Like much of Gov. Mike DeWine’s budget, his K-12 proposals are underwhelming.No New Base Funding
Schools see no new change to the school funding formula in the DeWine proposal, as he has left the heavy lifting to State Reps. Cupp and Patterson, who next week will release the most highly-anticipated school funding reform plan in a decade.As we prepare for next week’s proposal, it’s important to have some historical context. When adjusted for inflation, Gov. Kasich’s last budget left schools about $900 million short of what they received in the recession budget 10 years ago. If the state were to base school funding on the actual cost of providing a high-quality education to students, Ohio would currently be about $1.7 billion short, according to figures from the last serious attempt to reform its school funding formula. Thus, any serious new funding formula will require significant new revenue. $300 million a year more for wraparound services
This money would bring more mental health and other services to poor students, providing every district with at least $25,000, even if the district has only a handful of poor students, up to about $250 a student, which could make a real difference. There would be cause for concern if this becomes a substitute for adequately funding schools. Our students deserve the investment the state simply hasn’t made for 30 years. And every kid deserves that commitment.Even with $300 million more in the 2020-2021 school year, adjusted for inflation, districts would remain several hundred million dollars short of what they received a decade ago during the Great Recession.$30 million for high performing charter schools
While Ohio absolutely should begin to differentiate between low and high-performing charter schools, creating a market based on quality rather than enrollment, DeWine is doing so by tapping into the state’s lottery fund, forcing cuts in lottery money headed to traditional public districts. At the end of this two-year budget, nearly $50 million will be headed to charters from the Lottery, which was supposed to go strictly to school districts. We need to be creating a charter school market that rewards success. But taking it out of funds voters created for school districts seems counterproductive. There is already $16.6 million in the current state budget for high-performing charters to receive capital funding. Not even 25 percent of that amount has been spent because so few charters meet the criteria. Adding $30 million which is limited to the few high performing schools operated in Ohio in hope that more will materialize prevents that money from going to kids in our traditional public school districts.Another big increase for the voucher program
DeWine continues the misguided increases to the EdChoice, income-based voucher in this budget. EdChoice has actually been shown to harm student achievement. Pouring $24 million more into this program that has hurt the kids who take the vouchers makes little sense. We also need to review amounts going into the other voucher programs when the final budget documents are released to see how much total revenue meant for school districts will be going instead to private, mostly religious schools.Preschool flat funded
This was actually shocking. Ohio’s struggles with early childhood education have been stunning, especially given how even conservative states like Oklahoma have created Universal Pre-K. And while there has been a lot of talk about beefing up our state’s early childhood program, this budget is not that. Significantly more charter school oversight
DeWine increased the budget for ODE’s charter oversight office from $2.5 million to $7 million. That’s good, but still not enough to oversee an $889 million a year industry with a track record of fraud and underperformance. Workforce Development
Much of DeWine’s workforce development agenda is funded within the K-12 budget, with new resources to help students achieve more industry-recognized credentials. Between 2014 and 2018, the percentage of Ohio students leaving high school with an industry-recognized credential grew from about 4 to just over 6 percent. While that’s a significant increase, it’s still far short of what our students should be achieving. We need more details to understand whether the new money in this budget would be paired with programs to motivate more students to seek these credentials during high school.Conclusion
Overall, this falls short of the “investment budget” that DeWine promised. There are some small benefits and a few districts will see significant increases to address the real challenges of their most needy students. But it’s neither enough money to overcome the needs of poor students in every district nor is it enough to overcome the last decade of Kasich budget cuts. All while charters more than double their money from lottery funds, vouchers continue to increase, and early childhood education is all but ignored.
House Poised To Begin Budget Hearings As Reactions To Spending Plan ContinueAdministration officials on Tuesday will begin making their case for Gov. Mike DeWine‘s state operating budget proposal as lawmakers and stakeholders continue digesting the details of the $150.4 billion spending plan.Gov. DeWine on Friday unveiled his executive budget proposal and the associated “Blue Book” but legislative language has yet to be released. (See Gongwer Ohio Report, March 15, 2019)
The House Finance Committee will kick off its review of the proposal at 9 a.m. Tuesday with its first informal hearing. There lawmakers will hear testimony from Office of Budget and Management Director Kim Murnieks, Legislative Service Commission Director Mark Flanders, and Tax Commissioner Jeff McClain.
