The Ohio House’s education budget gives something for everyone

Earlier this week, the Ohio House of Representatives passed its version of the state budget bill for FYs 2024 and 2025. The House legislation follows up on Governor DeWine’s budget introduced in February. Included in this massive legislation are hundreds of provisions affecting K–12 education. How did the lower chamber do?

First things first, House lawmakers should be commended for leaving intact most of the governor’s key education initiatives. These include a significant funding boost for high-quality charter schools, a requirement that schools use curricula aligned to the science of reading, and additional dollars for career-and-technical education.

House lawmakers also put forward their own ideas. Chief among them is more money for schools—and lots of it. As the table below indicates, the House tops the governor’s K–12 education budget by some $700 million by 2025. And compared to current spending levels, the House plan would hand out a whopping $1.6 billion more to schools by the second half of the biennium, a 14 percent increase in state education spending. With enrollment declining statewide, the percentage increase in per-pupil funding may turn out to be even larger.

Table 1: State expenditures on K–12 education—current versus proposed

As Table 1 shows, an increase in “foundation” dollars—the basic aid allocated to districts and public charter schools via the state funding formula—drives the funding surge. This reflects the House’s decision to use more current salary and benefits data to compute base funding amounts. In the current biennium and continuing under the governor’s plan, the state relies on 2018 data to calculate base funding. But under pressure from school groups, House lawmakers updated the formula to 2022 data. With rising salaries during this period, the update generates higher base funding amounts. The average district’s base funding is currently $7,352 per pupil; that would rise to a projected $8,241 per pupil under the House plan. The higher base thus yields the greater foundation funding expenditure.

This formula update would generally benefit schools across the board, be they traditional district, charter, or even private, as EdChoice scholarship values escalate when public schools’ base amounts rise. Schools will undoubtedly welcome the additional dollars, and it may ensure a “softer landing” as the massive influx of federal Covid-relief funds run out. But the significant costs of maintaining and updating the state’s new formula are becoming all the more clear. Can lawmakers sustain such a rapid escalation of spending on K–12 education over the long haul? What happens when state coffers aren’t quite as full?

Although the House turned down requests from school groups to fully phase in the funding increases called for under the new formula,[1] it included substantial increases to teacher pay rates via the state’s minimum salary schedule. If this provision passes, educator salaries will rise, adding more upward pressure to base costs under the formula and potentially baking in further increases in state education spending down the road.

Beyond the main funding formula, a few other matters of dollars and cents are worth noting (the last three are part of the “other education items” in Table 1).

• Property tax reimbursements: This item reimburses traditional districts (but not charters) for lost local revenue due to property tax rollbacks. The funding remains mostly flat in the governor and House plans, perhaps a relief to some who were concerned about separate House legislation introduced this year that might’ve resulted in cuts to these reimbursements.

• Transportation: Funding for transportation significantly rises in both the governor and House budget plans. This likely reflects the continuing phase in of the new formula and will be welcome news to districts struggling to adequately provide students with yellow bus service.

• School resource officers: The governor proposed nearly $200 million per year in new state outlays to support school resource officers (SROs). The House eliminated those funds and probably used them to cover some of the increase in foundation funding. While SROs may or may not be a good use of state dollars, this move continues to illustrate the challenge of launching new education initiatives with such an expensive formula devouring the budget. In the last budget cycle, Governor DeWine’s Student Wellness and Success Fund fell prey as legislators sought to pay down the new formula’s expense.

• Literacy funding: The governor’s plan included $168 million in new spending over the next biennium to help implement scientifically based reading instruction in Ohio schools. The House cut those funds to $105 million, again in a likely attempt to cover formula costs.

• Independent STEM schools: As mentioned earlier, the House approved the governor’s increase to the high-quality charter fund. But it also added provisions allowing independent (non-district) STEM schools to be eligible for the supplemental aid. This makes sense, as STEMs—there are seven of them—are funded similarly to charters and also struggle with inequitable funding.

Lastly, the House also made a few policy proposals that warrant mention. Two are steps forward, but one is giant step back. Starting on the down note, the House would abandon the state’s third grade retention requirement. We at Fordham have already discussed (and denounced) this ill-advised proposal at length. The short version: Removing the requirement would put children struggling to read at grave risk of long-term academic failure, with all of its attendant consequences.

On the positive side, however, the House proposed the following:

• Expanded eligibility for the EdChoice scholarship program. Under current law, students from households at or below 250 percent of the federal poverty level are eligible for private-school scholarships. The governor proposed expanding the income limit to 400 percent. The House one-upped that by raising the threshold to 450 percent. Under the chamber’s plan, a family of four earning less than $135,000 per year would be eligible for the assistance. For a two-working-parents household, this comes out to a modest average salary of $67,500. The House plan would open private-school options to more middle-income families in Ohio, while stopping short of subsidizing the state’s most affluent families.

• Stronger oversight of teacher preparation programs in reading. As noted at the outset of this piece, Governor DeWine has proposed major reforms that would ensure all Ohio schools are implementing scientifically-based reading practices. The House, to its credit, bolsters this initiative in one important way: stronger teacher preparation. Specifically, the chamber proposes a review and auditing process, led by the Ohio Department of Higher Education (ODHE), that would ensure prep programs align teacher training to the science of reading. Importantly, the House also requires ODHE to revoke programs’ approval if they fail to align training to the reading science.

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Overall, the House budget is a mixed bag. For school-funding aficionados, shoveling more money to schools will be something to cheer about. For those concerned about fiscal responsibility, it may be more cause for concern. The policy proposals out of the House are also hit and miss. Lawmakers took steps in the right direction but also made a terrible blunder with third-grade retention. Of course, the budget bill doesn’t stop in the House. The next stop is the Senate, and in a follow-up piece, I’ll discuss the items that the upper chamber should tackle.