Have we seen the "golden age" of school funding?
June 09, 2009
Last week, the Ohio Senate largely dismantled Gov. Strickland's Evidence-Based Model of school funding, which had called for new spending on public education of $2.7 billion over the next decade. The Senate has been roundly criticized by the governor, Democrats in the House and Senate and many in the state's educational establishment.
Following are two quotes from Democratic senators that capture their collective mood:
"I'm very concerned about the direction of education in Ohio in these historic times," said Sen. Teresa Fedor, of Toledo. "Education is an investment in our economy. We don't have a transformative education plan. It's not innovative. It's the status quo."
"We simply cannot go back to the status quo," said Rep. Dale Miller, of Cleveland, the ranking minority member of the Senate Finance & Financial Institutions Committee. "We need visionary and transformational improvement in the way that we fund schools in Ohio. We have been waiting 12 long years to correct many of the deficiencies highlighted in the DeRolph case."
The fact is, however, that we may very well come to see the last decade as a "golden age" for funding Ohio public schools. Consider figure 1 that shows per-pupil funding in the state rising, using inflation-adjusted dollars, by nearly 30 percent in the last decade. This does not include the billions spent by the state and local districts on new facilities for school since the late 1990s.
Figure 1: Inflation-adjusted Per-Pupil Revenue for K-12 Education in Ohio, 1981-2008
Source: Ohio Department of Education, Center for School Options & Finance, Simulation, Foundation & Analysis Unit, adjusted using the Bureau of Labor Statistics' inflation calculator
Frankly, Ohio has made real progress since the first DeRolph case in 1997 in how it funds its public schools and in the amount of money taxpayers dedicate to education.
Consider that Ohio spends about 4.2 percent of its taxable resources on K-12 education - ranking it fifth among all states. In its 2008 "Funding Gap" report, the nonpartisan Education Trust in Washington, D.C., cited Ohio as just one of ten states to successfully decrease the gaps between low - and high-poverty districts (see here). In its 2009 "Quality Counts" report, Education Week gave Ohio a B- for its school-finance system. The national average was C+. Ohio received a B+ in the equity category (see here).
Consider what this spending has meant for an urban district like Dayton (Figure 2), a district that serves about 90 percent economically disadvantaged students. In the last decade that district has seen per-pupil revenue increase by more than $3,000, using inflation adjusted dollars.
Figure 2: Inflation-adjusted Per-Pupil Revenue for Dayton Public Schools, 1998 to 2008
Source: Ohio Department of Education interactive Local Report Card, adjusted using the Bureau of Labor Statistics' inflation calculator
Now, Ohio's FY 2010-2011 $53.6 billion biennial budget faces an estimated shortfall of $2 billion to $3 billion. This shortfall would be dramatically worse if it weren't for the $5 billion influx in one-time federal stimulus dollars. The fiscal pain in the next biennial budget, and very likely the one after that, is apt to be even greater than it is now. We may very well see the efforts of the Senate to bump funding up by a quarter percent in the 2009-2010 school year and a half percent the following year as downright generous.
Consider the recent comments of Scott Pattison, executive director of the National Association of State Budget Officers, "There are so many issues that go way beyond the current downturn. This is an awful time for states fiscally, but they're even more worried about 2011, 2012, 2013, 2014" (see here).
According to Donald J. Boyd, senior fellow at the Nelson A. Rockefeller Institute of Government at the State University of New York, "State tax collections could take five years or more from when the recession began in 2007 to recover to pre-recession levels" (see here).
Ohio, unlike the federal government, can neither print money nor borrow vast sums from China to operate in deficit. The state has to have a balanced budget and for it to maintain the status quo in funding education, let alone to add billions more, it will have to raise taxes and/or see funding for other state-funded programs and services stay flat or decline in the coming years.
This is the painful reality that now confronts the conference committee. Things may very well get worse before they get better, and those clamoring for more money need to ask themselves where any new money will come from? If Ohio is serious about school reform it needs to move from providing just more money for more inputs to crafting policies that maximize school efficiency and effectiveness.