School Funding Reset.

"And you may ask yourself, 'Well, how did I get here?"

Comments, both on- and offline, make it clear that my attempt at a neutral tone about the amendment isn’t fooling anyone. No, I’m not a fan. It has some good ideas but takes them too far. I’ll continue to unpack the amendment in the manner I’ve been doing. But first, a review of why this has come to pass.

I started (and didn’t finish) an ambitious project retracing the history of the school funding movement from the beginnings of the DeRolph case to present day. You can read what I wrote as background for part of what I’m going to say. Also, if you’ve seen the Next Step for Akron presentation, you’ve heard all this before.

I’m not going to restate the school funding formula as it stood at the time of DeRolph. You can read my previous post on that if need be. Suffice it to say school funding is done on a per-pupil basis starting with something called the foundation amount.

The DeRolph Court wrote a long, broad-based opinion that purposely avoided holding that “Thing X is wrong with school funding, fix it and you’re done.” Nonetheless, the Court identified three aspects of the school funding system it found particularly troubling:

• Residual Funding – The fact that the state bases funding on how much money it wants to spend rather than what it needs to spend to actually create a thorough and efficient system.
  
• Phantom Revenue – A trick of the funding system that makes a district’s local revenues remain flat and its state share go down as property values increase. More here.
  
• Overreliance on Property Taxes – Because the state makes local districts pay too high a share, differences in property wealth are reflected in differences in funding for schools.
  

The Court’s ruling and subsequent rulings admonished the State to fix these three problems. Instead, the General Assembly increased the foundation amount, started the parity aid program, tried a pseudo-costing-out methodology that was quickly changed when it started spitting out numbers the GA didn’t like.

The Supreme Court issued three more decisions, none giving the state a clean bill. By the time of DeRolph IV, Court personnel had lurched to the right and the original dissent by then-Justice Cook on justiciability grounds was looking good. If DeRolph I had been decided by the DeRolph IV court, I believe it would have gone the other way, at least on justiciability.

As it was, a conservative court was unwilling to overrule itself in the course of a single case. Instead, DeRolph IV declared again that the system was unconstitutional, admonished the state to fix it and relinquished jurisdiction over the case. The Court said it would no longer hear the case. To mix Biblical metaphors, they washed their hands, saying, “Go, and sin no more.”

Since then we’ve had two budget bills pass. And the result has been, well, same as it ever was.

Going into the first budget cycle the statute was written to guarantee a 2.8% increase in the foundation amount yearly. In the 04/05 budget (passed in 2003), the GA dropped that increase to 2.2%. Mind you, 2.8% didn’t cover cost of living increases, much less the greater increases in the cost of running a school system (mostly due to increases in the cost of health insurance and utilities.)

The statute also had built in increases in the Cost of Doing Business Factor. Instead the GA cut the factor in half. They also monkeyed with other parts of the formula, gave parity aid to charter schools and generally did mischief.

In the 06/07 budget they did more of the same. You can read my summary of that one.

What really irks me about that budget cycle is the after-effect of the tax changes. We were told by people in the administration and the legislature not to worry, that the tax reform would grow business in Ohio, more than making up for the lost revenues, in particular the losses locally due to the elimination of tangible business property taxes.

Twice since then the legislature has had the happy task of deciding what to do with increased tax revenue. Twice the legislature chose to apply that money to further rounds of tax cuts – cuts that didn’t even make sense from a growth perspective. The fact that we didn’t believe them at the time doesn’t keep the proof that they lied from stinging.

As you read the proposed amendment, you will sense a fundamental lack of trust in the legislature. That lack of trust in real, and has a strong basis in history. Some folks of a different political stripe my comment about this with unions or that with overhead. I agree with a lot of that. But I also understand why nothing is on the table – no one trusts the legislature any more.

So that’s why I still believe in doing what I do. That’s why I was willing to give the amendment process a chance. And that’s why, to tip my hand a bit, I’m willing to use my tiny soapbox here to add a few drops to what I hope to be an overwhelming swell of opinion that sweeps the parties back to the table to fix this thing and make it a viable alternative.

So, that’s how we got where we are. Now, back to parsing the amendment, in which we ask ourselves:

“MY GOD! WHAT HAVE I DONE?!”