CHICAGO - A panel of Ohio education experts is estimating it will cost the state $6 billion to $7 billion to reform school finance if lawmakers decide to adopt either of the two plans it is advocating.
The panel released tentative cost estimates the plans Tuesday. One proposal, which sets a minimum property tax levy per district and offers a limited match of state funds to districts that exceed that level, would cost about $7.3 billion. The other, which lets each district set its own property tax levy and guarantees supplemental state funding to meet a per-pupil stipend, would cost about $5.9 billion.
The expert panel was appointed earlier this year by an Ohio judge to devise a more equitable funding system for the schools. Judge Linton Lewis Jr. of the Perry County Court of Common Pleas found the state's education funding system unconstitutional in July and ordered a panel to submit reform proposals to state lawmakers by the end of the year. The legislature is not required to take any action on the reform proposals, and Ohio is appealing Lewis' decision. However, some state officials have said they expect the panel's work to serve as the basis for reform discussions.
Under Ohio's current funding system, almost half the $8.7 billion annual cost of education is paid by local property taxes. The state covers 45% and the remainder is covered by federal aid. The panel predicted that the proposal to set a minimum property tax rate would add $4.1 billion to the state share of school funding, while the proposal allowing districts to set their own levies would add $2.8 billion.
Each of the plans guarantees a base level of per pupil funding of about $4,300. That figure would be adjusted to reflect the local operating costs, the district's transportation expenses, and the number of students falling into exceptional categories, including special education and vocational and gifted training.
The more expensive of the two proposals requires districts to levy 25 mills of property tax to contribute to the per pupil spending base level. The state would then contribute the remainder and would match - up to a point - any money raised if the district elects to levy property taxes that exceed the minimum level.
According to the panel's sample calculations for fiscal year 1996, a hypothetical school district with a total property valuation of $40 million that chose to levy 28 mills of property taxes would receive $4.46 million from the state and raise $1.12 million locally. The total expenditure for each student would be $5,581.
The lower cost proposal would let each district set its own millage rate and guarantee a state contribution so that each mill charged results in a $150 per pupil stipend. Because property values are lower in low-income districts, it is likely those districts will levy more to meet the base level and in turn will get more state money, according to John Rochester, assistant director for governmental relations in the Ohio Department of Education.
According to the panel's sample calculations, the same hypothetical school district would receive $3.86 million from the state and raise $1.12 million locally. The total expenditure for each student would be $4,981.
The panel presented its cost estimates to a court-appointed group of 50 citizen activists and educators. That group now has until Monday to forward the plans and their cost estimates to the state Board of Education. The board will then send the proposals on to Gov. George Voinovich, legislative leaders, and Lewis by the end of the year.
Analysts Group Boosts
Funding for Education
The National Federation of Municipal Analysts said this week that it has set aside $10,000 to enhance and expand the educational programs the group offers to its members and other municipal bond professionals.
The money, which was put in the federation's program development escrow fund, matches a grant made late last year by the Massachusetts Financial Services Co.
In a news release, the group said it anticipates hat additional funding for its educational efforts will come from other sources in the municipal bond industry. Bill Solari of Moody's Investors Service has been chosen to chair the group's education funding subcommittee. The panel will devised new ways of financing existing and proposed NFMA educational programs.
Federation chairman Tom Kenny of Franklin Resources said that the additional funds solidify the group's commitment to its primary mission "to provide education for the municipal bond industry."
Established in 1983, the National Federation of Municipal Analysts has more than 900 members.