What Coulda Been (And Still Could Be) ...

This school year is the 10th since I was the Chairman of the Primary and Secondary Education Subcommittee on the House Finance and Appropriations Committee. It was during that committee process that we developed (among other national award-winning education reforms) the so-called Evidence Based Model of school funding -- Ohio's most serious attempt to address the Ohio Supreme Court's four rulings determining that Ohio's education funding formula was inadequate at calculating the cost of educating Ohio's 1.7 million students and relied too much on local property taxes to fund.

Among the promises made in that package was a 10-year, phased-in funding plan. We picked 10 years because 2009 was the height of the Great Recession, which limited the additional revenue we could commit to the plan initially. But I required that the state publish the 10-year full funding version so that the public could at least hold future legislators accountable to fully fund the thing.

Here is a look at the research that backed each of the funding elements in the EBM. As you can see, there was evidence behind the model -- a far cry from today's "formula", which isn't really a formula in the classic sense.

Even with the limited additional revenue, EBM was beginning to work. The second year of that plan was the only time in Ohio history that more state than local revenue paid for Ohio's public education.

After the 2010 election, though, Gov. John Kasich killed the EBM, replacing it with a plan that initially cut money to education by about $1.8 billion. He then developed his own school funding plan, which was so despised that his own party rejected it in 2013. Ever since, Ohio has essentially created arbitrary per pupil funding increases, which bear no relation to the actual cost of educating kids.

However, that may be changing soon as state Reps. Robert Cupp and John Patterson have been working on a plan that sounds eerily similar to me, basing funding on what kids need and trying to reduce the need for local property taxes to pay for it. And that's all I've ever asked: Figure out the cost, pay for it and don't force us to go to the ballot every couple years to pay for your poorly calculated formula. I don't care what you call it. Just do it.

Given the historic nature of this school year, I wanted to show everyone what the EBM would have provided districts and what today's formula provides.

The difference is stark.

Only about 10 percent do better under the current formula. And 90 percent do worse. Usually significantly worse. For example, Cleveland receives $144 million less today than they would have under the EBM.

Think that would have helped CMSD implement its Transformation Plan? Instead, they've had to rely on local philanthropy and an historically huge local property tax hike to do not even all of what the plan called for.

For a district-by-district rundown of all the state's school districts, visit the spreadsheet I've posted here.

Now some may say that coming up with the $1.7 billion difference between a fully-funded EBM and what the state current spends is an outrageous amount. However, the state now has at least $3 billion fewer today than it could have because of various tax cuts that the state has instituted, especially during the Kasich years.

So we could have paid for a fully funded EBM if we had only cut taxes half as much. It wouldn't have required an additional income tax increase or anything.

Just not as big a tax cut. That's all.

And I bet you haven't even noticed the tax cuts. That's because the wealthiest 1 percent has seen a $17,618 tax cut. Regular folks have seen a $94 cut. And the least wealthy among us have seen an increase. That's right. Give back half of that $94 and your property taxes could have been dramatically cut by an average of $240 a year (depending on where you live, it could have been MUCH more than that).

Look, I get that finding money in this budget will be a challenge. I understand that given the makeup of the General Assembly and Governor's mansion, this will be a heavy lift.

But I also know that two House members are genuinely trying to get this right. I see a new House Speaker who lives in the school district where the DeRolph school funding case originated and probably feels like he has some unfinished business on school funding.

But most of all, I get that our kids need us to deliver for them. A new formula based on what kids need to succeed in the classroom and beyond. A mechanism that doesn't force voters to tax themselves at higher and higher rates every couple years. A system we can all be proud of.

Ten years ago, we were on our way to accomplishing that. Maybe over the next 10 years we can finish that mission.

Just as a personal aside, when I did EBM, my oldest son was in Kindergarten and my youngest had just been born. At the end of the coming two-year budget cycle, my oldest son will be driving and my youngest will be getting ready for middle school.

It is ridiculous that we are working on our third generation of Ohio students whose educations we've failed to properly fund or even calculate.

