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Education Funding

Ohio Voters Reject Sales-Tax Hike for Schools

By Kerry A. White — May 13, 1998 4 min read

It’s back to the finance drawing board in Ohio.

More than a year after the state’s highest court ordered lawmakers to revamp Ohio’s system of paying for schools, voters overwhelmingly rejected a major part of that overhaul last week: a proposed 1-cent sales-tax increase for schools and property-tax relief for homeowners.

State Issue 2, which promised to raise $1.1 billion a year in funding to be divided evenly between schools and homeowners, met a crushing defeat, 80 percent to 20 percent, on the statewide primary-election ballot May 5. Some 28 percent of the electorate turned out for the primary, compared with 33 percent in 1994, according to the secretary of state’s office.

The measure was intended to finance education reforms and a new school funding formula the legislature approved to meet the Ohio Supreme Court’s mandate for a new system that will narrow the funding gap between the state’s property-rich and property-poor districts.

The defeat stunned Issue 2 proponents, including leaders of the GOP-controlled legislature and Gov. George V. Voinovich, a popular Republican who had been crisscrossing the state in recent weeks to drum up support for the plan. The measure asked voters to increase the state sales tax from 5 cents to 6 cents per dollar, effective July 1.

“From my perspective, there is some good news this evening, and some bad news,” Gov. Voinovich said in an Issue 2 concession speech. The “good news,” he said, is that Ohio citizens were able to weigh in on the tax increase. “The bad news is that the next General Assembly and the next governor of Ohio are going to have to figure out how to fund House Bill 650,” the school finance bill lawmakers passed this session.

“Issue 2 would have taken care of that, but another solution must be found,” he said.

Ironically, Mr. Voinovich, who is constitutionally barred from seeking a third term as governor, sailed through last week’s primary to win his party’s nomination for a seat in the U.S. Senate.

In March 1997, the state supreme court ruled that the finance system violated the state constitution’s “thorough and efficient” standard for Ohio public schools. (“Justices Reject Ohio System of School Finance,” April 2, 1997.)

The court gave the legislature one year to devise a remedy in the finance lawsuit brought by 553 of the state’s 661 school districts. Lawmakers have since asked for an extension, but the court has not ruled on their request.

Also defeated last week was State Issue 1, which would have allowed Ohio to issue low-interest bonds to raise money for local school construction and repairs. Issue 1, which was far less controversial than Issue 2, went down by 61 percent to 39 percent.

Odd Alliances

Issue 2 made for some unlikely political bedfellows, dividing education camps and aligning some school leaders and labor organizations for the first time with conservative, anti-tax groups.

The Ohio Federation of Teachers, the state’s second-largest teachers’ union and an affiliate of the American Federation of Teachers, was among the program’s loudest detractors, along with the Ohio Association of School Boards and the Ohio Association of School Administrators.

“Issue 2 was a flawed plan,” OFT President Ronald Marec said in an interview. “It didn’t solve the funding problems in Ohio.”

John M. Brandt, the executive director of the school boards’ association, added that the voters “rejected an incomplete school funding solution.”

“The Ohio Supreme Court ordered a complete overhaul of the funding system,” he said. “Taxpayers and parents want a system that works, not a confusing mixture of tax increases and tax relief.”

The 800,000-member Ohio AFL-CIO also provided support and money for the anti-Issue 2 campaign, saying that the tax increase would unfairly burden the working class and did not go far enough to support necessary school reforms.

But the Ohio Education Association, the state affiliate of the National Education Association and Ohio’s largest teachers’ union, along with state and business leaders, voiced strong support for the plan and expressed disappointment at its rejection.

“We believe that Issue 2 would have been a step forward for public education,” OEA President Michael Billirakis said in a May 5 statement. “However, the events of the past year have focused the public’s attention on the wide disparity in educational opportunities of Ohio’s 1.8 million schoolchildren. Citizens ... now know that there is a school funding crisis. The only debate is over how we will solve the problem.”

Legislators are now looking to the high court to decide whether their new funding plan is constitutional without the additional money from Issue 2.

William L. Phillis, the executive director of the Ohio Coalition for Equity and Adequacy in School Funding, the group behind the 1991 lawsuit that prompted the court’s mandate, argued that the legislature has not come close to meeting the court’s demands.

“The state’s plan did not sufficiently deal with the state’s school funding problems,” he said. “I’m glad it was rejected, but we still don’t have a thorough and efficient system. We need to keep the conversation going and move forward towards a solution.”

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A version of this article appeared in the May 13, 1998 edition of Education Week as Ohio Voters Reject Sales-Tax Hike for Schools

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