Coalition of 138 Ohio School Districts Protests State-Aid Reforms

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Cincinnati--Representatives of 138 of Ohio's 615 school districts converged on the state capitol in Columbus last week to protest school-finance reforms they say have crippled their school budgets.

In an attempt to attract attention in anticipation of January's legislative session, district officials released a four-point platform calling on legislators to again revise state-aid formulas for public schools.

The new legislation is needed primarily, they argued, to reverse the effects of tax and spending provisions of an omnibus measure enacted by legislators in 1983.

The "Coalition of 138 Ohio School Districts," as the group calls itself, represents "the property-poor, the property-rich, really all kinds of districts," said R. Dean Horton, superintendent of the Mt. Healthy City Schools.

"Our concern is the basic lack of growth in the state's methods of funding education. We haven't even approached the amount of the inflationary rate over time."

Inflation-Driven Growth

In addition to calling for an inflation factor in state-aid formulas, the platform that was adopted by the coalition at its rally last Thursday advocates returning the rate of tangible-property taxation--tax applied only to business equipment and inventory--to 35 percent of its true value.

The platform further recommends the elimination or adjustment of a 1979 property-tax rollback provision so that revenue from real estate would be allowed to grow without tax rates being reduced.

In addition, it urges the state to give school districts equal access to certain categorical funding programs that now require them to have certain numbers of pupils to qualify.

The platform is not designed to undo reforms that produced funding increases in other districts, according to Monty Lobb, administrative assistant of the Princeton City Schools, a district with a generous industrial tax base.

"They needed that. Our point is we're happy these other schools have received money, but we don't believe you have to take away from one to give to another."

Omnibus Bill

The primary target of the coalition's protest was an omnibus budget bill approved by the Ohio General Assembly in 1983 that now governs local property-tax collections and state spending appropriations.

That bill--designed to restore stability to the state's ailing general fund and to spur economic recovery--mandated a 90-percent income-tax increase and granted relief on tangible property taxes to business and industry.

Since 1979, a rollback provision has governed real-estate taxes in Ohio, so that no school district can collect more in taxes than it did the year before except on new growth. Taxation of tangible business property was not subject to the rollback. However, the 1983 law limited taxation of such property.

The budget bill also raised theappropriation for education in 1984-85 to $4.8 billion, about $1.08 billion more than the appropriation from the previous biennium.

Nonetheless, the combination of reforms and allocation of aid to local schools did not favor all districts. Coalition members said they saw their state-aid allocation, their anticipated collections on tangible property taxes, or both, go down.

Mr. Horton of the Mt. Healthy City Schools said state aid to his school district increased from about $6.4 million in 1981 to $7.2 million this year, for a three-year growth rate of about 11 percent. "But the cumulative inflation rate over that period of time was a little better than 21 percent," he noted.

At the same time, increases in local property taxes as a result of inflating property values are forbid-den under the rollback provision. The result has been that when increases in state aid do not keep up with inflation, local school districts have had to ask their voters for increases in the property-tax rate.

James Boothe, assistant superintendent of the Reading Community Schools, said his district received $565,000 in state aid in 1981. "In 1985, we're going to receive $431,000," he said. Other districts face similar situations, members of the coalition said.

'We Have a Dilemma'

Mr. Lobb of the Princeton City Schools said the need for new property taxes is difficult to explain to voters at a time when personal-income taxes and overall funding for education have both increased dramatically.

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Ohio Districts Protest Aid Reforms

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"Here in Princeton, we have a 5-mill levy on the ballot in February," he said. "What are our voters going to say? We'll go to them and say, 'We need money,' and they'll say, 'What? We just gave you a 90-percent increase in income taxes and you also have the state lottery.' So we have a dilemma."

William Phillis, assistant superintendent of finance for the Ohio Department of Education, acknowledged that finding a solution to help the 138 districts will be difficult because of variations in their financial situations. "We understand the problems these districts face and we want to work with them in resolving their problems," he said. "We almost have to look at those districts individually and try to come up with a solution. Quite frankly, in many cases, the solution is at home with a local property-tax increase and that, of course, is repugnant to local taxpayers."

The Ohio Board of Education is expected to make its recommendations to Gov. Richard F. Celeste for the 1986-87 biennium in December. Mr. Phillis said he expected that report will recommend "essentially the same funding mechanism, increasing the level of funding in the foundation program."

On the issue of a guaranteed growth rate from the state, he said, "If the state goes in that direction, there would be less dollars available to the foundation program. The public-policy question is, if the state has additional dollars, does it put those dollars into districts that have an inordinately high spending per pupil, and concentrate wealth in those districts, or does that state put money into those districts that do not have the wealth to bring the expenditure up. There isn't any one answer for that."

"We're obviously taking into consideration the problems this group has pointed out and so at this point the whole thing is fluid," Mr. Phillis added. "We have an obligation to be responsible to the needs of all the districts, and so we're far from finalizing that report."

Two bills now pending in the Ohio House of Representatives call for the state to increase aid to local schools by as much as 21 percent--the cumulative inflation rate--in districts where revenues have grown by less than that percentage since 1981.

The bills would also erase the tax breaks in tangible-property-tax collections and, instead, grant relief to businesses on corporate franchise taxes and income taxes--state taxes that have little direct effect on school budgets.

Vol. 04, Issue 07

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