It's now no longer for my kids' sake we need to get this right.

It's for the generation behind them.

State Superintendent Tells New School Board Members Ohio School Funding is Constitutional. Data Say He's Wrong.

Well this is quite a thing. State Superintendent of Public Instruction Paolo DeMaria wrote a memo to school board members Sunday that openly claimed that Ohio's school funding system is now constitutional. Even though the Ohio Supreme Court has ruled four times that it's unconstitutional.

Why did he say this? Because the court hasn't ruled on the issue since 2002. Yet the reason they haven't is because the Court dropped jurisdiction over the case, not because they thought anything was fixed. So plaintiffs are barred from suing over the issue anymore. Yet DeMaria is telling incoming State Board members that means it's constitutional.

Because plaintiffs can't test it?

Oy.

Vay.

Look, according to the fourth Supreme Court ruling from 2002, “Until a complete systematic overhaul of the system is accomplished, it will continue to be far from thorough and efficient and will continue to shortchange our students. The overreliance on local property taxes is the fatal flaw that until rectified will stand in the way of constitutional compliance.”

So let's use the test laid out by the Ohio Supreme Court (not the State Superintendent of Public Instruction) to determine whether today's school funding system is constitutional, shall we?

Systemic Overhaul

Today's school funding "formula" is not appreciably different from the one instituted in 2002. It has a few different calculations, but it's not unrecognizable. Certainly no "systemic overhaul." In fact, it's not even a formula, per se. The amount for basic aid was set up through arbitrary increases from the Building Blocks formula last calculated in 2007. It's so inadequate at calculating student need that nearly every school district gets too much or too little under its mechanism.

State Reps. Cupp and Patterson are working on a real formula overhaul. And in 2009, the Evidence Based Model certainly fit the definition of an overhaul that calculated an actual cost. But today's "formula"?

Please.

Overreliance on Property Taxes

This is pretty simple to determine. Do property taxes make up a greater share of the cost of education today than they did it 2002? The answer is, well, yes. In 2002-2003, the local share was 51.05%. In the 2015-2016 school year, that percentage was 51.75% -- and that doesn't include the nearly $800 million or so more that school districts lose in state revenue to charter schools and vouchers today than they did in 2002-2003.

So clearly, the cost to local taxpayers has gone up since 2002-2003. In addition, look at average property tax rates. In 2002-2003, the Ohio Department of Taxation reported that the average number of mills a district collected from property taxpayers to pay for schools were 30.06.

Today, it's 37.70.

That's a 25% increase in local property taxes paying for schools!

Under the key requirements set by the Ohio Supreme Court in 2002, today's school funding system fails to meet either.

The question remains: Why is the State Superintendent telling school board members the exact opposite? Especially given how potentially influential the state board could be in helping state lawmakers and the new governor adopt a real "systemic overhaul" of the school funding system that doesn't overly rely on property taxes to fund it?

Keep Your Eye on the School Funding Ball

As you begin hearing more about the Patterson-Cupp committee's proposals for fixing school funding -- ideas that as of now hold much promise -- I want to make sure everyone is aware of what funding numbers matter as we consider future funding levels.

There are several pots of state money that go to schools. The largest is from the state's General Revenue Fund (GRF). The next largest is the Lottery Fund, which has been a problem since the beginning because all that fund did is allow state lawmakers to cut GRF funding and replace that cut with lottery money. Lottery money doesn't increase commitment to education; it just changes what percentage of that money comes from the GRF.

However, there are others that used to not be considered part of state funding, but now are (for reasons I'll explain in a bit).

The first is Property Tax Relief. This is state money that has been set aside to offset property taxes since the income tax passed in the 1970s. The deal was if schools supported the income tax, a portion of it would be used to reduce local property taxes. That's why Ohioans have, in the past, only paid $0.875 cents for every $1 of property tax raised.

However, in 2013, Gov. John Kasich eliminated this property tax relief on all future, new money levies. So while Ohioans continue to pay about 88 cents on the dollar for old and renewed levies, for new ones, they pay the full freight.

