The Education Gadfly Weekly

As budget season winds down, lawmakers face the tall task of reconciling some vastly different proposals from the governor’s office, the House, and the Senate on a variety of issues in the budget bill, House Bill 166. The majority of these decisions will be worked out in conference committee, which must complete its work by June 30. Here’s a synopsis of four education policies that will most certainly be discussed and, from a policy perspective, our take on the best path forward.

Academic distress commissions

The debate about what to do with academic distress commissions (ADCs), the state’s mechanism for intervening in chronically underperforming school districts, has been a white-hot issue. The governor’s proposal—which originated with the Ohio Department of Education—and the House provisions appear quite different on the surface, but both would spell the end of ADCs as we know them. The Senate added another proposal to the mix via an amendment that was debated last week in its Education Committee, but it failed to make it into the Senate approved budget. That’s unfortunate because the Senate’s plan appears to strike the best balance between local control and accountability. It calls for instituting improvement efforts in schools after just one year of poor performance and adding greatly needed transparency to turnaround efforts.

Bottom line: Of the myriad ADC proposals, the amendment discussed by the Senate strikes the best balance between local autonomy and maintaining some state oversight if local efforts fall short. This amendment didn’t make the Senate’s final cut, but it could—and should—still be discussed in conference committee.

Graduation requirements

Like ADCs, graduation requirements have also been a hot topic in the Buckeye State. Despite the consistent media coverage, neither the executive nor House budget provisions identified a long-term solution. The Senate, on the other hand, has proposed a comprehensive set of graduation requirements that are objective, comparable, and valid. Eagle-eyed observers will recognize it as the proposal offered by Ohio Excels, the Alliance for High Quality Education, and Fordham—and recently praised by the editorial boards at the Columbus Dispatch and Akron Beacon Journal.

Bottom line: Given the strength of this proposal—and the need to avoid yet another round of contentious debate—lawmakers would be wise to move forward with the graduation requirements proposed by the Senate.

Quality charter school funding

In his budget, Governor DeWine proposed an increase of $30 million per year in state aid for high-performing charter schools. This funding is sorely needed because Ohio charters face significant funding shortfalls. The money would be targeted specifically at high-poverty charters, and schools would receive more funding per pupil for economically disadvantaged students. The House ratified the DeWine proposal. The Senate kept it, too, though it decreased the total funding allocation to $20 million. This significant cut would reduce the amount of per-pupil funding allocated to quality charters. Accepting the Senate reductions will force quality, high-poverty charters to continue to operate with large funding shortfalls, diminishing the likelihood that they replicate or expand.

Bottom line: Governor DeWine’s charter funding proposal is a major step forward in narrowing Ohio’s longstanding charter funding gaps and growing excellent new charter schools. His proposal should move forward as introduced.

Vouchers

Neither the governor’s budget nor the House’s provisions included significant changes to Ohio’s five voucher programs. The Senate, however, made important updates to EdChoice, which offers state-funded scholarships to students who attend low-performing schools, as well as low-income students. The biggest change would expand eligibility for income-based scholarships to all students entering grades K–12 beginning in 2020–21. Only students in grades K–5 were eligible during FY 2019, so the number of eligible students will essentially double. Since income-based EdChoice is funded via a line-item appropriation, the funding appropriated matters immensely. Fortunately, the Senate matched expanded eligibility with a $50 million increase for FY 2021. This means that thousands of low-income students could have access to school choice options that were previously unavailable.

Bottom line:  The conference committee should continue to build on Ohio’s long commitment to giving all low-income families access to quality choice options and maintain the Senate’s proposed EdChoice expansion.

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It’s always hard to predict what will make the final cut in Ohio’s complicated budget process. But as lawmakers hammer out compromises during upcoming conference committee meetings, we’re hopeful that none of these essential policies will end up on the cutting room floor. 

