Sunday, March 24, 2013

Rite of Spring

My NCAA Tournament bracket is pretty much trashed, although I still have a shot with the Final Four. Could OSU, Indiana, Michigan State and Michigan all get there, ending with the Bucks playing Michigan or Michigan State in the Final? One can dream, right?

The other Rite of Spring going on right now is the preparation of the Biennial Budget for the State of Ohio. I don't know who thought of doing the state budget in two year chunks, but it makes a lot of sense to me. Since the formal legislative process takes nearly six months, it makes no sense to try to budget annually. A four year budget would be too long - many things can change in that span of time.

So our state government puts a new budget in place on odd-number years, this year being one of those. The process begins a year earlier, when the Office of Management and Budget (OMB) starts working with the various state-funded agencies to gather information and teach them how to assemble and format their budget requests. From there, it looks like this:

click to enlarge
There are a large number of state agencies which submit budgets, but the big dollars are spent on Education (56%), Human Services (23%) and Corrections (8%).  Some like to say that Ohio's government is in the business of education, medication, and incarceration.

Similarly, most of the revenue to fund the budget comes from just a few sources: Personal Income Taxes (40%) and Sales and Use Tax (37%) being the bulk of it. Of course, we can't forget the 'sin taxes' on cigarettes and lottery profits, which each contribute 4% to the budget.

Unlike the Federal Government, our State Government is required to have a balanced budget. Our representatives in Washington can play the game of who can create the most pork-belly spending for their home districts, even when it creates massive deficits. Sen. Robert C. Byrd of my home state of West Virginia was perhaps the all-time master of this. It's a wonder the state wasn't renamed Byrdland - every else there seems to be named after him.

Fortunately, Ohio's lawmakers must eventually develop a budget which causes no more money to spent than is taken in. That process is going on right now.

The Governor has submitted his budget to the General Assembly. It's a substantial document. It's also a political document. The Governor uses the budget to bend the government to follow his policies. One can be sure that by the time the budget is submitted by the Governor, a lot of lobbying has already taken place. But this is only the first step.

Next the House of Representatives has their turn. They do their work by introducing several Bills which collectively authorize the appropriations of funding to the various agencies and programs. This process is the same as for any other Bill, in that the Bills are first drafted by one or more Representatives, with the help of the Legislative Service Commission (LSC), then submitted to a Committee, traditionally the House Committee on Finance and Appropriation - a very powerful committee, as one might imagine.

Hearings are held, amendments drafted and incorporated, and eventually the Bills are submitted to the whole House for consideration. The House may pass the amended Bills, or send them back to Committee for additional work - although an effective Speaker will not usually bring an appropriations Bill up for vote until the Speaker knows it will pass. In other words, the politicking mostly happens while the Bill is still in Committee (and in discussion with the army of lobbyists that descend on the Statehouse during budget season).

This is where we are in the process for this budget.

When finally passed by the House, the appropriations Bills go to the Senate, who almost always want more changes. Since the Senate and the House must ultimately pass a single version of a Bill for it to be sent on, a Joint Committee is formed to hammer out the differences, and eventually the appropriations Bills are passed.

From there it goes to the Governor for his signature, which makes the Bills become law. To this point, the process is virtually identical to how federal appropriations Bills are passed by Congress. However, the President of the United States has only three choices when presented with a Bill from Congress: the President can sign the Bill and make it law, veto the Bill and send it back to Congress, or just ignore it, in which case the Bill becomes law in 10 days anyway.

Ohio is one of the forty-three states which grants the Governor the right of "line item veto." If you were to read the final analysis of Amended House Bill 153 (129th General Assy), which was the major appropriations Bill for the past biennium, you would find multiple mentions of items which were vetoed by Governor Kasich.

That process is political theater as well, of course. With the same party controlling both the Governor's office and the General Assembly, the leaders can easily make deals as to who gets to take credit for good things, and who gets the blame for tough decisions. That's why there's such a battle over how the House and Senate district boundaries are drawn - it's very important to be the party in power, and gerrymandering is a powerful mechanism for maintaining power once it is achieved. Democrats and Republicans alike play this game. I would much prefer that representative territories follow municipal, county and natural geographic boundaries, but we're currently much too polarized for that to happen.

The centerpiece of the Education budget is the funding formula for Ohio's public schools. It get tinkered with every budget, and occasionally is completely rewritten.

In 2010, Governor Strickland introduced the Evidence Based Model, a radical shift from the prior approach. Whatever arguments there might have been in support of or in opposition to the principles of this model, before it became law it was politicked into a set of rules such that most Ohio public school districts received about the same amount under the EBM as under the previous system.