Whenever this pot of money has been used by governors to claim that the state provides about $1 billion in school funding through property tax relief, it generally has been dismissed by any serious Ohio school funding analyst. Why? Because that money doesn't go directly to school districts and kids; it goes to property taxpayers (who don't even notice the property tax cut is there, if they even know it exists at all).

The next big pot is reimbursements for Tangible Personal Property (TPP) and Utility (KWH) taxes. Prior to 2011, this payment also wasn't considered part of state support for public education, for much the same reason as the property tax relief. The reimbursement payments were created to get the support of schools during the massive tax reform included in 2005's House Bill 66. One of the reforms was eliminating the taxes on tangible personal property, or inventory. This hammered our traditional manufacturing plants, who invested heavily in equipment and inventory. However, the locally derived tax provided sometimes substantial revenue to schools and kids, so eliminating it would cause a huge cut to kids in many school districts.

So when the state created the Commercial Activity Tax (CAT) to replace TPP, the deal was it would make up for the lost TPP revenue with CAT revenue. And that was how schools ended up being OK with losing TPP. The idea was eventually that reimbursement would be replaced with something else, but until then, the state would uphold its word to schools and make the payments. So because this was simply a state reimbursement, school funding analysts also didn't count this payment as state support because the state chose to eliminate locally derived revenue with a state figure.

Until 2011.

That's when Gov. John Kasich eliminated the TPP and KWH taxes (gradually), all but eliminating what had been a $1.2 billion line item in the 2010-2011 school year. So now local districts lost state funding, so TPP and KWH reimbursements were now considered school funding cuts (as they would have been in 2005 if the state hadn't agreed to the CAT payments).

Finally, during the 2009-2010 and 2010-2011 school years, the federal stimulus gave Ohio about $450 million a year (on average) to help make up for lost state revenue due to the Great Recession. The idea was states would replace the stimulus money with state money once revenues returned post-Recession. So because this money flowed through Ohio's school funding formula, it's been considered part of the state's school funding commitment.

This is a long-winded way of getting to the issue: Beware of state leaders who claim that certain pots of money should be included as part of the state's school funding commitment, for comparison's sake.

I mention this because the Ohio Department of Education has produced a truly misleading graphic on its website (which I have posted at left) dubbed "Primary and Secondary Education Funding FY 2009 - FY 2019". In it, they try to show that Ohio's greatly boosted school funding during the last 8 years. While the political implications of that timeline are obvious, I'll just discuss the policy problems with their assertion.

First of all, the period is long enough that inflation matters.

For example, according to the Bureau of Labor Statistics, a dollar in 2009 is worth $1.16 today.

In addition, it includes the property tax reimbursement as state education funding -- a figure that the vast majority of analysts would never include because it doesn't go to kids; it goes to adults who are property taxpayers.

Finally, the amount includes Lottery money, which is OK, except the amount has increased by more than 50 percent. Why? Because of VLTs and other gambling opportunities that have increased since 2011.

So if you wanted to look at money that went directly to kids (and didn't supplant GRF the way the lottery does), then you need to look at GRF, TPP reimbursement and stimulus. Those are the funds that directly fund schools.

When you do that, and build in the inflationary adjustments for each year, you'll see quite a drop in state funding for Primary and Secondary Education since the 2009-2010 school year -- $863 million, in fact.

Even if you include all the so-called funding pots ODE includes, it's a $664 million inflationary cut to Primary and Secondary Education.

Which points out the challenge for Reps. Patterson and Cupp. In order to keep pace with the Great Recession spending on education, they have to boost funding by nearly $1 billion. And they have to do it with a new Governor whose only stated K-12 initiative was to boost some poverty funding and provide a more "equitable system" (the problems with equity minus adequacy, I've discussed before).

But that doesn't mean what these state reps are doing isn't important. What it does mean is we citizens must insist that the rest of the state's leadership follows through on their good work.

And above all, it means that we all keep our collective eyes on that pesky school funding ball.

