Ohio's school-funding future: The next two-year budget

In this episode of Leading the Way, we sit down with OSBA Legislative ConsultantMalania Birney to break down Gov.Mike DeWine’s final two-year budget and what it means for K-12 education. School board members and education leaders won’t want to miss this critical discussion on the budget process, key funding changes and legislative updates shaping the future of public education. This episode is sponsored by Pappas & Associates—Shaping Policy with Integrity.

For more resources, training and advocacy updates from the Ohio School Boards Association, visit ohioschoolboards.org.

Transcript

SPEAKER_01 0:01

Ohio's next biennial budget is here. What funding changes can schools expect? And how will new policies impact students, educators, and community? I'm Scott Kirf and welcome to the Leading the Way podcast. It's brought to you by Tapas and Associates. They're shaping policy with integrity. Well, Elena Burney is my guest today. She is with our legislative team, which will be very, very busy the next few months as the state's new two-year budget makes its way through the State House. And Elena, thanks for being here. Thanks for having me. So the budget process always starts with the governor's budget. Governor Mike DeWine recently released his final two-year spending plan. Tell me about what's in this plan for public education.

SPEAKER_00 0:45

Absolutely. The governor's plan was released this past Monday, February 3rd. And doing that, he released what's called his Blue Book. It's a 600-page document outlining his spending across all of the line items at the state. But particularly to education, we saw a good amount of investments. Continuing with his trend from the last budget, Governor DeWine proposed continuing the base cost phase in of the fair school funding formula in years five and six. These are the last two proposed phases of that formula. So by the end of this biennium in fiscal year 2027, we'd better be at 100% of that base cost. He did leave the inputs to that cost calculation at fiscal year 2022 numbers. Education Advocates and NOSBA is hoping when that turns over to the legislator to get that legislature to get that increased to fiscal year 2024 numbers. The governor also proposed reducing the formula's guarantees by 5% each year of the biennium. We don't have the exact bill language yet that would showcase to us exactly how that's going to work. But the intent stated by the administration and his staff was that they didn't want to be funding phantom students or be funding schools at the same amounts, even though they have declining enrollment. We do know from data that we collect of districts across the state that there are lots of reasons that a school could be on the guarantee. It's not exclusive to declining enrollment. In fact, in fiscal year 24 to 25, there are about 464 schools that had declining enrollment, and exactly a third of them were then placed on the guarantee. So two-thirds of the districts with declining enrollment are not on the guarantee. There are other reasons for that. And once we see the bill's language and understand a little bit more about how the administration is proposing those reductions, we can help supply information to the legislature and districts that would be impacted to explain their situations and explain the nuances with the guarantee.

SPEAKER_01 2:49

I hear that. What does that mean exactly?

SPEAKER_00 2:52

Yeah, there's a handful of different types of guarantees put into our formula. So I'll give just a general overview. But the the function of these guarantees as we're phasing in a formula and computing very personalized costs and local capacities and state shares to each district every year. The guarantee marks um different years based on which one you're on that you wouldn't receive funding less than you received in that year. So the intent is to provide stability to districts to plan. They would know that they wouldn't receive less funding than they did in fiscal year 21 or 2020 or some of the other guarantees. It's it's a mechanism to make sure there aren't big swings or shortfalls in the aid that you're receiving.

SPEAKER_01 3:38

So the House Speaker, Matt Hoffman, uh initially said, uh, and this was before the governor had released uh his budget, that the fair school funding plan was not sustainable. What are you hearing now at the General Assembly?

SPEAKER_00 3:50

Yeah, that was a really big headline and I think caused concern for lots of districts and education advocates across the state. We know that the state of Ohio is still in good fiscal health. We have revenues exceeding our expenditures, we have a full rainy day fund, but we are heading into this biennium without the big influx of federal dollars that we saw in the last few bienniums over the COVID-19 pandemic. So we know legislators are trying to be a bit more conservative in their expenditures. And so um while that statement was a cause of concern a few weeks ago, the speaker has been more recently quoted and in many media outlets saying that the school funding formula is a big part of our budget. It's a complex part of our budget and it requires uh a lot more discussion and deliberation. So um OSBA is fully prepared to be a part of those conversations as the budget moves from the House to the Senate. We, in ordinance with our legislative platform, are full supporters of the funding formula. Um, our priorities this budget include making sure that the phase in of years five and six remains in the budget. Right. Again, updating those inputs to the base costs to fiscal year 2024, our most recent data on expenditures to educate a student. We're also looking for, on top of protecting those things, a permanent place in the formula for our educational service centers. We know that they provide invaluable services to our districts, and we believe they also deserve some consistency in the formula. And lastly, we're looking at transportation along with the other state associations, increasing the weights that a district receives to transport non-public students. We know what they're getting now isn't computing with the costs. Um, and we are also asking the state to take a look at transportation systems as a whole across the board, whether you're a public school, private school, ESC, career tech center. Right. The system just isn't working. We don't have enough drivers, infrastructure, um, and it's causing a lot of problems. We want to look at that as a whole, statewide, with all of our stakeholders and see if there are better decisions that can be made to effectively and efficiently transport our students to school.

