Ohio Gets New School Finance System

Last Updated: August 20, 2009

This article appeared in the August 2009 Rural Policy Matters.
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The Ohio Legislature has passed a two-year budget bill containing most elements of Governor Ted Strickland’s evidence-based school funding reform plan. The funding approach is one of four main “costing-out” models that identify effective programs and practices and determine how much they cost to implement in a prototypical school. Under evidence-based funding, states select only educational methods that are supported by research on best practices.
The plan was controversial and the governor is touring Ohio schools to promote the changes that the new finance system will bring, including a decreased reliance on local taxes and minimal budget cuts. State aid to schools will be cut by only one quarter of a percent in the next two fiscal years. The plan will be phased in over 10 years, and its requirements will be waived in years that revenues don’t meet expectations.
All except three districts will gain funding under the plan, although gains this year are primarily the result of federal stimulus funding.
Revenues to pay for the plan are expected from an improving economy and from additional slot machines that will be added at the state’s seven horse tracks. Strickland has also assured districts that there are no plans for consolidating schools under the new system.
Several provisions were included to ensure passage. One was the waiver provision in years with low revenues. Another was continued support for charter schools. Strickland had proposed revoking funding and charters of low-performing charter schools.
The legislative debate also considered but did not pass a weighted student funding model, often referred to as “backpacking,” in which funding is tied to individual student characteristics and students take funding with them when they transfer schools or districts. This funding method has been abandoned in the few places it has been tried and is often viewed as facilitating voucher plans.
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Read more from the August 2009 Rural Policy Matters.