Brenner School Funding "Fix" Gets Courtesy Hearing

Within the first couple months of the 2017-2018 legislative session, state Rep. Andrew Brenner, R-Powell, introduced a new Ohio school funding plan.

As chairman of the House Education Committee, people logically thought this might be a serious attempt to fix Ohio's long-broken school funding system. And while I pointed out how absurd the plan was -- essentially giving huge influxes of cash to privately run charter and largely religious private schools while cutting funding to most local public school districts -- the plan's introduction was treated seriously be many in the media.

However, the bill -- HJR 3 -- had zero co-sponsors.

Not a one.

I thought that would be a big tell about this plan's viability and quality.

Then, in an embarrassing rebuke of the House Education Chairman's authority, the bill was sent to the House Finance and Appropriations Committee, not Brenner's committee. School funding bills should generally go to finance. But out of respect for the committee chair, one would think his big school funding bill would be sent to his committee.

Yet it wasn't.

What does all this inside baseball mean?

Well, it means that instead of being able to talk about his school funding plan for nearly two years in his own committee, drumming up support, Brenner will be given a single hearing tomorrow in the Finance committee -- a hearing that's required by House rules for all pieces of legislation filed prior to July of even years. Even the crazy bills that have zero chances of passing.

So the House Education Committee Chairman can only get a single, required hearing for an overhaul of the state's school funding system, which has been declared unconstitutional four different times.

That, my friends, is a legislator with zero clout.

Data Suggests Far Worse Fake Student Problem at ECOT

New state funding reports indicate that ECOT had nearly 8,000 fake students in its last full year of operation. According to the Ohio Department of Education, its last year of operation, ECOT couldn't account for about 20 percent of its students. However, the monthly finance reports ODE puts out suggests the number may have been closer to 55 percent.

First of all, the last year ECOT was fully operational was in the 2016-2017 school year. So I'm using that as a baseline for comparison.

In the 16-17 school year, ECOT received $103.6 million for 14,208 students. This year, it's zero dollars. A lot of news stories have tried to figure out what happened to all those students. One of the challenges appears to be that they may not have actually had all those students.

Follow me here.

Looking at the changes in charter school funding and enrollment between the 16-17 year and the most recent funding report available from the Ohio Department of Education from this month shows that Ohio e-school enrollment is down 9,851 students. However, enrollment in Ohio's brick and mortar charter schools is up 2,060 students.

So overall enrollment in Ohio's charter sector is down 7,791 students.

Assuming the vast majority of those students came from ECOT, perhaps those 7,791 students may not have actually ever been there.

Why?

Because school district enrollment is down 21,860 students from 2016-2017. If those 7,791 students returned to school districts -- the most likely landing spot -- one would expect school district enrollment to have showed an increase. But it's dropped a good deal.

To be fair, without seeing actual head counts, it's tough to explain why. Was there a big graduating class in Ohio school districts in 2016-2017 that would help explain this?

ECOT graduated about 2,000 students in 2017, but even subtracting out those students from the 7,791 "missing" students means 40 percent of the ECOT total is unaccounted for -- about double the rate that was found by ODE.

So there seems to be something going on here.

I would sure like to know how many, if any of the 7,791 students ECOT claimed it had in 2016-2017 that aren't in charter schools anymore were actually ever there to begin with. Because it looks like the state's 20 percent assessment may be significantly lower than first thought.

ECOT gets an A in Achievement because kids weren't chronically absent. Huh?

The new state report cards just came out with overall grades being issued for the first time. And outside of telling us what every report card has told us over the years -- namely that Ohio's school districts and buildings perform far better overall on state report card measures than charter schools -- there's an interesting outcome for the Electronic Classroom of Tomorrow (ECOT).

ECOT has never done well on the state report card. Of the 53 possible grades it could have received through the 2016-2017 report card, it got 46 Fs. It was especially bad in the components that make up the overall achievement component. The overall grade is determined by merging the six categorical grades (Achievement, Growth, Graduation, Cap Closing, Improving at-risk K-3 Readers, and Prepared for Success).