Covering a gamut of issues and spanning thousands of pages, the state budget legislation is apt to contain at least a few harebrained policy ideas. Among the head-scratchers in this year’s iteration are a rule allowing show-choir participation to count as a physical education class and an Oprah-like proposal that awards every school a “B” if the state misses report-card deadlines. While the Senate removed those peculiar provisions in its version of the budget bill, it added one of its own. The upper chamber slipped in an amendment guaranteeing that school districts—beginning in fiscal year 2022—receive at least as much state aid as nonpublic schools do under Ohio’s administrative costs and auxiliary services programs.

At first blush, the idea kind of makes sense. Shouldn’t districts be assured of receiving state funds that match or exceed those of nonpublic schools? But the proposal starts from a dubious premise and ignores essential features of Ohio’s school funding system, resulting in an illogical allocation of funds that benefits a small number of wealthy districts. Most critically, they seem to have forgotten that school districts, to receive state funding, must levy a minimum property tax that generates amounts far exceeding state contributions to nonpublic schools.

To examine the proposal, we first need to understand the nonpublic-school funding streams being referenced. Ohio has long appropriated modest sums to help these schools cover administrative expenses associated with following state regulations and purchase equipment or textbooks. According to the Legislative Service Commission, nonpublic schools currently receive $1,305 per pupil through these respective programs, a relatively nominal sum that does not come close to covering the full costs of educating private-school students.

The Senate idea is to use this amount as the funding “floor”—a minimum wage of sorts—under which no district’s state aid could fall. The vast majority of Ohio districts would be unaffected. The average amount of state foundation aid was $4,770 per pupil in FY 2018. Even among the wealthiest quartile of districts, which tend to receive less state assistance because they have more local capacity to raise funds, they receive on average $2,264 per student—still above the proposed floor. These amounts include Ohio’s core opportunity grant, various categorical funds, and transportation dollars, but exclude local taxpayer support, non-tax revenues, and federal funds.

So which districts would stand to benefit? Using the most recent FY 2019 data, the table below lists twenty-six districts that receive less than $1,305 per pupil. As you can see from the third column, titled “state foundation aid,” some of the districts receive very little in direct state support; for instance, Rocky River receives just $551 per student.

Before crying foul, legislators need to realize that this isn’t the end of the story. Under state law, districts must levy a minimum twenty mill (i.e., 2 percent) property tax to participate in the state funding program—all monies that are unavailable to nonpublic schools (or public charter schools). In districts with strong tax bases, this state-required tax generates large sums of money. Among these twenty-six, it raises mostly between $5,000 and $8,000 per student, as shown in the fourth column of table 1. Rocky River, for instance, raises $6,830 per student, and a few districts raise upwards of $10,000 per pupil.

Of course, as homeowners know, the taxes usually don’t stop there. Districts, subject to voter approval, can and do levy even higher property taxes. And they also receive some additional federal and non-tax funds. Thus, when looking at the overall funding picture—the data from the “total expenditure” column[1]—the twenty-six districts that appear to be shortchanged by the state are not exactly destitute. All but five spend more than the statewide average, and in some cases far above it. For instance, all in, Beachwood and Orange—wealthy suburban Cleveland districts—spend an astronomical $20,000 per student, and under the Senate proposal would see extra money flow their way.

Table 1: Districts qualifying for Senate proposed guarantee funds based on FY 2019 data, ranked by their amount of state foundation aid

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Sources: Ohio Department of Education, Traditional District Payment Reports (FY 2019, June 1 payment file); Ohio Department of Taxation; and Ohio Department of Education, District Profile Reports (FY 2018). * Denotes that the district’s state foundation aid is “capped,” meaning that the actual amounts provided by the state (displayed in this column) are less than the amounts prescribed by the formula.

In total, the Senate proposal would award an additional $47 million to these twenty-six mostly wealthy districts based on an erroneous concept of trying to achieve funding parity with nonpublic schools. To be sure, a few of these districts actually warrant further assistance. Fast-growing districts such as Olentangy and New Albany-Plain lose millions in state aid under the funding caps. But the solution to that problem is not to introduce yet another guarantee, especially one based on a false premise. Rather, legislators need to lift the cap—something that, in another budget provision, the Senate rightly makes an effort to do.

