Changes to the government’s funding formula are long overdue.
The state’s school funding system, which relies heavily on local property taxes, was declared unconstitutional in 1997 in DeRolph v. the state of Ohio. There have been many attempts to create a more equitable funding system over the years. But Wendy Patton, senior project manager at Policy Matters Ohio, thinks they’ve come up with a series of “plasters and patches.”
“What we found is that the old formula failed in almost all school districts, but in different ways,” Patton said.
Ryan Pendleton, chief financial officer of Akron Public Schools, noted that prior to the past two years, when the funding formula was frozen, more than 80% of the state’s school districts were not on the formula. Their funding was either capped or guaranteed by the state.
The new plan comes at a cost on what it takes to educate a student today in Ohio, said Pendleton, who was part of the group of superintendents and treasurers who helped build the funding model of the school.
The model first sets a base cost for each student, taking into account costs such as extracurricular activities and utilities, Pendleton said. Then it builds on that cost based on additional needs in areas such as special education, technology or transportation.
The plan also redefines the national and local share of education, relying less on ownership and placing more emphasis on a community’s “ability to participate” by examining factors such as median income and tax returns, Pendleton said. The old formula would have assumed that a neighborhood like Akron or Cleveland with lots of property would have to shoulder a greater share of education funding, regardless of the high level of poverty in the cities.
The Ohio Legislative Service Commission budget analysis notes that the formula actually calculates a single base cost and a single “local capacity amount per student” for school districts. Funding is secured, but not fully funded, for fiscal years 2022 and 2023.
Rather than being created as its own law, the formula is part of the budget. It is not yet fully funded and changes could be discussed in future budget cycles.
“It’s easy to design a school funding system,” said Chad Aldis, Ohio vice president of policy at the Thomas B. Fordham Institute. “It’s very difficult to actually allocate the resources to fund it.”
The old per-student system was based less on need than on “what the state had to give,” said Tom Sutton, director of the Community Research Institute at Baldwin Wallace University. Sutton has been following school funding for decades, having written his dissertation on DeRolph 20 years ago.
Districts with high levels of poverty among their students, whether in urban or rural areas, will have higher costs, Sutton said. There isn’t a definite solution to address these needs yet, and it’s not something that can be fixed in a short period of time. It requires investment.
“The parallel is about health issues,” he said. “It costs more to manage a chronic health problem that no one has figured out how to solve.”
Sutton believes that if this plan persists and is funded, it will address the injustices of reliance on local taxes raised in the DeRolph case.