Deliberations will continue Wednesday and Thursday. Over those two days, the committee is scheduled to field remarks from leaders of the departments of Medicaid, Job and Family Services, Mental Health and Addiction Services, Developmental Disabilities, Aging, Health, Education, Higher Education, Rehabilitation and Corrections, and Youth Services.
During a media call Monday organized by Innovation Ohio, some stakeholder groups applauded Mr. DeWine’s goal to invest more in areas like children’s services. (See Gongwer Ohio Report, March 15, 2019)
But that sentiment was balanced by concerns that relying solely on state economic growth to fund that investment might be a risky prospect. Ms. Murnieks has said the budget is based on “slowed but steady continued growth” with state revenues projected to rise by 3.9% in the first year and 1.7% in the second.
“The projection in the blue book itself is that the U.S. GDP is going to slow to 2.4% this year and 2% next year but we’re still projecting almost 4% growth,” said Terra Goodnight, director of policy for Innovation Ohio. “It does really make you wonder if we’re building a house of cards here.”
Nick Bates, outreach director of One Ohio Now, similarly expressed concern, opining that the budget’s goals can be realized with the state’s current revenue.
“We know investing in the fundamentals – reliable infrastructure, strong schools, healthy communities – are the building blocks for a strong Ohio. Gov. DeWine seems to recognize that,” Mr. Bates said. “But without the new revenue we will continue to fall behind other states and not be able to solve Ohio’s most pressing concerns.”
The budget plan has some stark contrasts with those of the Kasich Administration, according to policy groups. For one, it lacks much of the tax shifting policy proposals favored by the prior administration.
“The Kasich budgets always included some bigger tax policy – frequently it was tax cuts, it was also proposals to close tax breaks and sometimes you’d see a narrowing of the sales tax base or a broadening of the sales tax base,” said Wendy Patton, senior project director for Policy Matters Ohio. “In this budget we see one major tax break – the Opportunity Zone tax break – but we do not see other tax policies.”
The proposal also avoids major changes to K-12 education funding – a seeming acknowledgement from the administration that any changes they put forth would have potentially been jettisoned by lawmakers in favor of the House’s already in-the-works plan to reach a more equitable funding formula. That effort is being led by Rep. Bob Cupp (R-Lima) and Rep. John Patterson (D-Jefferson).
“(Kasich) was very aggressive on education policy,” said Stephen Dyer, education policy fellow for Innovation Ohio. “In this one it seems Gov. DeWine has ceded the heavy lift to the Ohio House, to Reps. Cupp and Patterson, which is certainly putting a lot of pressure on them.”
Tracy Najera, executive director of the Children’s Defense Fund Ohio, said she is “very encouraged” by the budget’s focus on child issues, such as expanding infant mortality resources and home visitation efforts.
Hannah Halbert, project director for Policy Matters Ohio, said she wants more information on the budget’s proposal for providing 10,000 microdegrees for in-demand fields. It’s one of several subject areas covered in the budget that warrant more details, she said.
“There seems to be a lot of workforce development lingo but not a lot of details,” Ms. Halbert said. “Microcredentials are a priority, industry sector partnerships are a priority, and both could be great, or both could be terrible. It depends on what’s actually behind those terms.”
But without new revenue to back up Gov. DeWine’s proposals, lawmakers could find themselves forced to revisit the budget somewhere down the line, Ms. Goodnight said.
Mr. Bates argued the budget plan does too little to prepare for the potential of a recession in the years to come.
“At some point there will be a recession,” Mr. Bates said. “That’s when we need to make sure we have good revenue policy, equitable tax policy in place so we can make the investments that we need.”