As the budget bill races to the finish line, policymakers would be smart to reconsider the wisdom of setting a misconstrued funding floor. It represents a poor understanding of the overall funding system, and inefficiently targets dollars to districts that need state aid the very least. Like government handouts for billionaires, sending a few extra dollars to high wealth districts like Beachwood, Indian Hill, and Upper Arlington simply makes no sense.   

Back in 2015, former Governor John Kasich encouraged the General Assembly to address the persistent failure of several school districts by strengthening academic distress commissions (ADCs), the state’s mechanism for intervening in chronically underperforming districts. Legislators obliged. The final product—House Bill 70—significantly lessened the power of local school boards and empowered ADC-appointed CEOs to lead improvement efforts.

The bill has been controversial since the moment it became law. For years, the three districts currently under ADC control—Youngstown, Lorain, and most recently East Cleveland—have starred in countless news stories about lawsuits, bruised egos, and drama. In the last few months, legislative action has only increased the media attention. Standalone bills in the House and Senate, as well as language in the state budget bill from both the governor’s office and the House, have been widely debated.

Into this mix, the Senate Education Committee recently offered an amendment that proposes an entirely new process for intervening in persistently low-performing districts. It establishes a statewide school transformation board that would be responsible for overseeing district turnaround efforts in the Buckeye State, as well as new timelines and requirements for districts that earn overall F grades on their state report cards going forward. Here are four reasons why this amendment makes sense.

1. It begins the intervention process after one year of an overall grade of F. Under current law, districts must receive three consecutive overall F’s before they face intervention. While such a slow moving timeline might work well for adults, the students these schools serve deserve a more urgent solution. By designating districts as “in need of improvement” and requiring them to both undergo a root cause analysis and create an improvement plan after just one year of poor performance, the law will ensure that serious efforts to improve student learning begin as soon as results indicate there is a problem.

2. Local school districts drive initial improvement efforts. One of the most common criticisms of ADCs is that they weaken local control. This amendment addresses those concerns by allowing struggling school districts to take the lead in crafting their own improvement plans. The planning process itself also encourages local participation by requiring the convening of community stakeholder groups. Both these changes should improve the operational dynamics of improvement efforts. Districts will also have the option—but won’t be required—to contract with a school improvement organization at the state’s expense. This provides them with access to both expertise and financial resources that they didn’t have before.

3. There is clear accountability for districts that fail to improve. The ADC revisions included in the House’s version of the budget (which mirror those in HB 154) would require persistently low-performing schools to implement locally created improvement plans indefinitely—without any consequences for a lack of improvement. That’s a clear abdication of the state’s responsibility to students and families. As Governor DeWine has noted previously, the state has a “moral obligation to help intervene on behalf of students stuck in failing schools.” This amendment is a far better option, as it would require districts that have failed to improve after five consecutive years—as well as districts that aren’t following their improvement plans with fidelity—to transition to the more rigorous intervention of a school improvement commission. It’s also worth noting that this amendment outlines clear exit criteria from “in need of improvement” status for districts that do successfully improve.

4. School improvement commissions are public entities that must engage with the stakeholders in a transparent way. Another common criticism of ADCs is that CEOs aren’t accountable to or transparent with the local community. This amendment addresses that complaint in a variety of ways. First and foremost, it creates a school improvement commission that is subject to public records, open meetings, and ethics laws. Commission members must be residents of the county where the district is located or an adjacent county. The amendment also requires the school improvement director—hired by the commission to operate the district—to appear before the district and give quarterly reports about the progress being made. Finally, the commission is required to conduct an annual performance evaluation of the director and submit it to the local school board. These provisions ensure that commission leaders are held accountable, and that the public is privy to all aspects of their work.

