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Breaking Down Ohio’s Confusing School Funding System

Michael Nutter

April 4, 2018

The State of Ohio doles out educational funding according to an incredibly complex formula that causes headaches for Superintendents and District Treasurers.

We all want to provide a top-notch education to each and every student, but our public schools are often asked to do far too much with far too little in the way of state funding.

From the outside, it can be difficult to understand how underfunded Ohio schools are, primarily because the mechanics of educational funding are so complicated. Generally speaking, public school districts receive roughly 10% of their funding from the federal government, 45% from their state government, and 45% from local tax revenues. Federal, state, and local authorities each apportion their resources using complex formulas, but state allotments in particular are notoriously confusing.

In Ohio, for instance, the state government’s latest budget increased public education funding by 1% for both this and next school year. That said, while 235 Ohio districts will see bumps in their funding over the budget’s two-year lifespan, 218 districts will essentially have their funding frozen, and another 156 districts will actually see their funding reduced by at least $10,000. This unevenness is largely attributable to Ohio’s school funding formula, which is so complex that it inevitably leads to both over- and under-funded districts every year.

A Primer on Ohio’s Funding Formula

As is the case all over the country, schools in Ohio are given a baseline per-pupil funding package — officially referred to as “Opportunity Grants” — each school year. For the current year, the funding baseline settled at $6,010 per enrolled pupil.

Like the federal government, the State of Ohio also provides schools with additional funding for students who are enrolled in programs for special education, career technical education, limited English proficiency, and more. That said, these special allowances are subject to the same caps and reductions as standard Opportunity Grants.

Foremost among these reductions is the State Share Index (SSI). According to the Ohio Department of Education, “[The] State Share Index of each school district reflects the wealth of the school district as measured by property valuation and the income of the residents of the district calculated for the purposes of the distribution of the state funds through the foundation formula.”

In short, the SSI is the factor by which Ohio reduces the funding each district receives to push more expenses onto local tax revenues. The SSI is required to be between 0.05 and 0.90 — in other words, the richest districts receive only 5% of the $6,010 baseline from the state, and the poorest districts receive up to 90% of the baseline. It’s designed to ensure that every district receives roughly the same amount of funding once both the state and local apportionments are taken into account. In practice, however, this rarely ends up being the case.

In order to establish a district’s SSI, Ohio performs a series of complex calculations on the district’s collective tax value and residential income, assuming that wealthier districts will compensate for their lack of state funding with bigger school levies.

To take one example, the Columbus City School District was assigned an SSI of 0.59 for the 2017-2018 school year. So, instead of receiving $6,010 per enrolled pupil from the state, Columbus was only allowed to receive 59% of $6,010, or $3,545.90. What’s more, this figure was reduced even further by Ohio’s “Funding Cap.” The math behind this limitation is even more complicated than anything we’ve covered so far, but suffice it to say that Columbus’ Funding Cap Ratio came out to roughly 0.70 this year. Once this was factored in, Columbus’ per-pupil funding dropped all the way to $2,482.13, a mere 41.3% of the baseline level.

Making the Most of Scarce Resources

The salient point here is simple: big picture, statewide numbers must always be taken with a grain of salt. Even if Ohio’s next budget includes big increases in educational funding, any district with a low SSI or Funding Cap Ratio will see marginal boosts to their funding at best.

This being the case, district Superintendents and Treasures must do everything in their power to ensure that they receive every last penny of funding to which they’re legally entitled. Unfortunately, putting together all the different datasets that influence how much funding a district can get is a remarkably complex task, so it’s unsurprising that nine out of ten education management information system (EMIS) stakeholders make mistakes on a regular basis.

A tool like Vinson’s CheckPoint EMIS platform enables districts to check and verify their critical data throughout the school year, making it easy to ensure that everything’s in order when it comes time to submit those record sets to the Department of Education. In light of the difficulties presented by Ohio’s funding mechanisms, utilizing a tool like CheckPoint is the best way for educators to accomplish their ultimate objective: getting the resources they need to make student success possible.

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