Volume 88, Report 52, Article 1
Last Friday we saw the first outlines of Gov. DeWine’s proposed two-year operating budget, which contains over $70 billion in annual spending authority for all of state government (except Transportation, which is handled in a separate budget. At first glance, it appears to offer small, but needed spending increases while failing to make significant investments in the things that suffered the most during the Kasich years; K-12 education, Higher Education and support for Ohio counties, cities, townships and villages through the Local Government Fund.
The lack of meaningful investment is not surprising given that it is funded in the DeWine proposal exclusively through growth in the larger economy, and not with any new sources of revenue. No effort was made to close the unproven $1 billion LLC loophole, to apply a reasonable tax to oil and gas drilling or to restore the top tax rates on Ohio’s highest-earning individuals. The DeWine budget does make commitments to spend more in certain, targeted areas, including children’s services, opioid treatment and enforcement, restoration efforts for Lake Erie, in-school services for at-risk youth, kinship care programs and home visits for new moms and babies. In the absence of new revenue, the Medicaid program is tapped to pay for many of these priorities, raising questions about its impact on the traditional Medicaid population.
Of the budget priorities we outlined last week, we are pleased to see the proposal includes wraparound services for school children, a small increase in child care, the preservation of the Medicaid expansion (paired with federal approval of Ohio’s proposed work requirements make this one bittersweet), a slight increase in funding for Ohio College Opportunity Grants . But, overall, the budget fell short of our expectations because it, unlike the Governor’s proposal for dealing with the state’s transportation funding shortfall, failed to fully solve the state’s problems created by years of tax cutting and underinvestment.
Columbus, OH – Today, Innovation Ohio president Janetta King issued the following statement in response to Gov. DeWine’s budget proposal:
“Gov. DeWine has talked a lot about investing in Ohio’s future. But for an ‘investment’ budget, this is very underwhelming. Gov. DeWine has assumed office following eight years of massive tax giveaways to the rich – leaving very little left for everyday Ohioans. Without a real discussion of new revenue, this budget cannot be viewed as a serious investment in our state.”
Founded in 2011, Innovation Ohio is a nonpartisan, nonprofit think tank that blends policy research and advocacy to fight for working families in Ohio.
Capitol Square is eagerly awaiting Friday’s statutory deadline for the introduction of the incoming Governor’s first two-year biennial budget plan. While a bill itself is unlikely to surface until next week, we will get a look at the “blue book,” a 800+ page document outlining forecasts for state tax revenue based on the DeWIne Administration’s economic forecasts and proposed changes to change tax policy, along with a line-by-line spending plan for each agency in state government. In total, the budget authorizes the spending of nearly $140 billion in state and federal funds over the two years that begin July 1.
The budget rollout typically happens with a release of documents on the websites of the Office of Budget and Management and the Governor’s Office, followed by a lengthy press briefing and Q&A by the Governor’s budget director. Committee hearings will begin early next week in the House Finance committee and will be the main focus of statehouse lobbyists and advocates for the next several weeks.
Monday
1:30 pm – Senate Transportation, Commerce & Workforce – Informal hearing on HB62 (2020-21 Transportation Budget) in the Senate Finance Hearing Room.
Tuesday
9:00 am – Senate Transportation, Commerce & Workforce – Informal hearing on HB62 (2020-21 Transportation Budget) in the Senate Finance Hearing Room.
10:15 am – Senate Government Oversight & Reform – 3rd hearing, all testimony, possible amendments and vote on SB22, to reduce the minimum number of precinct election officials required at a mutlti-precinct polling location in Senate South Hearing Room.
11:00 am – House Health – First hearing with sponsor testimony on HB90, which would require the Ohio Department of Health to develop a website, public posters and other communications material to inform the public of the “humanity of the unborn child and to create an abortion-free society” and recommend to ODE materials for inclusion in a school curriculum on the subject. In Statehouse Room 116.
3:00 pm – House Ways & Means – 2nd hearing featuring proponent testimony on HB19, which would exempt the purchase of tampons and other feminine hygiene products from the sales tax. In Statehouse Room 116.
