Monday, September 12, 2005

Back to School Monday

OK class, settle down. I'm Mr. Pho, your teacher for Intro to Ohio School Funding.

We are offering this class because of the difficulty posting education news at House of Pho. Whenever something comes up, the resultant post seems incomplete unless it restates large swatches of basic material. This class will be about clarifying the basic school funding concepts, then trying to come up with some unifying themes. We will meet here every Monday, some days earlier than others.

This class will give you a comprehensive survey of all the major topics in school funding; DeRolph, No Child Left Behind, House Bill 920, Reform Proposals and more.

Yes Mr. JeffisAngry, we will be covering privatization, but we need to understand the context first.

A word about class materials. Each lesson will have footnotes at the bottom discussing specific sources. Links will be embeded where they exist. In addition, we will be working on an index of the lessons for folks coming in late.

Lesson One: Ohio's School Funding Formula.

You can't understand much without understanding the state funding formula. The formula has existed in one form or another for decades. The General Assembly changed it fairly profoundly in the last budget cycle, so we will start with the formula as it existed prior to 2005. We will discuss the changes that are about to go into effect in a couple of weeks.

The funding formula, set by statute, determines how much state aid each school district gets. In other words, the state budget doesn't contain a line item for money to Akron Public Schools, another for Clevland, etc. Instead, the budget contains whatever tweaks are proposed to the state formula.

The formula is per-pupil aid. Other chunks of money may go flying around, but the real meat of the thing is the per-pupil formula.

Finally, by way of introduction, the formula is aid for operating budgets. The capital funds are a whole other thing.

So, the formula starts with a base amount -- the amount of aid for each student attending school in a district. In theory this reflects the legislature's determination of how much it costs to educate one student for a year. In 2004, the base amount was $5058 per pupil.

Step Two: The previous formula had a Cost of Doing Business Factor that reflected the reality that it costs more to operate in some counties than others. The foundation amount is multiplied by the CODBF.

Step Three: For each district, determine the Average Daily Membership, then multiply the Foundation Amount, as adjusted by the Cost of Doing Business Factor. This is the basic aid for that district.

Step Four: The State then subtracts from the basic aid amount the local share charge-off, reflecting the property tax base of the district. This is derived by finding the total recognized value of taxable property in the district and assuming a 23 mill levy.

The budget contains some add-ons as well. Chief among these is Disadvantaged Pupil Impact Aid, which is based on the percentage of kids in the district who receive Temporary Assistance for Needy Families (TANF). This will become important in a week or two.

Other add-ons include vocational education aid and aid for educating students with disabilities. Some gap-filler programs called "Equity Aid" and "Parity Aid" have been around for a few years to help the poorest school districts. None of these is a substantial part of a school district's budget.

In summary:

State Aid = Foundation Amount x CODBF x ADM - (Tax Base x 23 mills)

Next Week: How local school districts fund themselves.


The statutes setting down the formula are found at O.R.C. Ch. 3317, esp. § 3317.012.

One good source for a layperson's explication of the funding formula is the study guide published by Ohio Fair Schools Campaign.

A second source is the Report of the Governor's Blue Ribbon Task Force on Financing Student Success.