A short article published this week in the Columbus Dispatch makes serious reporting mistakes that leave readers with a distorted view of school finance. According to the article, a Columbus citizen millage panel recently discussed a state policy known as the funding “cap.” Briefly speaking, this policy limits the year-to-year growth in state revenue for any particular school district. As we’ve stated in the past, funding caps are poor public policy because they shortchange districts of revenue they ought to receive under their funding formulae. State lawmakers should kill the cap; it circumvents the state’s own formula, it’s unfair to districts on the cap, and it ultimately shortchanges kids.
The article would’ve been right to stop there. Yet somehow charter schools got pulled into the discussion, and that is where the coverage went way off track. The Dispatch writes:
But the formula for one class of school [i.e., Columbus district schools] is now capped, while the other [Columbus charters] isn’t.…But today Columbus charters get $142.4 million from the state to teach 18,000 students, while the district is left with $154.4 million to teach the remaining 52,000 kids, many of whom rank among the poorest in the state.
The Dispatch seems to have forgotten that Ohio’s school districts are financed in fundamentally different ways than charters. Districts are part of a hybrid funding system—raising revenue via state and local tax sources—while charters depend on state revenue alone. Any discussion that juxtaposes district and charter funding must keep that basic difference (something that charter critics like to ignore as well) in mind. Let’s take a closer look at the problems with these statements and provide a fuller picture.
It is true that Ohio charters are not subject to state funding caps. But they are also not funded according to the district funding formula. To allocate state revenue to Ohio districts, legislators have created a very intricate funding formula, part of which includes adjustments that account for districts’ wealth (their local tax bases). These wealth-related factors, in addition to changes in enrollment, can determine whether a district is capped. A district with a declining tax base would receive more state aid, all else equal, but that increase in aid might be capped.
Charters, however, don’t have the authority to levy taxes; as such, they receive state funding on a per-student basis with no adjustments for local wealth. Inasmuch as caps are unfair to districts, establishing a cap on charters would be even more inappropriate. A cap could directly deny charters funding when they enroll additional students. Moreover, since they don’t have local funding to fall back on, it would put them at an even greater financial disadvantage.
Misunderstanding the state funding formula, for districts and charters alike, could be considered excusable. (It’s complicated!) But the second statement, comparing the revenue received by Columbus charters ($142 million) to that received by the Columbus City Schools ($154 million), is unpardonable. It misleads readers into believing that charters receive much more revenue per pupil—living high on the hog—than the district ($7,900 to $2,900 when you do the math). But these figures leave out the massive amount of local tax revenue that the district raises—and charters do not. Hence, the assertion wildly underreports the amount of public funding received by Columbus City Schools.
Let’s set the record straight: According to the district’s financial statements, Columbus City Schools raised over $370 million in local property tax revenue in the 2015 fiscal year—hundreds of millions of dollars that go to educate district pupils. In fact, according to the state’s Cupp Reports (one of the best sources for financial data) the district received more than $15,000 per student in state and local funding combined in 2014–15. This amount far exceeds what a typical Columbus charter school receives in public aid; it is simply inaccurate to suggest that charters receive more generous taxpayer funding than their nearest district.
In sum, here are two simple ideas to improve our discourse around school funding. First, let’s acknowledge the fundamental differences in how charters and districts are financed. Second, let’s focus on the overall taxpayer dollars that are being used to support the learning of Ohio’s school children. Getting the fundamentals right is a necessary first step before tackling the more complicated funding issues.