3:30 pm – Senate Health, Human Services & Medicaid – Fifth hearing, possible amendments and vote on SB23, to ban abortion at the point of a detectable heartbeat. The committee will also hear testimony and vote on a non-binding resolution to urge Congress to enact S. 311, anti-choice legislation currently pending in Congress.
3:30 pm – House Civil Justice – First hearing with sponsor testimony on HB88, which would prevent public colleges and universities from creating “free speech zones” or to limit political and other controversial speech to certain areas of campus, and subject them to civil liability.
Wednesday
9:00 am – Senate Transportation, Commerce & Workforce – First hearing on HB62 (2020-21 Transportation Budget) in the Senate Finance Hearing Room.
9:15 am – Senate Judiciary – First hearing with sponsor testimony on SB11, the Ohio Fairness Act, to prohibit discrimination on the basis of sexual orientation or gender identity. In the Senate North Hearing Room. The committee will also hear testimony from the sponsors of SB18, to prohibit incarcerated woman or girls who are pregnant from being restrained/shackled or placed in solitary confinement during their pregnancy. In the Senate North Hearing Room.
3:00 pm (or after session) – House State & Local Government – First hearing with sponsor testimony on HB92, to require voter approval for any increase in the rate of a county sales tax. In Statehouse Room 122.
Thursday
9:00 am – Senate Transportation, Commerce & Workforce – Second hearing on HB62 (2020-21 Transportation Budget) in the Senate Finance Hearing Room.
Find details about all committee hearings:
Senate – Wednesday, 1:30pm (livestream). The Senate is likely to take up Senate Bill 23, the 6-week abortion ban, and SR41, the above-noted non-binding resolution calling on Congress to pass anti-abortion legislation. Other bills that could be on the floor for a Wednesday vote include SB10 (theft in office), SB22 (precinct election officials) and SB4 (school facilities).
House – Wednesday, 1pm (livestream). The House may take up some license plate and bridge naming bills, as well as HB50, a measure to preserve all intellectual property rights to charter county hospitals where they were developed.
Senate session agendas are set by the Senate Rules and Reference Committee and House session agendas are set by the House Rules and Reference Committee. Check those committee websites before the start of session for a final Rules agenda for each chamber.
Budget Update
Last week, the DeWine administration began to unveil its budget plans. So far, the Governor has announced his two-year budget will include:
Additional funding for child protective services, programs that serve multi-system youth, the launch of a program for kids of parents with substance use disorder and the expansion of kinship care programs.
Additional resources for evidence-based home visitation aimed at stemming Ohio’s infant mortality crisis
More announcements are expected this week.
What we’ve seen so far tracks closely with the Governor’s campaign promises and his State of the State address. While we support additional needed investment, we worry the proposal will not go far enough to address Ohio’s most critical needs, particularly if we intend to increase high school and college completion rates to meet the state’s future employment needs.
We will share our budget priorities later this week, highlighting over a dozen programs and priorities we hope to see reflected in the state budget, along with suggestions for how to pay for it. Sign up for our budget updates to stay up to date on what’s happening as the budget moves through the Statehouse.
As always, we will be sharing updates on Twitter using the #OHLeg hashtag for legislation, #OHBudget for budget updates and #OHGov for executive actions. Follow us to stay up-to-date on what’s happening at the Statehouse.
On Tuesday morning, three different bills aimed at creating new barriers to legal abortion will be heard in legislative committees. At 9:30 am, the Senate Health Committee will hold its first hearing on SB27, a proposal from Senator Joe Uecker to require the burial or cremation of aborted (but not miscarried) fetal remains.
The committee will also take testimony from opponents of SB23, the 6-week abortion ban, back this week for its third hearing, but not for long. The committee will recess for session and to allow members to attend other hearings, then it will resume at 4pm to hear testimony from witnesses opposed to the bill. The committee hearings will be held in the Senate South Hearing Room.
Meanwhile, the House Health Committee will be hearing testimony on its own version of the 6-week abortion ban. Bill Sponsors Reps Keller and Hood will speak to HB68 in its first hearing. The hearing will be held in Statehouse Room 116.
