Faulty Math?

Gov. Kasich’s quirky education-funding formula lists Indian Hill beside the state’s have-nots

click to enlarge Glitches aside, Kasich’s plan would help many low-income districts like Cincinnati Public Schools.
Glitches aside, Kasich’s plan would help many low-income districts like Cincinnati Public Schools.

O

ne of the state’s wealthiest school districts is among those on the list to receive an increase in state aid under a new plan submitted by Gov. John Kasich. 

The education funding change-up, which was delivered in Kasich’s two-year budget proposal last week, has met criticism from multiple sides. Educators question the plan’s math while some conservative lawmakers have taken particular issue with what they’re calling a Robin Hood scheme bent on redistributing income.

Kasich’s stated aim with his new proposal is to funnel more state dollars toward Ohio’s poorest schools in an effort to even out the state’s huge disparities in educational funding. Several high-income districts, such as Mason and Lakota, will lose funds from the state as more funding heads to low-income districts like Cincinnati Public Schools.

But listed among the big winners in the end result is Indian Hill, where residents bring in more than $200,000 a year and median home values top $900,000. The $234,759 increase is not a huge amount of money for the small district, which served 1,944 students in 2012. But proportionally, the increase is tied for the highest increase in Hamilton County.

Kasich’s office has acknowledged there may need to be some adjustments to the formula, but he has defended it from critics. Kasich has called on wealthier districts to “step up” and help “those who cannot help themselves.”

“It is a conservative point of view in that every kid should be in a position to thrive,” Kasich told reporters at a news conference at a charter school in Cleveland last week. “I don’t see it as redistribution. I see it as a formula for driving resources to kids.”

Public schools generally get their funding from local property and other taxes along with money from the state and federal governments. In the past, the Ohio Supreme Court has ruled the state’s reliance on such taxes unconstitutional because it creates funding disparities between rich and poor districts.

In 1997, the state’s highest court ruled in DeRolph v. State that Ohio leaned too heavily on local property taxes in its funding formulas, meaning that the quality of education an Ohio resident received depended too much on where he or she lived. Kasich’s plan is the latest of various efforts that have been made to reform the state’s education system.

Recent funding cuts have exacerbated inequalities. State lawmakers in 2011 made deep cuts to the state’s education budget. Kasich has added $700 million in funding for public schools to his budget proposal for the next two years, though that increase itself won’t make up for the billions cut in previous years.

Though the pie is still smaller than in the past, Kasich’s plan would change the way it is divided.

By assessing the capacity of taxpayers in each district to pay for education themselves, Kasich’s funding proposal would change the formula by which state money is allocated with the intent of leveling the playing field for schools in areas where property values and incomes are low. Among the changes, Kasich’s plan would take into greater account median household income, which was not weighted as heavily in the old formula.

“What you essentially have is a formula that can see poverty better,” said Kasich spokesman Scott Milburn.

In the big picture, the plan seems to accomplish that, with the state’s major urban school districts including Cleveland, Columbus, Cincinnati and others with large numbers of low-income students seeing an increase. But in other situations a wealthy district like Indian Hill’s 21-percent increase in funding over the current levels it gets from the state stand out.

By comparison, Cincinnati Public Schools will see a 10 percent increase in state aid under the plan, though considerably more money. Overall, 12 school districts in the county would see an increase in state funds.

CPS looks more like the kind of district Kasich’s plan is designed to help. Cincinnati’s median household income is just $33,000 and its median home value is just over $100,000.

Wealthy districts like Lakota, in West Chester, and Mariemont School District will see big cuts in their state aid. Mariemont will lose 22 percent, for example, or nearly $850,000. Lakota, a much larger district, will lose 12 percent, or nearly $6 million.

“Lakota is the biggest loser under this proposal, dollar wise,” Lakota Schools Treasurer Jenni Logan said last week in reaction to the proposal. Logan emphasized it was still early in the budget approval process and that not everything about the new plan is fully understood. “We are very hopeful that revisions will be made throughout the budget process,” she said.

The disparity is due to complex elements of the current and proposed formulas used to determine state aid, says Howard Fleeter, an economic consultant with the Education Tax Policy Institute in Columbus. Under old rules, a school couldn’t get more than a 6 percent increase in state aid in a given year, a cap that has applied to Indian Hill in past budgets. Under the new rules, that cap has been increased to 10 percent a year, accounting for Indian Hill’s two-year increase. If Indian Hill had not been on the cap previously, their aid would go down under Kasich’s new plan, not up. Other districts may not have fallen under the cap previously.

State aid accounts for just a tiny percentage of Indian Hill’s budget, compared to the double-digit percentages state aid makes up in many large urban school districts’ spending.

Other quirks have made for similarly counter-intuitive results elsewhere in the state. Walnut Township School District, which is southeast of Columbus, will lose 9 percent of its funds from the state despite having half the median household income of places like New Albany, a city northeast of Columbus whose district will gain 21 percent more funds under Kasich’s plan.

David Varda, the executive director of Ohio Association of School Business Officials, told the Columbus Dispatch that he’d like to see more information about Kasich’s proposal but that “it doesn’t seem that it matches up totally with what he said. It’s not what I would have thought based on his speech.”

Kasich’s ambitious $72 billion budget comes as the governor sizes up a run for the White House. There are big, eye-catching proposals across the political gamut, including deep income tax cuts designed to appeal to conservatives and funding boosts to education and other generally liberal priorities. These moves continue recent efforts by Kasich to position himself as “compassionate conservative” who governs with an eye toward practical concerns instead of partisan politics.

While the moves may prime Kasich for 2016, they probably won’t make the budget process smoother.

Next, the Republican-dominated Ohio General Assembly will have to approve the budget in a process that is expected to go until June. There, the governor may have to fight his fellow Republicans over provisions with which the increasingly conservative body has taken issue.

Conservative lawmakers have already begun beating up Kasich’s proposals, including his education funding ideas.

“It just strikes me that the Robin-Hood effect may yet be continuing in this process, where we’re forcing those districts that already have high property taxes to send a good deal of their wealth down to the state, which is then redistributed somewhere else,” said State Rep. Mike Dovilla of Berea in an Ohio House Finance Committee meeting Feb 3. ©

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