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Published in Print: January 26, 2000, as Ohio Awaits Verdict On Revamped Finance Formula

Ohio Awaits Verdict On Revamped Finance Formula

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Ohio lawmakers are bracing for a state supreme court decision that will tell them whether they can carry on with their current method of paying for schools, keep only parts of the system, or scrap the setup altogether.

They found themselves in much the same position three years ago, before the court declared that the state's property-tax-reliant system failed to meet the "thorough and efficient" standard for financing schools laid out in the Ohio Constitution. This time, it is the state's remedy—its changes in response to the 1997 ruling—that is at issue. Observers say a decision could come as early as next month.

Because the initial decision that found the system to be unconstitutional detailed several areas within the school funding mechanism that needed to be addressed, analysts say a simple thumbs- up or thumbs-down on the constitutionality of the remedy is unlikely.

"I would almost be as surprised if they found it fully acceptable as if they threw it out entirely," said John Augenblick of Augenblick and Myers, a Denver-based school-finance-consulting firm. "The system that's in place right now is pretty complicated. The court will have to speak to a lot of issues."

Flaws Acknowledged

The state's Republican lawmakers have largely acknowledged all along that the plan adopted after the 1997 ruling was not perfect, but pledged to work out the kinks in future years. They say that after a lot of hard-won compromises, the legislature approved a plan with higher per-pupil spending levels that will be fully phased in next year.

In addition, they say they've pumped billions of new state dollars into school funding and repair. And, citing the current $23 billion school construction proposal offered by Gov. Bob Taft, a Republican, they say they plan to continue doing so.

If the Ohio Supreme Court tosses out the entire remedy as unconstitutional, "I'm not sure what and if the General Assembly would be able to come up with in the way of another new funding system," said Sen. Robert R. Cupp, a Republican who chaired a working group that crafted the frameworks for the new system. "We've already stretched to the limit the ability of the legislature to make a compromise."

The fact that this is an election year—a time when lawmakers want to spend a maximum amount of time in their home districts—would also make it difficult for legislators to tackle wholesale changes to the finance system in this session, Mr. Cupp added.

If the high court does find that the state has failed to meet some or all of the requirements for an acceptable system outlined in the earlier ruling, the best the legislature can hope for is that the justices are more specific about what is necessary to create a constitutional funding method, said Mr. Augenblick, who worked with Ohio lawmakers in creating the current finance system.

"The question is, with the millions of dollars that have gone in, and with the rational procedures in place, is that close?" he said. "If not, I hope they give some guidelines as to what constitutes enough change. Because, otherwise, it's just mind reading."

Backsliding Feared

The plaintiffs in the case known as DeRolph v. State of Ohio, meanwhile, maintain that the state has failed to meet the court's requirements for an acceptable remedy on all fronts.

The state may be putting more money into school facilities, but lawmakers have yet to approve a plan that would correct the problem over the long term, said William L. Phillis, the executive director of the Ohio Coalition for Equity and Adequacy in School Funding, which filed the original lawsuit in 1991. Likewise, Mr. Phillis added, the state may have raised its per-pupil spending, but it hasn't altered its original method of paying for schools by "budget residual," or the money that's left over in the budget when everything else is paid for.

While Mr. Phillis concedes that the "bottom has moved up some" in overall school funding levels, he said a court ruling in the state's favor could change the momentum of the current, higher spending levels.

In the event of such a decision, "the state will continue to provide some money for facilities, then regress back to its former mode of operation," he predicted. "That is, the districts that have the most political clout will fare the best."

Vol. 19, Issue 20, Page 14

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