Wednesday Is Bring Your Guns To The Statehouse Day (J/K that’s illegal)
On Wednesday, a planned morning “debate” on gun ownership has been scrapped by the chair of the House Federalism Committee, but the day still has much in store for gun rights advocates.
At 1pm, the full House is expected to vote on a bill (HB86) to fix a drafting error in the lame duck gun legislation that some argue may have made certain popular guns illegal. The problematic legislation has not yet taken effect and is not being enforced, but that hasn’t stopped lawmakers from moving fast to fix the perceived problem.
After session, members of the House State and Local Government Committee will hear testimony from State Rep Dave Greenspan whose HB49 would make a concealed carry permit a valid form of ID for purposes of voting. It’s worth noting that a U.S. Passport or Student ID from a State College or University are not legal for voting purposes, thanks to an Ohio law requiring it to display a home address — even one that is not current. The hearing will take place at 3pm in Statehouse Room 122.
9 am – House Finance Committee – Fifth hearing on HB62 (2020-21 Transportation Budget) featuring all testimony in Statehouse Room 313.
9:30 am – Senate Health Committee – Third hearing for opponent testimony on SB23 (abortion ban) and first hearing for sponsor testimony on SB27 (fetal tissue disposal) in Senate South Hearing Room. The Committee will recess after morning testimony and reconvene to hear additional testimony on SB23 at 4pm.
10 am – Senate Government Oversight – Second hearing and possible vote on SB30 (State Commission For The Women’s Suffrage Centennial). The committee will also hear proponent testimony on SB1 (regulation), a proposal to force the elimination of various state regulations, and hear testimony and vote on SB53 (guns),the Senate version of legislation to fix the lame duck drafting error making certain guns illegal to own. The hearing will be held in the Senate Finance Hearing Room.
11 am – House Health Committee – First hearing for sponsor testimony on HB68 (abortion ban) and HB40 (STD testing) in Statehouse Room 116.
3:15 pm – Senate Transportation, Commerce and Workforce Committee– Presentations from ODOT and the Department of Public Safety on transportation infrastructure in anticipation of Senate consideration of the Transportation budget. The hearing will be held in Senate South Hearing Room.
Wednesday
9 am – House Finance Committee – Sixth hearing on HB62 (2020-21 Transportation Budget) featuring all testimony in Statehouse Room 313.
10:30 am – Senate Ways & Means Committee – Second hearings featuring proponent testimony on SB8 (opportunity zones) and SB26 (educator tax deduction), and first hearing featuring sponsor testimony on SB37 (motion picture tax credit) in Senate North Hearing Room.
1:00 pm – Senate Transportation, Commerce and Workforce Committee – Presentations from the Public Works Commission, Development Services Agency, Turnpike Commission and public testimony on transportation infrastructure. The hearing will be held in Senate Finance Hearing Room.
3:00 pm (or after Session) – House State and Local Government Committee – First hearing featuring sponsor testimony on HB49 (voter ID) in Statehouse Room 122.
Note: a previously scheduled hearing on HB78 (prevailing wage) in House Commerce and Labor Committee has been cancelled. The committee will hear sponsor testimony on HCR6 (Lordstown plant) and HB21 (unemployment compensation) in room 114 at 3pm.
Last week, the DeWine administration introduced its long-awaited Transportation Budget as a substitute version of House Bill 62. Included in the proposal:
An 18-cent per gallon gas tax increase, effective July 1, adjusted annually for inflation
Large increases in spending on highway maintenance and construction and corresponding reduction in new borrowing.
Flat-funding for airports and rail transportation.
Small increase in federal funds for certain, limited transit uses (dedicated high-occupancy lanes and park and ride facilities are among the uses), with a continuation of language stating that gas taxes may not be spent for transit operations or bus purchases.
A nearly 10-percent increase in funding for the Highway Patrol
Hearings on the Transportation Budget (HB62) continue in the House Finance Committee this week. All hearings of the committee are streamed live online at ohiochannel.org. Amendments to the bill are due to the Chair by Thursday at noon.
