Ohio’s Formula to Fund Schools Way Off? (OH)
July 15, 2010
Ohio’s new school-funding formula under-funds teacher salaries and benefits and could need more than $1 billion a year added if it is to properly pay for education.
That was a recommendation yesterday from a subcommittee that says state leaders should increase the teacher-salary figure in the funding formula developed last year by Gov. Ted Strickland and legislative Democrats.
The full School Funding Advisory Council is expected to take up the proposal next month in preparation for a full report to the governor and legislative leaders in December on potential changes to the state’s school-funding structure.
The funding formula, called the "evidence-based model," contains more than two dozen components to pay for what Strickland says will be a constitutional funding system. But two are the most critical in deciding how much money schools are supposed to get: the teacher salary and a poverty-based index number that is multiplied by that salary figure.<br /& gt;
The subcommittee voted unanimously to recommend increasing the teacher-salary figure in the formula from $50,700 to $55,250, and it also called for an additional 10 percent increase to cover health-care costs. The plan would keep in place the 14 percent supplement in the current formula to cover retirement benefits.
Unlike the current formula, which uses a median teacher-salary figure, the subcommittee said a more accurate number is to take the average (arithmetic mean) of all individual teachers.
"I think it’s important that if this is the formula the state is going to use to fund the schools that the input numbers be as accurate as possible," said
Michael Dawson, a Republican appointee to the council. "It was clear looking at the data that the number used in the current formula significantly understates the reality of what’s happening in the school districts."
Richard Petrick, vice chancellor for finance for the Ohio Board of Regents and head of the subcommittee, agreed the new number is more accurate.
"We were not asked to assess the budgetary implications," he said. "This is a better reflection of what the cost of the model is."
Dawson and Petrick noted a recent report that showed 73 percent of Ohio teachers work in districts where the average salary is greater than the figure in the current formula. Meanwhile, about 46 percent are in districts that pay more than the proposed $55,250 figure.
But no matter what the advisory council ultimately decides on this and a host of other funding issues, they are unlikely to have any impact on how much schools get in the nex t two-year budget, which is facing a structural shortfall of up to $8 billion.
Council recommendations largely would impact what schools should get if the formula were fully funded. But as Ohio takes a beating from the national recession, the state today is nowhere close to full funding.
Strickland said the formula should be fully paid for by 2019. If the governor’s plan were fully implemented now, the state would pay out $9.8 billion to school districts this year (without the additional
$1 billion-plus calculated yesterday). Instead, the state will spend $6.5 billion for daily operations, and $457 million of that is from one-time federal stimulus money.
Unless other formula changes offset it, increasing the teacher-salary figure would increase that $9.8billion figure and widen the gap between what Ohio is paying and what the formula deems is needed to fund a quality education.
Most education advocates are just hoping not to see a funding cut in the 2012-13 budget.
"As a legislator, I’m always concerned about the budget issue, but the role of this council is to come up with the best formula we can," said Rep. Stephen Dyer, D-Green, a subcommittee member who helped shape the funding formula.
"For too long, I think councils and others like this have been too greatly influenced by the political factor. This council’s job is to come up with recommendations, and it’s going to be our job next year to implement them."