The argument can be boiled down to a philosophical question: Who should have control over funding, and through that, control over spending as well?
One view is that the state government should have almost complete control, which primarily means the power to raise taxes as needed to fund whatever curricula and programs our state officials deem to be necessary. They deeply object to the need for school districts to periodically ask local voters for more money.
The other view is that the people of each local school district should have a direct vote on the funding they are asked to provide, and that it is a good thing that the local school district must go before their local community to justify the need for more money. Readers of this blog know that I land firmly in this camp.
The DeRolph case is the one in which the Ohio Supreme Court held that the funding system in place at that time (1997) was unconstitutional, in respect to the Constitution of the State of Ohio, which says:
The General Assembly shall make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state; but no religious or other sect, or sects, shall ever have any exclusive right to, or control of, any part of the school funds of this state. (Article 6, Section 2)Many Ohioans mistakenly believe the Supreme Court declared property taxes to be unconstitutional. This is not correct. What the Court said was that an over-reliance on local property taxes is a symptom of an unconstitutional system.
The second mistake many make is the belief that our current funding system is unconstitutional. The DeRolph ruling applied to the funding system which was in place in 1997, and that system has been replaced - twice - first by the so-called Evidence Based Model made law during the Strickland Adminstration, and then again by the temporary funding system enacted in the first Biennial Budget of the Kasich Administration.
Neither of those funding systems were challenged in the courts, so we don't know if they too would have been judged to be unconstitutional.
Soon, we'll have yet another funding scheme in place. Will it be challenged?
At the bottom of this is an argument as to what this section of the Constitution really means. Some believe it means that every school district in Ohio should receive sufficient funding from the State such that a "thorough and efficient" education can be delivered to every student without the need for augmentation by any local property taxes whatsoever.
To accomplish that, two things have to happen: a) someone needs to come up with a way to determine exactly how much money is required - per student - to deliver a thorough and efficient education; b) the state has to collect enough tax revenue in order to fund that amount, plus fund all the other programs the citizens of Ohio expect from their state government.
So what is the answer to the first question? How do we determine what constitutes a "thorough and efficient" education? Is it just the basic courses needed to enable a student to pass the Ohio Graduation Test? Is it the Common Core Standards? This can be reasonably debated, but there is no one right answer. The Ohio Department of Education could be given the responsibility of making recommendations, but ultimately, this is a political decision which falls on the shoulders of the Governor and the General Assembly. Of course, those change every couple of years.
Pretending that we can come to agreement on what the curriculum should be, how much will it cost to deliver it to the students?
According to the 2011 CUPP Report issued by the Ohio Department of Education, there were in 2011 a total of 86 school districts rated "Excellent with Distinction," the top rating awarded. In those districts, the per-student spending ranged from $7,182 in Avon Local Schools (Lorain County) to $21,459 in Orange City Schools (Cuyahoga). The median among these schools is $9,582 and the average is $10,262. It is reasonable to assume this amount - about $10,000/student/year - should be enough funding to deliver a 'thorough' education, if we can agree that an "Excellent" rating on the State Report Card indicates 'thoroughness.'
So let's pick $10,000 per student per year as the amount of funding which is required to deliver a 'thorough and efficient education.' With the statewide enrollment at 1.6 million students, this means the State would have to come up with $16 billion, just to fund the K-12 schools.
That's a tall order. The current state budget puts aside $6.5 billion for K-12 education, out of a total state operating budget of $27 billion. Increasing the K-12 budget to $16 billion would mean adding nearly $10 billion (54%) to this line item, or 37% to the overall state budget. Who is ready for their state income taxes to go up 37%?
The more likely approach to increasing the K-12 budget by $10 billion would be to take significant amounts of funding from other budget lines. Where should we start? Medicaid? Higher Education? I know some of you are saying that there is all kinds of waste and unnecessary spending in our state government which we can eliminate before we make any cuts, and that may well be true. But remember, what is waste to you might be a lifeline to others.
