State school funding OK for now; but future is uncertain
By LENNY C. LEPOLA
News Assistant Managing Editor
While some media reports are calling Governor Kasich’s new education funding formula in the proposed biennial budget a comprehensive overhaul of funding to education, during Monday evening’s Big Walnut Local School District Board of Education meeting District Treasurer Felicia Drummey said it’s not.
Nothing is firm yet, Drummey said. The biennial budget must travel through a legislative process; a final budget doesn’t have to be approved until June 30. The good news is, if the budget’s formula holds up under legislative scrutiny Big Walnut would not see a reduction in state funding for the next two years.
The bad news?
“The governor and his staff have put school districts on notice that the state guarantee is unsustainable and unfair and school districts should prepare for an eventual phase-out,” Drummey said. “The governor has said that school districts would see no reductions in this budget. Since we were prepared for reductions we’re relieved.
“But the district has seen a 6.2 percent in reductions in state funding since 2010,” Drummey continued. “Federal stimulus dollars replaced most of the holes left by those funding reductions, but when stimulus dollars ended the state did not step in and fill the gap.”
Drummey said if the state guarantee were phased out the district would lose an additional $4.3 million per year in today’s dollars. Drummey said making up those lost dollars locally would be the equivalent of a 7-mil levy – an additional burden that would have to be shouldered by district property owners.
Board member Andy Wecker had a problem with that scenario.
“Let me get this straight,” Wecker said. “We pay income tax and sales tax into the state general fund, but if the guarantee is phased out none of those dollars will come back to us?”
Drummey said that was true.
“With a 105-square-mile school district, the state says we have a lot of real estate valuation for 3,000 students,” Drummey said. “The formula says we have increased taxing capacity, and the governor’s philosophy is to send those dollars to poorer school districts, so the underlying flaw in the formula is still there.”
Drummey also said the state’s figures for district’s like Big Walnut does not include high costs like transportation, and somehow the state used lower enrollment numbers for Big Walnut than the current student population – further skewing the formula.
Adding to the confusion, Drummey said, is that there has been no true formula since 2009. Everything since then has been a patch, she said.
“The state can’t abdicate on its shared responsibility to fund schools,” Drummey said. “In the state constitution it says the state will fund education with whatever means possible, including raising taxes. Phasing out the guarantee for a district like Big Walnut would mean the state is abdicating on its responsibility to fund education.
“The devils in the details,” Drummey added. “The good news is we will be stable for the next two years.”
Drummey did have other good news. In her monthly financials report to the board Drummey said January revenue was $276,000 above projections.
“Income tax revenue was 5 percent higher than projected,” Drummey said. “That’s employer withholding and a very positive indicator that people are back to work or working more hours. State aid also included $64,000 from casino revenue.”
Drummey said the next disbursement of casino revenue would be $71 per pupil and come in August, but that would be during the next fiscal year.
“We also had $190,000 less than projected in expenditures in two categories, benefits and purchase services,” Drummey said.
Drummey said the reduction in benefits costs is the result of moving to United Health Care as an employee health insurance carrier, and from a modification of the district’s health insurance design during the most recent round of collective bargaining with district unions.
“Previously we had what’s called a very rich plan,” Drummey explained. “But during negotiations we asked employees to help share insurance costs through deductions and an increase in some co-pays. If we have variances in the budget,” she added, “these are the kinds of variances we want to see.”
As an added note, Drummey said some local residents are getting brochures from private companies that, for a fee, will file property tax complaints for homeowners.
Drummey said Delaware County Auditor George Kaitsa said to be very wary of companies assisting with property valuation appeals. One private firm’s brochure said that for $159 property taxes would be reviewed.
Drummey said if property owners believe property taxes are incorrect they could file an appeal (a property valuation complaint) at no cost with the Delaware County Auditor’s Office.
The Delaware County Board of Revision reviews all property valuation complaints. The board of revision is a three-member board that includes a representative appointed by a county commissioner, the county treasurer and the county auditor. Each case is considered on its own merits based on evidence presented by the homeowner.
Drummey said the request form must be returned to the Delaware County Auditor’s Office by March 1.