Some local districts fare better than most

Most Ohio school districts will return to action during the next three weeks without much new state money to fund operations.

Under the new two-year state budget that the legislature passed this summer, the state’s 55 urban districts generally fared the best as far as funding. Suburban districts, overall, saw cuts — although that generally was not true in Franklin County.

is a relative term, however. School-funding increases average about 1 percent per year for Ohio’s 610 districts, roughly half of the projected rate of inflation. Urban districts, which are seeing the biggest increases, still average less than 2.5 percent per year.

“For some districts, it’s been a pretty long six years,” said Howard Fleeter, an analyst with the Ohio Education Policy Institute, noting that school-funding increases from 2011 to 2019 will total 7.6 percent. “Overall growth has not kept pace with inflation.”

Statewide, most districts face flat funding or cuts. The funding formula cap increases at 3 percent per year, except for some fastgrowing districts that were able to get larger increases. The formula also protects some districts from cuts, unless they are losing tangible personal property-tax reimbursements or have lost significant enrollment over two years.

The Department of Education breaks down districts into eight groups based on similar demographic and geographic characteristics. During the next two years, those classified as midsize and large urban districts will see average funding increases of about $300 per pupil, or more than 4.5 percent.

That includes Columbus, which is set to get 4.6 percent more over two years, a smaller increase than in the previous two-year state budget. The midsize group includes Whitehall, South-Western and Groveport Madison, which are expected to get two-year increases of 11.5 percent, 11.6 percent and 6.1 percent, respectively.

On the other end are large, wealthier suburban districts, which overall face a 1.9 percent funding cut over two years. Of the 46 districts in that category, 26 are getting flat funding or cuts. Smaller, generally less-wealthy suburban districts also see almost no funding change over two years.

But that’s not the case in central Ohio. Olentangy and most of the suburban districts in Franklin County will get funding increases, thanks to unique circumstances.

Three major factors determine whether a district receives more money: enrollment changes, reductions in tangible personal property-tax reimbursements, and, most prominently, changes in the state share index, which uses per-pupil property values and median income to determine what percentage of funding the state will cover. Essentially, the wealthier the district, the less the state covers.

Of the 368 districts that are seeing their state share index drop from 2017 to 2019, 80 percent get funding cuts or no increases over the next two years. Meanwhile, of the 212 districts expected to see a state share-index increase, 84 percent are getting more money.

Fleeter said the drop in the state share index for 60 percent of all districts — lowering the state’s overall share from 48.1 percent to 46.6 percent — continues to highlight a flaw in the formula. This is the second consecutive biennium in which the state share has dropped, potentially shifting more of the school-funding burden to local taxpayers.

“The same problems I had with the state share index — that it doesn’t properly take income into account — we still have that issue,” Fleeter said. The state share index fell for 90 percent of Ohio’s 229 rural districts, largely a result of lower enrollments and rising farmland values.

However, Olentangy and 13 districts in Franklin County saw their state share indexes rise. Of those, six have median incomes ranked in the top 50 in the state.

Olentangy and eight of 11 suburban districts in Franklin County will receive funding increases, compared with just 40 percent of suburban districts statewide. The two-year increases range from $333 per pupil for Reynoldsburg to $47 for New Albany.

Population growth is a key factor in the brighter funding picture in central Ohio. While 72 percent of Ohio school districts saw enrollment decline from 2014 to 2016, Olentangy and 14 of 16 Franklin County districts saw enrollment increases — all but Hamilton and Groveport Madison.

Enrollment gains help hold down per-pupil property valuations, a vital element of the formula’s state share index.

Three-year average per-pupil property values declined for only 14 percent of Ohio districts, but they dropped for 10 of 16 Franklin County districts. Of those 10, nine will receive funding increases, and the 10th, Worthington, also would get more if not for the loss of $3.8 million in tangible personal property-tax reimbursements.

Fleeter noted that Franklin County districts also benefit from a bit of lucky timing. The county went through a property value reappraisal this year, and the county auditor determined that home values had risen 14 percent since the previous update three years ago. Those higher valuations don’t matter in the funding formula now, but they will factor heavily when the state share index is recomputed in 2019 for the next state budget. If districts look wealthier, the state share is likely to drop.

“It makes a difference whether you recently went through a reappraisal or you didn’t,” Fleeter said.

Sen. Randy Gardner, R-Bowling Green, a veteran legislator who worked closely on the latest school-funding budget, said concerns about the state share index are fair, and he’s open to looking at them.

“I think we should continually evaluate every two years whether the formula is working or not,” he said.