Simultaneous to House consideration of the measure, the Senate Transportation committee is taking testimony on the state’s transportation infrastructure. See committee hearings of note (above) for details.
The main operating budget, a vast outline of over $70+ billion in state spending and policy changes for fiscal years 2020-21, is expected to be introduced by the DeWine administration on or before March 15.
Last week, the floodgates opened as lawmakers in both the Ohio House and Senate introduced a total of 118 bills for consideration by the 133rd General Assembly.
Some of the proposals that we’ll be watching in the coming months include:House Bill 19 – Menstrual Hygiene Products (Antani, Kelly) – Exempts tampons and other menstrual hygiene products from the sales and use tax.
House Bill 34 – Minimum Wage (Kelly) – Increases the state’s minimum wage to be $15 per hour by 2023. Also allows for municipalities, townships, and counties to establish higher minimum wage requirements.
House Bill 49 – Voter ID (Greenspan) – To authorize the use of a concealed firearms permit as an approved photo identification for voting purposes.
House Bill 54 – Local Government Fund (Cera, Rogers) – To restore revenue sharing between the state and its counties, cities, townships and villages via the Local Government Fund to its pre-2011 levels.
House Bill 62 – Transportation Budget (Oelslager) – To approve expenditures of gas tax revenue for fiscal years 2020 and 2021. A placeholder bill today, the legislation will soon be amended to include the DeWine Administration’s proposals to address what they are calling a transportation funding “crisis.”
House Bill 68 (Hood, Keller) / Senate Bill 23 (Roegner) – Abortion Ban – Bans abortion at the point of a detectable fetal heartbeat. The bill would also criminalize doctors who perform an abortion after this point with a fifth degree felony, with the ability for the State Medical Board to suspend a medical license without a hearing. Many believe this measure would result in the closure of all remaining clinics in Ohio, effectively ending legal abortion in the state.
Senate Bill 3 – Drug Sentencing (Eklund, O’Brien) – To revise Ohio’s drug sentencing laws.
Senate Bill 11 – Ohio Fairness Act (Antonio) – Prohibits discrimination on the basis of sexual orientation or gender identity or expression, meaning that it would add LGBTQ people to the laws that make discrimination illegal in Ohio. The bill would not affect existing religious exemptions that are currently present in Ohio’s law.
Senate Bill 19 – Extreme Risk Protection Order (Williams) – To allow family, household members and law enforcement officers to obtain a court order temporarily restricting a person from having access to firearms if that person is deemed a danger to themselves or others.
Senate Bill 27 – Fetal Remains (Uecker) – To require the burial or cremation of fetal remains resulting from a surgical abortion procedure.
Senate Bill 30 – Women’s Suffrage (Kunze, Williams) – Creates the Bi-Partisan women’s Suffrage Centennial Commission responsible to plan and carry out events that educate and raise the awareness about the women’s suffrage movement in recognition of the one hundredth anniversary of the 19th amendment.
Senate Bill 33 – Critical Infrastucture (Hoagland) – To increase penalties for damage to certain so-called “critical infrastructure” facilities. This measure is believed to be targeted at environmental protests of pipelines and other energy infrastructure.
Senate Bill 43 – Domestic Violence (Kunze, Antonio) – Addresses domestic violence by enhancing penalties and restricting firearms from convicted perpetrators. The bill also prohibits strangulation against a family or household member or dating partner.
>> You can monitor the status of all the bills we are watching here.
Committee Hearings To Watch
Tuesday
11 am – House Health Committee – First hearing on HB58 (SNAP benefits) featuring sponsor testimony in Statehouse Room 116
1 pm – Senate Health Committee – Second hearing on SB23 (6-week abortion ban) featuring proponent testimony in Senate South Hearing Room.
1 pm – House Finance Committee – Second hearing on HB62 (2020-21 Transportation Budget) featuring all testimony in Statehouse Room 313.
3 pm – House Ways & Means Committee – First hearing on HB19 (tampon taxes) & HB60 (diaper taxes) featuring sponsor testimony in Statehouse Room 116.
