being lifted to the tax rate of the acquiring district.
That scenario was avoided. The Little Miami district put a whopping 13.95 mill operating levy on the ballot, and it passed, raising the property taxes of the average homeowner by
The Little Miami situation was entirely predictable, and avoidable. But the general ignorance of the public in regard to school economics allowed them to be led like lambs to the slaughter.
Who was doing the leading? The land owners, land developers and home builders of course - same as always. I have confidence that during the housing boom, potential buyers were being enticed to come to the bucolic setting of Maineville OH, where their kids could attend the high-performing and safe Little Miami Schools, which by the way also has the lowest property tax rate in Warren County.
The problem is that with every house built, the school economics got more screwed up: the incremental taxes generated by a new home do not cover the fully-loaded costs of the school age kids who will live there. If there is not commensurate commercial development to help pay the bill, the cost of new kids has to be underwritten by the rest of the community.
Meanwhile the land owners, land developers and home builders ride off into the sunset with their pockets stuffed with all the money the new homeowners borrowed to get into a great school district (see also "How Should Our Public School System Be Organized").
Why should we in Hilliard care about what happened in Little Miami?
Because those same dangers lie ahead for us. The Hilliard City School District grew from a little village operation into one of the ten largest school districts in Ohio in the span of twenty years. The student population exploded, we constructed new school buildings at the rate of one per year, and our taxes took off.
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We' re in a kind of quiet time right now. No levy on the ballot, and another year to run on the teachers' contract. We have some room to grow in our school buildings, and enrollment has been stable for several years.
I think this makes it an excellent time to embark on a community education program with the goal of equipping folks to engage in the dialog about where we should go next. In a way, we're fortunate that the recession came along and stopped what could easily have become a runaway train - putting us in the situation of Little Miami.
We have the opportunity to go forward in a well-managed manner if we use this interlude to get our strategic plan together, taking input from all the stakeholder groups. I hope we will begin this process at the annual Board Retreat, coming up in September.
Your thoughts are appreciated.
Your thoughts are appreciated.