Lima, Ohio, recently named the nation’s ninth saddest city, received some cheer earlier this week when Governor John Kasich strode into town for his annual state of the state address. Among the myriad of topics the governor touched upon was K-12 education reform, and the residents of Lima—and many more across the Buckeye State—should be heartened by the education reforms he proposes.

Among the boldest and most exciting reforms the governor proposes, is his overhaul of the state’s school funding formula. The funding proposal the governor has laid forth levels the playing field for all Ohio students. It ensures that youngsters who attend a public school system with less local wealth—measured by property value and income—receive more state aid. For example, according to the governor’s preliminary FY 2014 estimates, the property and income-rich Upper Arlington schools near Columbus would receive no state aid for its regular students. (It would receive aid for its special education, economically disadvantaged, gifted, and English language learner students.) The state assumes, correctly, that Upper Arlington’s local residents can and will raise sufficient revenue to educate their children. This is sensible public finance—furnishing limited state funds to Upper Arlington is like giving Donald Trump social security. They simply don’t need it.

Meanwhile, the governor’s proposal provides generous state aid to students who reside in poorer, hard-scrabble communities such as Lima. Lima doesn’t have five-bedroom homes that generate large amounts of school tax revenue, and additionally, its residents don't have surplus income lying around to pay higher school taxes. Thus, for the 5,000 plus students who attend a charter or district school in Lima, they’ll receive $5,200 in state aid—what the governor terms core and targeted assistance. (Core assistance is based on local property values; targeted assistance on income.) On top of that, special education, economically disadvantaged, gifted, and English language learner students will receive additional funds, just like the students in Upper Arlington. Taking all these elements together, the average per-pupil funding for a Lima public school student is $6,523, compared with $544 for Upper Arlington.

SOURCE: Achievement Everywhere Preliminary Estimates FY 2014 (by district). Per-pupil calculations by author.

True, under Ohio’s current funding formula, wealthy schools already receive less state aid than poor schools. But, the governor’s formula is clearer and simpler to understand than the state’s current, muddled distribution formula. Further, by accounting for local property values and income, the governor’s formula is a fairer method of distribution: Adding income into the mix rightly recognizes that the state must consider both property wealth (the revenue a local levy can generate) and also a community’s ability and willingness to pay higher taxes (and as such, pass a local levy). The governor’s funding proposal is, therefore, fair, simple, and significant step in the right direction—a proposal that should cheer up even Ohio’s saddest city.

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