This year, ECOT got an A in the Achievement Component.

How can this be when ECOT has historically been the worst performing school in the state? The answer lies in the fact that ECOT closed half way through the year. So the school did not get graded on several components that it traditionally bombed. The only Achievement category indicator it was graded on was meeting state indicators -- raw test score information. Schools can be graded on up to 26 different indicators, depending on how many students the schools tested that are in each category. For example, if a school doesn't have high school students, it won't be graded on the performance of high school students.

Last year, ECOT met 0 of the 23 indicators it was measured on. This year it met one indicator. And it was only measured based on one indicator. What was that indicator?

I kid you not. It was chronic absenteeism.

Last year, 13.5% of ECOT's kids were listed as chronically absent. This year, it was 7.5%, which met the indicator and qualified as an A.

That's right. The school that ripped off taxpayers by at least $200 million because it charged for kids who were never there, or were absent for whole months and seasons of time got an A from the Ohio Department of Education because kids weren't chronically absent.

Absolutely incredible.

So when you see that ECOT got an A in Achievement on the state report card, let's perhaps take that with a grain of salt.

DeWine-Husted Education Plan: We'll Fix our Failures. Trust Us.

Mike DeWine and Jon Husted have had a heavy hand in determining the Ohio's current state of public education policy.

DeWine was on the conference committee that determined what the final version of the No Child Left Behind Act would look like in 2001. That law ended up creating the high-stakes testing structure we have in place and has received a lot of recent pushback from nearly everyone in the education community as incentivizing test taking over critical thinking.

Likewise, in 2001, then state Rep. Jon Husted served as the Vice Chairman of the Primary and Secondary Education Subcommittee on the House Finance and Appropriations Committee -- the most important committee of any sort at that time. In 2003, he became chairman of that subcommittee -- a position I would hold 6 years later.

When Husted was Vice Chair, the P&S subcommittee was the most important committee of any type in the legislature because it was the committee handling school funding. At the time, the Ohio Supreme Court had ruled twice that the way the state funded schools was unconstitutional because it didn't equitably or adequately provide a thorough and efficient education for our children. After Husted's attempts to fix the system during the 2001 biennial budget, the Court ruled not one, but two more times that the way Husted's system provided funding for students was unconstitutional.

So it was kind of surprising to me to read DeWine and Husted's education plan, which was just released today as part of their gubernatorial campaign. In it, DeWine and Husted said they want to reduce testing and find an equitable funding system.

Here's what it said about testing: "Standardized tests are limiting educator’s creativity and forcing them to a teach to a test."

Here's what it said about Ohio's school funding system: They "will create a more equitable funding system that directs state resources toward supportive services for children most in need."

So, the architects of the nation's high-stakes testing regime and Ohio's unconstitutional funding systems want to fix their previous failures.

I swear.

That's what they're saying.

Not only that, but there is almost zero detail about how they plan on doing this. On the testing, the Ohio Department of Education and State Board of Education have presented a promising change in Ohio's report card system that would de-emphasize testing. Are DeWine and Husted saying they want to do that? Will they get rid of certain tests? Will they eliminate the test-dependent accountability system?

Who knows?

On funding, it looks like they will be putting more money into support services for economically disadvantaged students. But will that be additional revenue? Or will it be taking money from somewhere else to fulfill that obligation? Will this be additional money for wraparound services? Or will it mean more teachers and smaller classes? Will it mean a dedicated element of the school funding formula dedicated to psychologists or other support staff?

Again, who knows?

But I find it awfully interesting that one of the key architects of the law that created our high-stakes testing system now wants to de-emphasize tests (as opponents of NCLB have said for years). And the architect of our unconstitutional funding system now wants more equity in the funding system (using the same language I and others have used for years).

I'm glad that these two men are now acknowledging that the last 17 years in which they have led Ohio and America down their education policy paths has essentially failed. But it sure seems like they're saying, "I know we tried this before and screwed it up, but trust us, we won't screw it up again."

Fool me once...