UNIVERSITY HEIGHTS, Ohio -- With this month’s enactment of the “Fair School Funding Plan” into the state’s two-year budget, some much-needed relief is on the way to the Cleveland Heights-University City School District -- although questions remain as to how much and how soon.
Most important for the CH-UH schools, the new K-12 funding formula eliminates the “district deduct” model for EdChoice private tuition vouchers,which siphoned over $7 million out of the local publicschools in 2019-’20, and then as much as $9 million last year.
Under the proposed six-year rollout by the state,CH-UH will receive an additional $2 million in year one (2021-22 school year) and then another $1.3 million in year two (2022-23) over its current funding after the losses from voucher deductions are accounted for, a July 9 district statement noted.
This works out to anywhere from $3.3 million to $5.3 million being phased in by the end the second year (2022-23), at which point the governor and state legislature will consider their next two-year budget.
“There’s always ‘nuance’ to state budgeting, and we’re happy that the ‘district deduct’ model is comingoff the table for us,” CH-UH School SuperintendentLiz Kirby told the board of education at its July 6 meeting.
Kirby commendedparents, staff, students and community members for several years of advocacy -- aside frompotential litigationthrough the “Vouchers Hurt Ohio” coalition -- on behalf of the public schools, including testimony before state committees in Columbus.
“Unfortunately, that doesn’t mean we’re getting $7.5 million next year -- it doesn’t quite work thatway,” Kirby added. “But we’re happy that the (old) structure is out and we hope it stays out. And we do know that there are a lot more questions and information that we will be receiving and sharing.”
CH-UH Chief Financial Officer and Treasurer Scott Gainer had a three-hour online meeting scheduled for July 8 with the Ohio Association of School Business Officials, telling the school board prior that“there’s a lot of unpacking to do inthe biennial budget.”
The detailed amounts will be provided by Ohio Department of Education in October, and future increases past the 2022-23 school year as intended in the 6-year phase-in will depend on future legislatures who will determine the next two biennial budgets.
“Essentially, the plan is only funded for two years, not six as originally intended,” CH-UH School Board President Jim Posch noted in the July9 district press release. “And instead of getting the entire annual voucher deduct returned, we’ll gain $2 million in the first year.”
New formula
Gainer told the board July6 that it’s important to note that the state’s current funding model -- not just the “district deduct -- is gone, or will be in six years’ time.
“It’s a new formula, which is what we advocated for, because at the end of it all, that will be a reasonable approach to state funding,” Gainer said. “But if people don’t look at it in its entirety, it’s like trying to mix apples and oranges.”
The Fair School Funding Plan calculates state aid with a formula of 60% property taxes and 40% household income, factoring in a community’s economic status and a district’s number of higher-need students.
“I’m not happy to see that the state EdChoice voucher amounts have increased (from $6,000 to $7,500 per year) and they’re now embedded in a line item of the state budget for funding public schools,” Gainer told the board.
At the same time, that EdChoice voucher money will now be fully funded by the state, rather than being deducted directly from the school districts.
“It’s a great win, but it’s short-lived, because we’re still not going to have enough money,” Posch said July 6. “I know there are members of the community who are rejoicing, saying our financial woes have been completely solved.”
Some of those community members have already asked the school board to take another look at the proceeds from the reduced 4.8-mill levy that narrowly passed last November, after an earlier, larger 7.9-mill proposal lost by about 600 votes in the spring of 2020.
“The school board stated previously that if vouchers were paid directly by the state and if funds lost were returned to the district, we could conceivably reconsider our current levy needs,” Posch said in the July9 press release.
Posch and the board explained that with the new formula, “the voucher payment deduction from local school districts has been eliminated, but so has the entire amount of district state funding that was previously used to cover the voucher deduction.
“Instead, the state has created a new funding system that will be phased in over six years (assuming future legislatures agree to do so over two additional state biennial budgets), which does not provide significant increases to our district over the next two years,” the district statementadded.
With that in mind, CH-UH is now accepting applications until Aug. 6 for community stakeholders to join its Lay Finance Committee, to review state audit reports and “work as a liaison to the community, assisting in identifying finance and budget information to be communicated to our residents.” Applications are available on the district website.
As for the new state funding formula, CH-UH school board member Dan Heintz noted that there’s “not a lot of detail about how it will be carried out.”
Heintz added that under the new state budgeting, up to 25% of public tax dollars will be used to educate private school students, who make up 10% of Ohio’s school age children.
Statewide, that works out to 90% of Ohio students who are enrolled in public schools getting 75% of taxpayer funds from the state.
Heintz pointed out back in April what hit the CH-UH school district so hard under the previous state formula was that the local percentages are substantially higher, with nearly 5,000students attending the public schools, and another 1,700 enrolled in private schools on vouchers.
School Board Vice President Malia Lewis described the state phase-in over six years as “logarithmic, where a significant chunk of money doesn’t happen until the fifth and sixth years. And at this point, there’s no guarantee that they will continue to phase it in.”
The July 9 district statement maintained guarded optimism for the Fair School Funding Plan.
“Although there are wrinkles to be smoothed, this is an encouraging development for public schools like ours,” Posch said. “This does not result in a financial windfall for districts and is not guaranteed. The short term financial impact for CH-UH is minimal, but the long term fiscal impact is promising.”
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