Paul Kostyu: Sen. Schuring's plan to boost revenue stream for school funding

School-funding revamp
Schuring proposes plan to boost revenue stream
Canton Repository, Tuesday, December 4, 2007
By PAUL E. KOSTYU
Gatehouse COLUMBUS BUREAU CHIEF

COLUMBUS It has a long way to go, but a constitutional amendment that would change how schools in Ohio are funded will be introduced today, and its sponsor wants it on the November 2008 ballot.

Without seeing how the amendment specifically helps districts, Superintendent Chris Smith of Plain Local Schools said, “We’re playing a high-stakes game of education chicken.”

That’s because Plain Local and other districts have failed multiple times to pass levies, and they need help now. Even if Ohioans approve the constitutional amendment, its effect may not be felt for a year or more. The Plain Local school board decides Wednesday whether to try a seventh time to pass a levy.

State Sen. Kirk Schuring, R-Jackson Township, will introduce a long-promised plan to change how primary, secondary and higher education are funded in Ohio. Each chamber of the Legislature must pass the measure with a three-fifths majority to get it onto the ballot.

Schuring expects the proposal to relieve pressure on property taxes by increasing the state’s share of money. The state funding to individual school districts is based largely on local property wealth, which varies widely among rural, suburban and urban districts.

MICHIGAN MODEL

Schuring said a similar Michigan plan passed in the 1990s dropped the local share of funding from 60 percent to 20 percent, while the state contribution increased by a like amount. He expects that to happen in Ohio.

According to an analysis from the Legislative Service Commission, which researches and drafts legislative proposals, $12.24 billion will be spent by the state in the current fiscal year to subsidize education.

Based on that figure, Schuring’s proposal would fund schools using:

-- 59.6 percent of income tax receipts,

-- 71.2 percent of sales and use tax receipts,

-- 70 percent of the Commercial Activity Tax,

-- 25.4 percent of the Kilowatt-hour Tax and

-- 100 percent of Lottery profits.

The earmarks on income, sales and use taxes are new. The percentages from the Commercial Activity and Kilowatt-hour taxes are sent to schools now, but are set to expire in 2019 and 2017, respectively. The amendment would extend the reimbursements indefinitely. The lottery money is now constitutionally protected for primary and secondary education. Schuring’s amendment reinforces that.

Schuring said the state contribution to education will increase because collection of income and sales taxes grew by 200 and 300 percent, respectively, over the past 20 years.

SMOKE AND MIRRORS

“We avoid the smoke and mirrors of the lottery that enabled other revenues to be diverted from education,” Schuring said.

Schuring said he did not know how his proposal would affect individual districts, but said it would not eliminate the need for property taxes. And his proposal doesn’t “blow a hole in the state budget,” but will mean other departments will have to argue over what is left.

“We’re not going to let other aspects of the state operating budget rob from education,” he said. “This makes education the No. 1 priority. It will enhance Ohio’s competition in the global marketplace. Everyone understands that education and knowledge build the economy of the future.”

Gov. Ted Strickland, who has been criticized for not coming up with his own education funding plan, called Schuring’s effort “very admirable.” He said he would examine the proposal “and make a decision about its merits.”

Tim Pickana, treasurer of Canton City Schools, said he favors a mechanism that includes using income and sales taxes, which he said is more fair than property taxes.

Canton schools plan to close buildings because its 8-mill levy was defeated in November. The state placed the district in fiscal caution. Pickana said if Schuring’s proposal is approved by the General Assembly and Ohio voters, it likely won’t have an impact until 2010.

Smith said the Plain Local district can’t wait that long. It will need to know how much the new formula will provide “very quickly.” He worried that some voters will wait to see what happens with the proposal instead of approving a levy.

“This is a complicated jigsaw puzzle,” Schuring said. “By introducing this now, it starts the process of the leadership in the Legislature and the governor to work together to get something done.”

Click here for a breakdown of Schuring's proposal (PDF file, single page)

Reach GateHouse Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail: paul.kostyu@cantonrep.com