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The debate over ADCs has been contentious and troublesome, but the framework outlined in this amendment is a smart, well-thought out response to some of the loudest criticisms of House Bill 70. Even more important, it has the potential to bring meaningful change for students who attend persistently low-performing schools. Here’s hoping this makes it into the final version of the budget.

For prosperous families, the universe of K–12 school options is almost limitless. But the possibilities for poor and working-class families are far fewer, especially when it comes to private schools. Even for moderate-income families, paying tuition—while also paying taxes (including those to their school district), covering mortgage or rent, saving for college and retirement, and more—remains a heavy lift.

Helping more low- to mid-income Ohioans access private-school choice is why state lawmakers created the income-based EdChoice scholarship (often referred to as a voucher). With the backing of former Governor John Kasich, the program launched in fall 2013 starting with kindergarten eligibility and expanding one grade per year. In just six years, the program has grown to serve about 10,000 students. In recent years, parental demand has outstripped supply, leading to waitlists.

Governor Mike DeWine’s budget plan would continue the phase-in of income-based EdChoice by making sixth and seventh graders eligible over the next two years. The House retained that plan. But in one bold stroke, the Ohio Senate passed provisions in its version of the state budget that would make low-income students in all grades K–12 eligible for scholarships starting in 2020–21. To ensure the expansion is properly funded, the chamber added $50 million to the line-item appropriation dedicated to income-based EdChoice. Overall, the Senate changes could soon support 20,000 needy students, including thousands seeking to attend private high schools of their choice.

This is great news, but it doesn’t stop there.

The Senate proposed some further, albeit wonkier, refinements to Ohio’s scholarship programs, including its traditional EdChoice program, where eligibility hinges on the performance of district schools. All are geared toward improving access for families in need and include the following.

• Year-round application for traditional and income-based EdChoice scholarships: Under current statute, ODE must accept applications during two narrow windows in the spring and possibly summer before the next school year. While likely easing administrative burdens, these limited application periods are unfriendly to families. Not only do parents need to figure out the state’s complex eligibility rules, but they also need to know this bureaucratic calendar to apply on time. To alleviate the stress on families, the Senate proposes year-round application for EdChoice—something akin to rolling college admissions. Though it won’t guarantee that every applicant receives a scholarship—funds for income-based EdChoice may run out if interest is high—it would ensure that all families have a chance to apply, even at non-traditional times. For instance, this change could help a family who, after an unsuccessful first semester of school, decides to place their child in a private school.

• Better ensures that schools receive full scholarship amounts: Because the maximum scholarship amounts for EdChoice are low—just $4,650 for K–8 students—the max is likely to apply in the vast majority of cases. But in cases where tuition—which, by administrative rule, is the “sticker price” minus other sources of financial aid and discounts—is less than the maximum, the scholarship is worth that amount. As a result, the state avoids paying full amounts when deductions, borne of good-faith efforts to support families, reduce tuition to less than $4,650. The Senate would change this practice (likely applicable to financial aid only) and ensure that private schools don’t get shortchanged just because they extend other assistance to students.    

• Automatically increases the traditional EdChoice scholarship cap: Back in 2011, the traditional EdChoice program reached its statutorily driven cap that limited the number of scholarships available. Responding to strong parent demand, Ohio legislators lifted the cap so that no one would be left out. Even though that expanded cap of 60,000 scholarships has not yet been reached, the Senate now proposes proactive steps to ensure that such an artificial barrier won’t prevent students from receiving scholarships. Specifically, it adds provisions that automatically lift the cap by 5 percent when the number of applications in the previous year exceeds 90 percent of the cap.  

Ohio’s EdChoice scholarships have given thousands of hard-working families the opportunity to choose private schools that fit their values and meet their needs. The Senate proposals would further expand and strengthen these programs, making the choices of low-income families more similar to those of their higher-income counterparts. If, over the next week, their legislative colleagues ratify these changes, all Ohio families will at last be empowered to choose schools they most prefer.