If the decision was made to radically alter our public school funding approach such that the state would provide this $10,000/student/year, and the extra $10 billion were raised via higher state taxes, then would it not be possible for many school districts to repeal most if not all of their local operating levies, offsetting most of the sting?
I absolutely would be willing to pay 37% more in state income taxes if it meant no local school property tax. After all, we're retired folks living off our retirement savings - meaning not much income - which makes our property taxes all the more daunting. My wife and I could save a ton of money if we shifted to a school funding system paid for with state income taxes.
Would it make much difference to a family in the prime of their earning years, which is usually when they also have kids in school? Maybe not. There is a strong correlation between one's income and the value of one's real estate. It might be kind of a wash - that is, income taxes might go up about the same amount property taxes would go down.
How about the young adults just getting started in life, and who often live in apartments? Certainly the amount of property taxes collected per occupant is much lower for apartments than for single-family homes. Changing the funding emphasis from property taxes to income taxes could really hurt these young folks, unless the income tax rates are progressive enough to prevent them from absorbing the full impact.
What about the wealthy districts which want to spend even more on their kids?
Of the 352 school districts rated Excellent or Excellent with Distinction, 119 of them - including Hilliard City Schools - spend more than $10,000/student/year. Seven of them spend more than $15,000/student/year.
Some argue that no district should get to spend more than any other district. They believe that if a community has the capacity to be taxed more, that 'excess' money should be drawn into the state coffers and redistributed to poorer districts. I think that's going a bit too far, and the Supreme Court said as much in the DeRolph opinion.
Stephen Dyer, one of the architects of Governor Strickland's Evidence Based Model and author of the blog 10th Period, echos the belief of many when he says dependence on local property taxes needs to be reduced because districts have to keep coming back to public with additional property tax levies. The concern of this camp is that the voters just might say "No!" The world is much more manageable and predictable (to those with this perspective) if such matters are decided by elected officials who are responsive to lobbyists who write big campaign checks. I think the amount of money spent for lobbying at the Statehouse on education matters would astound most of us.
Why do school districts need more money every year anyway? In a few cases, the reason is growth. As the student population increases, so does the need for more teachers and staff.
But for most school districts, the year to year growth in costs is driven by compensation and benefits increases. If you are not familiar with the way teachers are compensated in Ohio, this article may help.
I'm not trying to start a debate about whether teachers are underpaid or overpaid - please don't make vitriolic comments about that subject (they'll get deleted). All I'm saying is that school funding is spent almost entirely on compensation and benefits, and that any discussion about revenue needs to recognize that this is where the money gets spent.
So here's the point: The debate over who controls funding is a really a debate over who controls compensation - how many teachers, staff members, and administrators get employed, and how much they get paid.
Six years ago, a mighty effort was made to add a school funding amendment to the Constitution by referendum - that is, bypassing the Governor and the General Assembly. The campaign was called "Getting it Right for Ohio's Future." This amendment would have given the State Board of Education the power to set the cost of a 'thorough and efficient education,' and would have required the General Assembly to allocate whatever money was needed to fund it. The amendment was supported by virtually all of the public education community, including the teachers' unions and many school boards - including Hilliard's. Our school board even authorized employees to serve (in their off-duty hours) as solicitors in the effort to get the 400,000 petition signatures needed to get the issue on the ballot.
Fortunately, this referendum effort was withdrawn before it went before the voters. I'm quite sure the primary message from the amendment campaign would have been to imply that a vote for this amendment would be a vote to reduce property taxes, and on that basis, it stood a good chance of getting passed and made law. I'm still not sure why the petition was withdrawn - maybe one of you know.
I'm eager to see what Governor Kasich brings to the table. I'm not eager to hear the bickering and propaganda that will follow.
Mostly I want to know what it means to Hilliard City Schools. I'll let you know what I find out.