Then when Governor Kasich came to office, he fulfilled his campaign promise to eliminate the EBM, but he wasn't ready, or didn't have the political capital, to introduce something new. So he pushed through a temporary funding scheme which was again mostly "same as what you got last time," albeit with a big whack to districts with a significant commercial/industrial base (ie - the acceleration of the phase out of Personal Property Tax Reimbursement, which is most definitely affecting Hilliard City Schools).

In this new budget, Governor Kasich has finally put his ideas for school funding on the table. Like any new funding proposal, it has winners and losers. One of the consequences of the requirement for a balanced budget is that there is only so much money to go around, meaning a new dollar won for education is a dollar lost for some other agency. And a win for one school district usually means a loss for another.

The Governor's new formula is getting very vocal opposition from the poorer districts in the state, many of whom will receive no additional money. Meanwhile, some of the more affluent districts in the state would get an unexpected increase. Hilliard City Schools would receive about $5 million more for FY14 than we received for FY13. Olentangy City Schools would get much more than that.

The reason is that both districts have seen significant enrollment growth in the past decade, and that was not recognized in the either of the two prior funding systems. The Kasich formula would correct that, but it also means that the poorer districts, who in that same period have been the primary beneficiaries of significantly increased school funding statewide, won't see much if any increase next year for the simple reason that their student population has been stable or declining.

Every agency has its constituents. The voters are one class of constituent, although increasingly in our country the voters are a second-order concern for our elected officials. Their primary attention is on the huge lobbying groups,  who are the source of a politician's lifeblood: campaign dollars and voting blocks. The legislators create and fund programs which in turn generate revenue and/or benefits for the associations. That's the reason the biggest associations have offices very close to the Statehouse. Even state government agencies have lobbyists - in other words, we pay taxes to pay people to influence lawmakers to make laws that benefit government agencies.

Here is a list of all the lobbyists currently registered in Ohio. It has over 1,500 entries, or 11 lobbyists for every member of the General Assembly.

Engineers often speak of "Signal-to-Noise" ratio. Think about listening to an AM radio station: the 'signal' is the music and the 'noise' is all the static. Ideally the signal is very clear, and the noise is imperceptible. In that case, you would say that the signal-to-noise ratio is very high. But drive under a high-voltage power line while listening to AM, and all you hear is static - the noise. The primary reason for shifting from analog to digital TV is to minimize noise.

I fear that in politics, the lobbyists have become the signal, and we voters are the noise. The lawmakers listen primarily to the lobbyists, except for Election Days when we get to decide if they will stay in office. Then all the transmitters get trained on us as the politicians, lobbying groups, and political action committees use their considerable financial resources to bombard us with endless campaign commercials and annoying automated phone calls.

I call that noise, but in reality it's a highly amplified, high density signal. And it works. That's why they spend all that money in this manner. So they remain dependent on the big blocks on support coming from special interest groups.

I created this blog six years ago to try to inject some alternative viewpoints into the conversation. I ran for office to try to be a voice for those viewpoints inside the system, and am honored that the voters of our community gave me the opportunity to do so. I hope I've been able to have to have some impact.

The rest is up to all of you. To get the kind of government you want, you have to speak up and engage. As has been said many times before, democracy is not a spectator sport.

Sunday, March 17, 2013

Sunshine Week

March 10-16, 2013 was national Sunshine Week, a time of national discussion about the importance of access to public information - that is the information produced by and maintained by the elected and appointed officials of all levels of government in our state. The Ohio Attorney General used this week as an occasion to release the latest edition of the "Yellow Book," a manual summarizing Ohio's laws in regard to Open Records and Open Meetings. Trust me, this manual is much more understandable for us lay folks than the language of the Ohio Revised Code.

As a public body, all Boards of Education of Ohio's public school districts fall under the these rules. If you have any questions about what constitutes a public document, what rights you have to see such documents, or how public meetings are to be conducted, this book is pretty helpful.

Friday, March 8, 2013

Supplemental Material for March 11, 2013 Board Meeting

Here are the supplemental materials for the School Board meeting to be held next Monday, March 11, at 7pm at Tharp Sixth Grade School.

There's a lot of meat in these materials. For starters, it includes the Monthly Financial Report prepared by the Treasurer. It's actually a collection of several reports, including a list of every Accounts Payable check written during the entire month. You'll see that there are some whoppers - like the checks for $millions to fund the payroll account, pay the health insurance bills, and send the contributions to the several retirement systems. But it also includes all the little checks - everything is there for inspection. I review this list every month, and frequently ask the Treasurer about items that catch my eye.

There is also a substantial report from the Board's Policy Review Committee, including a list of policy changes the Committee recommends be adopted. Some of this enanates from advice we receive from the Ohio School Boards Association. When the General Assembly passes a law dealing with the public education system, it often includes language like "The Boards of Education shall implement policies which..."  The OSBA monitors these changes to the law, and drafts model language for the local school boards. Our Policy Review Committee uses that input, and input from the Administration, to draft language specific to our school district. That's what you see in this report.

