Ohio Municipal League
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John Mahoney
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OML E- BULLETIN
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Court Welcomes General Assembly Back; Orders More Money for Schools.

Two months after the General Assembly passed and the Governor signed a $45 billion state biennial budget, including a $1.4 billion increase for primary and secondary schools, the Ohio Supreme Court issued its opinion (DeRolph III) on school funding this week. The majority opinion, written by Chief Justice Tom Moyer, essentially told the General Assembly and the Governor that the latest funding formula was almost constitutional. Of course, in the "almost"is potentially a very large problem for the state budget and, perhaps, state aid to local governments.

The court's 4-3 decision says that the Court would consider the state's funding formula constitutional if the state made two changes. The first is to modify the method for calculating what is a proper figure for the state's basic per pupil aid. Under the current budget that figure is $4814. Every school district in Ohio, combining state aid and some local resources, begins the school year with at least that amount of money for each student in the district. The court said the state needs to make changes in the way it calculates that number which would raise that number by $331 per student.

The court also ordered the state to move forward, by two years, what is called Parity Aid, aid that sends more aid to poor school districts in an attempt to equalize educational opportunities in those districts with wealthier districts. By speeding up increases in Parity Aid, that change would impact the next biennial budget by increasing Parity Aid by $300 million over FY 2004 and FY 2005.

Of immediate concern to all the parties involved in this case is just how much the Court's call for per pupil increases will cost. News reports, based on interviews with the members of the Court, had the Court considering this change at a cost $800 million in additional aid for schools in this biennium. The Ohio School Board Association estimated the cost of the change would be slightly higher. The Ohio Coalition for Equity and Adequacy of School Funding, the group which brought the DeRolph cases to the Court, estimated the change would cost $1.2 billion for this biennium.

However, Senator Richard Finan, President of the Ohio Senate, said in a press conference Thursday night that the change ordered by the Court would cost $2.5 billion to implement over the biennium, based on estimates by the Legislative Service Commission and the Ohio Department of Education. The difference of opinion over the figures stems from the amount of change that would be caused by making the changes ordered by the Court on the target figure for per pupil basic aid. The Court believes such changes would increase basic aid to about $5100 per pupil, while the Senate's figures say those changes would cause basic aid to rise to a little over $5400 per pupil.

Using the Senate estimates, Finan said such an increase in biennial school funding would require a 45% cut in all other discretionary state spending plans or a sales tax increase of up to one-and-quarter cents or a state income tax increase of 17%. Finan said that neither a tax increase nor such cuts in other state spending would ever pass through the Ohio Senate. Those sentiments were clearly echoed by Speaker of the House Larry Householder in speaking about possible House reaction to the Court's decision.

Despite strong dissents to the contrary, the Court majority praised the efforts of the Governor and General Assembly to improve education funding, prior to its ordering the substantial increase in funding. The Court also said such efforts showed good faith by the state in trying to fund the schools better. Because of that good faith effort, the Court said it will now give up its jurisdiction on the school funding issue. Legislative leaders and the Governor, in turn, praised the Court's majority for praising the state's efforts, before expressing their wonderment over where all this new money for schools would come from.

That wonderment is bound to continue next week when the Legislature returns with a committee schedule light on municipal issues and Sessions on Tuesday and Wednesday. The General Assembly is scheduled for two more days of Session in September (18,19). In October, The Assembly will be in Session seven days (2,3,4,10,11,16,17). House Sessions are scheduled for October 30 and 31. In November, only the Senate has Sessions scheduled (14,15). One session of both Houses is scheduled for December 4 (if needed).

COMMITTEE MEETING SCHEDULE FOR WEEK OF SEPTEMBER 10, 2001

TUESDAY, SEPTEMBER 11

HOUSE JOBS, AEROSPACE & TECHNOLOGY SUB., 1:30 p.m., Rm. 113, Chr. DeWine, Phone: 644-6020.

HB 6 TAX INCREMENT FINANCING (Hollister) Establishes the Capital Access Program in the Department of Development and permits political subdivisions in economically distressed areas to employ tax increment financing throughout a designated area. (5th Hearing - Proponent, opponent & interested party - Possible vote)

SENATE WAYS & MEANS, After Session, South Hearing Rm., Chr. Blessing, Phone: 466-8068.

HB 244 OPFP REPORTS (Niehaus) Modifies the penalties assessed against employers who fail to submit certain reports and information to the Ohio Police and Fire Pension Fund and reduces the amount of certain penalties currently owed by employers. (1st Hearing - Sponsor)

HB 157 PENSION BENEFITS (Schuring) Provides that the annual cost of living increase paid to retired members and beneficiaries of Ohio's state retirement systems will be three per cent. (1st Hearing - Sponsor - Pending referral)

WEDNESDAY, SEPTEMBER 12

HOUSE JOBS, AEROSPACE & TECHNOLOGY SUB., 9:00 a.m., Rm. 113, Chr. DeWine, Phone: 644-6020.

HB 6 TAX INCREMENT FINANCING (Hollister) Establishes the Capital Access Program in the Department of Development and permits political subdivisions in economically distressed areas to employ tax increment financing throughout a designated area. (6th Hearing - Proponent, opponent & interested party - Possible vote)

JOINT COMMITTEE ON ESTATE & DEATH TAXES, 4 p.m., South Senate Hearing Rm., Chrs. Senator Spada (Phone: 466-8056) & Rep. Latta (Phone: 466-8104). Overview of federal action on estate and death taxes and public testimony.

THURSDAY, SEPTEMBER 13

HOUSE WAYS & MEANS, 10 a.m., Rm. 121, Chr. Kilbane, Phone: 466-0961.