SPEAKER_01 5:56

So you as uh you being part of OSBA's legislative team, obviously hearing from uh a lot of school board members, superintendents, other education leaders, what uh what are their biggest concerns? What are they saying to you when they've initially seen the governor's budget?

SPEAKER_00 6:13

I think the concerns that we're hearing from school administrators uh uh mainly pertain to the formula. And we're we're at a pretty critical time and continuing and finishing the initial phase in, um, making sure that we are updating the formula so that it's balanced across the way is something that we all want to achieve in this budget because while we we talk about the phase in being the final years of the formula, that is just particular to the base costs, and we know that there's additional work that needs to be done on top of that for our students with higher needs, um whether those are special education students, gifted students, disadvantaged pupils, etc. Um, so we we don't want this budget to be the end of those discussions. We want to make sure that the formula is maintained, that it's healthy, and we can continue to grow the areas that we need to. Um, one really big part of the conversation this year in particular is higher property taxes and valuations. When we're talking about the school funding formula, the local capacity side of it, so your property tax valuations, your community's income, all of that gets computed into what you can raise to, as a community, to educate your students. And those data sets are automatically updated annually in state law. Whereas when we're talking about the inputs of the formula, the discussion about what it costs to educate a student, that has to be manually updated in the budget. So I think a main concern is are those inputs for school administrators because with property valuations on the rise, but the costs and data sets used to calculate costs being a handful of years behind, it's shifting the burden of school funding onto our local communities. And we know from those high valuations that our our taxpayers are already strained. Um again, advocating for and wanting to make sure that the formula stays healthy, maintained, balanced. Um, that's a key focus of all of our administrators across the state.

SPEAKER_01 8:13

And correct me if I'm wrong, the property taxes are that's the main source of funding for schools, right?

SPEAKER_00 8:18

We we do have a reliance on property taxes. In the in the fair school funding formula, they added in the the mixture of looking at your income of your residents as well. Um, but again, the the property tax piece of it is is a big part.

SPEAKER_01 8:32

I wanted to talk about the process now and the next steps. Uh obviously the governor has released uh his budget. What happens next in the legislative process and what should school members be looking out for?

SPEAKER_00 8:43

Yeah, the so the the governor introduced his budget this week, but the process actually started um back in October of last year. So each of the agencies went through their budgets and and sent their request to the governor. That's what he's been looking over, compiled into his um blue book document that was released this week. And then throughout the week, we saw at the state house um testimony in front of the House Finance Committee from all of those agency leaders explaining their specific piece of the governor's budget, what they asked for, what programs they may be getting rid of rid of or wanting to expand. Um so those types of discussions, testimony are gonna continue at the in the House. Any bill that appropriates money begins with the House rather than the Senate. Um the House finance chair, Representative Stewart, has set an internal deadline on that chamber side to get their budget um bill amended and voted on out of the house by April 9th. Again, that's not a statutory requirement. It's just their internal goal to get that over to the Senate and allow a lot of time for conversations. When it does get to the Senate, they'll they'll redo the whole process. Hearing testimony, um, there'll be opportunities for the public to weigh in, um, taking amendments to that bill. And then the two chambers will come together in what's called a conference committee as we get closer to the end of June, going through any any line items that they disagree on or aren't matching between their two bills, and ultimately the governor will sign um the budget by July 1st.

SPEAKER_01 10:16

July 1st. That is the ultimate deadline right there. July 1st. Which is in statute, right? Yes, yes. So, how can school board members get involved in this process? I mean, they have an opportunity here to be advocates for public education, right?

SPEAKER_00 10:30

Yeah, absolutely. We know in this, in the budget cycle in particular, that local advocacy, those local connections are really, really important. If you're a legislator looking through thousands and thousands of pages of budget appropriations, what you're asking yourself is what is important to my district? Right. What does my what do my constituents need out of all of these options and appropriations and pages? And so we're really encouraging school board members, superintendents, treasurers to make contact with their local representative and senator and explain your district situation. Explain how the funding formula impacts you, explain your financial situation and how changes to the formula would result in changes into the services you provide students. Again, it's just a really local decision. You're thinking about the students in the classroom and you want to convey to them the programs you have that are successful because of consistent funding streams, areas you need improvement and how investing in them would provide better outcomes to your students. Outside of the fair school formula funding formula, also there was a lot of great proposals and investments made by the governor. Um, for example, $30 million across the biennium for school bus safety grants, um, $10 million over the biennium for the Ohio Principal Apprenticeship Program that was established in the last GA, a handful of other services for driver's education or students needing um students needing vision screenings and glasses to help them learn. So if there are other programs that you're seeing being proposed in the budget beyond fair school funding, feel free to advocate for those as well and explain how those would impact your community.

