Thursday, July 2, 2015

John Kasich's Trouble With Promises

Gov. John Kasich is soon to announce his run for President. Good for him. Not everyone can do that. But before anyone goes too crazy over this, I want to explain a little bit about how Kasich has displayed little regard for long-held promises made to Ohio's school children.

As a backdrop, remember that four times the Ohio Supreme Court ruled the state's school funding formula unconstitutional because it relied too much on local property taxes to fund education. It was up to the state to develop a better formula that involved more state dollars.

Whether this matters is up to you. But I wanted to make a record of the many promises that have been kept by Ohio Republicans and Democrats during the last five decades that Kasich has simply undone with seemingly little thought or concern. Then blamed public schools for failing to prepare for.

I'll start with the most recent.

Tangible Personal Property Tax Reimbursement

In 2005, the Republican legislature and Governor, Bob Taft, passed House Bill 66 -- the now infamous budget that started Ohio's slow elimination of the state income tax. I'm not getting into the merits of that policy here, but in that bill, there was also the elimination of the so-called Tangible Personal Property (TPP) Tax. 

For you and me, the TPP was a state-created, locally raised tax on business that allowed local communities and schools to collect tax revenue on inventories held by businesses in their communities. It was especially hard on businesses that had lots of equipment, like car manufacturers. There was a widespread belief that the TPP was an impediment to business, and I am among them. It was a tax that tilted heavily against the very businesses our state needed to grow -- manufacturing. 

The trouble was, the tax raised about $2.3 billion for schools. So what could districts do to replace this lost revenue?

Obviously, public education advocates were concerned about this. And the state made a deal with the schools: Go along with the TPP elimination, and we'll replace it for you with a chunk from the new, broad-based Commercial Activity Tax on business until we find a suitable replacement for your lost, locally raised revenue. They put in a five-year window to come up with a replacement, but they never did. So the reimbursement payments (as this TPP replacement thing came to be called) remained in subsequent state budgets, unchanged.

Until Gov. John Kasich came into office.

In his first budget, he whacked the TPP reimbursements substantially as part of his record-breaking $1.8 billion cut to schools. And he didn't replace it with anything, nor did he ever acknowledge that that was ever a part of any deal, even though it was.

He essentially told districts that it was always meant to go away, and it's districts' fault for not preparing for it.

Two nights ago, Kasich completed his full elimination of the TPP reimbursement by line-item veto, eliminating a budget item that in 2011 was about $920 million -- about as much as the state spends on charter schools today, by the way.

Yes, state aid has increased since 2011, but it has yet to exceed the inflation-adjusted amount that was spent in the 2010-2011 budget -- the one that was developed during the Great Recession.

And don't forget that TPP payments were always on top of state aid payments, not included as part of the state aid calculation.

And whenever the governor and legislative leaders talk about "record" increases in school funding, don't forget it follows record cuts in school funding. The current leadership's baseline is the cut year when it really should be the years prior to the cut year. 

The Evidence Based Model
In 2009, Gov. Ted Strickland developed the Evidence-Based Model, with some help from yours truly. The plan, which replaced the so-called "Building Blocks" formula, called for a 10-year implementation of the model that was slated to infuse an additional $3.2 billion in state money for education. Over three years, the formula was examined, implemented and improved by a bipartisan advisory council.

It even received a national award from the Education Commission of the States for being the country's most "bold, courageous and non-partisan"education reform of the year, earning praise from Race to the Top reviewers as "trend-setting."

Kasich's first move was to blow it up, throwing districts for a loop and essentially ignoring the good, hard work put into it over three years by earnest people on both sides of the aisle. He took an extra year to develop his own funding formula that was eventually so panned that even his own political party ended up dumping it in favor of a kind of altered Building Blocks formula -- the same quasi-formula we have today.

Property Tax Rollback
In the 1970s, when Ohio passed its income tax, part of the deal to get that passed was the state said it would use some of the money to essentially pick up 12.5% of the property tax that was being paid for schools and other local community agencies.

In 2013, Kasich eliminated the rollback for future new money levies that are passed, essentially raising property taxes on all future school levies by 14.3% (a $12.50 increase on every $100 is 14.3% of the $87.50 that taxpayers would have paid). 

In all these instances, Kasich simply undid sometimes decades-long agreements between the state and public schools that kept their finances in order. And it's not like he is replacing the money. He's simply saying, "Deal with it whiners."

But I cannot abide Kasich claiming that the TPP is restoring his formula to its pure form. First of all, the state's funding formula isn't his -- it's the legislature's because they dumped his. Second of all, the TPP reimbursement payments were never a part of any formula. They were supplemental payments to make up for lost local revenue that the state promised to would replace some day.

Until John Kasich came along and reneged on that promise. 

When Strickland took office in 2007, he kept the tax package from his predecessor -- a tax package I know he didn't like, but he recognized that the people of Ohio deserved some policy stability beyond political parties. Yes, it was also for political reasons, but it did bring stability.

Kasich, on the other hand, just didn't care that people gave up their lives for three years developing a funding formula, nor did he care that districts had been promised things by his Republican predecessors, nor did he care that he wasn't replacing any of this revenue he was cutting.

He just did it, then blamed districts for not preparing for the state to go back on its word after sometimes decades of keeping it.

I don't know if the havoc Kasich has wrought on Ohio education finance will ever be repaired. Will districts ever trust what the state tells them again? Will the state ever make any more promises that they can possibly be held to beyond the elected lives of these officials?

Part of the deal when you're an elected leader is to respect, understand and work with the precedents that came before you. Yes, even ones you don't like. The people have to deal with your decisions far beyond your stay in office, just as they have had to deal with decisions made long before you ever took office. It is a solemn and serious charge.

The way Gov. John Kasich has treated past promises makes it seem he thinks the state's history began and will end with him. 

That isn't how leaders think. 

That, my friends, is how my 6-year-old thinks.