Over the course of three school board meetings, these policy changes are on the agenda for discussion, should there be any. On the third reading, it is customary to pass a resolution to adopt the policies, making them 'law' for our district.

Some very important policies are on the list this time around, notably a pair of policies which address the new evaluation processes for teachers and administrators. I'm asking that the Administration brief us on this. I'm particularly concerned about the additional workload this places on our administrators, from the principals who must evaluate the teachers, to the central office administrators who must evaluate the principals.

Policy IKA enumerates the changes to the graduation requirements which will be phased in over the next several years. I note in particular the requirement that all students, starting with the Class of 2014, must pass Algebra II to graduate. I'd like to understand more about this new requirement, both in terms of what it might mean to staffing, and whether we anticipate that it will have a negative impact on graduation rates. I'm just not convinced that being able to solve systems of quadratic equations is a skill necessary for each and every member of our society.

If it were up to me, I'd put a lot more resources into making sure folks understand basic economics and personal financial management - crucial skills in a capitalistic democracy, especially now that the relatively brief era of defined benefit pensions is all but over.

I encourage you to read the summary of the policy changes, and let me or another Board member know if you have any concerns.

Tuesday, March 5, 2013

Patchwork Community

As we help Dr. Marschhausen prepare to join the Hilliard Schools team, it occurs to me that there are some pretty obscure yet highly-impactful political and economic arrangements which we need to help him understand. I don't think any other region in Ohio is quite like ours in this regard.

I've been writing about many of these political forces for years, and have always struggled with trying to condense all the information to an 'elevator pitch' (ie - what do you say when you find yourself alone in an elevator for 30 seconds with someone who can have a big impact on your life?). Dr. Marschhauser has many things to absorb about our school district and community, and we owe it to him to make the process as concise as possible.

I'm one of those who grasps information more quickly from images than I do words. So why not try to describe these relationships in an image?  Here goes:
click to enlarge
In words, it would go like this:
  • All of the City of Hilliard is in the Hilliard City School District, but not all of the Hilliard City School District is in the City of Hilliard
  • Parts of the City of Columbus and Other Suburbs and Townships are in the Hilliard City School District
  • Parts of the City of Columbus and Other Suburbs and Townships are in the Columbus City School district
  • Parts of the City of Columbus and Other Suburbs and Townships are in Other School Districts
  • The Big Darby Accord encompasses an area which is part of Hilliard City Schools, part of the City of Hilliard, part of Other School Districts (South Western), and all or part of several Other Suburbs and Townships
  • Other Suburbs and Townships are served by Other School Districts
While the key contractual relationships are:
  • The Water/Sewer Services agreements with the City of Columbus, which control which Township parcels a Suburb can annex and be provided water/sewer services. The City of Columbus has long used their control of the regional water/sewer system to limit how the suburbs expand, and to preserve "annexation corridors" between the suburbs.
  • The Win-Win Agreement with the Columbus City Schools, which controls how school district assignments are made following an annexation. Although the Win-Win Agreement is between Columbus City Schools and most - but not all - of the suburban school district, this agreement was in reality forged to put an end to the battle between Columbus City Schools, which was trying to preserve its student population and revenue sources, and the developers who were trying to profit from the "White Flight" generated by the busing program ordered by the Federal court to eliminate racial discrimination in Columbus City Schools.
The connection between those two agreements are:
  • When a parcel currently in a suburban school district is annexed into a suburb, which can happen only if the water/sewer agreement allows it, that parcel will continue to be served by the suburban school district.
  • When a parcel currently in a suburban school district is annexed into the City of Columbus, it will be transferred to Columbus City Schools.
So where does the Big Darby Accord fit into this?

In my opinion, the most significant element of the Big Darby Accord is a radical policy change on the part of the City of Columbus - that it will allow water/sewer services to be extended into unincorporated townships, ending their ironclad policy of providing water/sewer service only to parcels annexed into a city.

This opens the tens of thousands of acres of undeveloped farmland along the Big Darby Creek to residential development, and will allow it to stay in the two suburban school districts - Hilliard City Schools and South Western City Schools - exactly what the developers want.

We haven't had to deal with the economic effects of rapid residential growth for about a decade. The primary effect is that new houses don't generate enough new property tax revenue to fund the cost of the additional kids they'll bring to the school district. 

For example, it is my estimate (ie - not an official estimate by the Treasurer), that the new Hilliard Preserve development just approved by the Hilliard City Council will create the need for the rest of us to allocate at least 1 mill of property taxes to subsidize the cost of the new students coming from that development.

That means either voting to tax ourselves additional millage, or reduce spending on other programs and services.

Remember, the School District doesn't control development policy - the cities do. I've never understood why they're so eager to annex land to enable more houses to be built when it's not a beneficial thing for either entity. Who is reaping the benefits, other than the developers?