SPEAKER_01 12:09

So what you're telling me is we're at the very, very beginning of a very lengthy process that's going to go, yes, into the the summer, end of June. Um you know, and it's it there's a lot to come, right? It's it's never the the governor's budget doesn't never end up always as it's introduced, correct?

SPEAKER_00 12:28

Right. And this week you saw the administration and every director that testified before the finance committee say this is a proposal and it's the first step in a negotiation process, like you said, that will continue through the summer. So that's important to think about as um you're hearing about the changes from each chamber that they could they could change from from day to day and it's not solidified until July 1st.

SPEAKER_01 12:51

So uh I know you in the legislative division and your team want to keep our members informed. Uh, where can our listeners find updates and resources on the budget process and K-12 funding in general?

SPEAKER_00 13:06

Yeah. Um, our team works really hard to make sure that board members have the most up-to-date information coming out of the statehouse. Right. So for starters, every Friday we post Facts in a flash, which gives you a hyper-fixated look at what happened at the state house from Monday to Friday of that week. Um, and like I said, as budget deliberations change day to day, that resource will be very helpful in keeping board members up to date on what changed. Um, beyond that, we knowing it's going to be a very busy season, have instituted monthly meetings of our legislative liaison network. Every board has the opportunity to appoint a legislative liaison. Um, and our intent is to have a monthly touch base where they can ask us questions and have face-to-face time with the team to just stay up to date on what they need to know about the budget. They also receive an additional publication entitled The Link that keeps them keeps them straight on where things landed that month at the state house that they can utilize. At the end of last year, we shared resources in partnership with the other state associations, so the the Buckeye Association of School Administrators as well as the Ohio Association of School Business Officials. Um, those included resources for districts to be able to explain their local financial story and talking points about the budget to make sure that you're having successful conversations with your legislators, hitting all the things that you need to hit. Um, once we receive that the bill budget language over the next few weeks, we'll send out some updated information on the local impacts of the executive budget. Um, and we'll continue to do calls to action and updated information like that to all of our members throughout the budget cycle. The last um thing I want to flag as far as staying up to date and resources to you is that OSBA plans an annual uh state legislative conference.

SPEAKER_01 14:57

That's coming up in March.

SPEAKER_00 14:58

Yes, and then that we do that in partnership with the Superintendent and Treasurers Association that March day is very crucial because it is right in the middle of those house budget deliberations. Um and so we encourage you all to register for that and and be there in Columbus that day with us to advocate for your school's needs, sit down, have lunch with your legislators, um, and again be able to just increase your FaceTime and have another opportunity to share your local story with decision makers.

SPEAKER_01 15:24

Sure. And if if our listeners uh want to know more about that, it's on our website, ohioschoolboards.org. Uh it's in March. It's the state legislative conference, and like you said, legislators are going to be there. That's where you can sit down and really have conversations with those legislators.

SPEAKER_00 15:39

Yeah, we'll we'll start the morning with some panels of legislators in the majority and minority leadership as well as the education chairs. And then, like you said, we'll have a luncheon in the afternoon for that face-to-face contact.

SPEAKER_01 15:50

One thing I wanted to touch on, and and you were talking about the legislative liaison. And I want to make sure our listeners understand this because the goal here is that someone is designated in all of our member districts to be a legislative liaison. It is to share information with others on the board and others in the school district, right?

SPEAKER_00 16:05

Mm-hmm. Yeah, yeah. The the legislative liaison is exactly that. They're someone who um has regular contact with your lobbyists and legislative team at OSBA and relays that information out to the rest of the board. We encourage the liaisons to ask for time on your monthly board meeting agenda to do that readout. Um, and again, we have those monthly meetings and additional publications to make sure that that person is well informed and able to answer any questions the rest of your board may have about what's going on at the Ohio State House.

SPEAKER_01 16:35

Well, I'm sure you're prepared to answer a lot of questions in the months ahead. I I really appreciate you coming on the podcast. Some good information today to just give our listeners, you know, an understanding of what's going to happen with the budget process. I know it's a very lengthy one, so really appreciate you coming on the podcast and explaining all that.

SPEAKER_00 16:52

Thanks.

SPEAKER_01 16:53

And thank you to our sponsor, Pappas and Associates. They're shaping policy with integrity.