Wednesday
9 am – House Finance Committee – Third hearing on HB62 (2020-21 Transportation Budget) featuring all testimony in Statehouse Room 313.
9:30 am – Senate Judiciary Committee – First hearing on SB33 (critical infrastructure) featuring sponsor testimony in Senate North Hearing Room.
Thursday
9 am – House Finance Committee – Fourth hearing on HB62 (2020-21 Transportation Budget) featuring all testimony and a possible substitute bill in Statehouse Room 313.
Follow us on Twitter for for updates on newly scheduled events and hearings.
In Session
This week, the Ohio House is scheduled to meet in full session on Wednesday at 1pm. The agenda has not yet been announced, and as yet, no bills have been reported by committee for consideration by the Chamber as a whole.
Budget Update: Fiscal Year 2019 Surplus Could Approach Half a Billion
Many news outlets have reported that state Income tax collections have come in below estimates for the past two months. We thought it would be helpful to put this news into context. State officials note that these lower-than-projected collections are not the result of shrinking paychecks, as withholding from workers’ paychecks is coming in where it should. Instead, the shortfall is with taxpayers who pay estimated taxes each quarter, and likely has to do with uncertainty around the size of April tax bills, resulting from big changes to federal tax law enacted in 2018.
In fact, when taken as a whole, state tax collections for Fiscal Year 2019 (which ends on June 30) are $80 million ahead of forecast, thanks to better-than-expected collection of the sales’ and other state taxes.
While state tax collections are above estimate, state spending is actually below initial forecasts. In particular, the Medicaid program is estimated to be costing taxpayers nearly $400 million less than what budget officials estimated it would.
Taken together, higher than expected tax collection and lower than expected state spending will give the DeWine administration a nearly $500 million cushion going into the state two-year budget process.The DeWine agenda includes a great deal of new spending, so this surplus could help them to make a down payment on campaign promises without the need to sell a tax increase to the Republican-dominated legislature.
Last Week’s Most-Clicked Political News Stories
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As always, we will be sharing updates on Twitter using the #OHLeg hashtag for legislation and #OHGov for executive actions. Follow us to stay up-to-date on what’s happening at the Statehouse.>> Sign up for legislative alerts and other updates at innovationohio.org/signup
The DeWine administration has raised the alarm about a looming structural deficit in Ohio’s transportation budget. By March 31, lawmakers must enact a two-year transportation budget, which could include new revenue to address the budget gap.
Many are calling for a gas tax increase to make up for some or all of the shortfall. Before any solutions are enacted, it’s important for advocates to understand how Ohio currently pays for its transportation infrastructure at the state level so we may seek a solution that balances the needs of the system, its users and taxpayers.
What Progressives Should Know
Ohio’s Gas tax – a flat 28-cents per gallon – is low compared to our neighboring states, has not increased since 2005, and is not indexed for inflation.
While the miles Ohio drivers travel each year steadily increases, gas tax revenues are flat thanks to lower fuel consumption.
Ohio’s gas tax is shared with local governments according to a formula. A 1 cent increase in the state gas tax would generate around $43 million in additional revenue for ODOT, and $24 million to be divided up among counties, townships, cities and villages.
Ohio is 11th in mass transit usage but 45th in state support, spending just $.67 per capita compared to $9 in Michigan and $86 in Pennsylvania. ODOT has estimated the state needs to be spending about $150 million per year on transit. The last state budget spent just $39.5 million on transit, $80 million below what the state itself says is needed.
Article XII of the Ohio Constitution limits the expenditure of gas tax revenue to the state’s highway and bridges – pedestrian, bike and transit infrastructure are unlikely to directly benefit from any increase that is passed.
The gas tax is regressive, meaning that low income people pay more taxes as a share of their income than people who earn more.
What Progressives should demand
A balanced solution that looks at a range of revenue sources to fix our immediate needs, and a commitment to look longer-term at the state’s transportation future with an eye toward a future less dependent on gas taxes
Incentives that decrease, not increase, the consumption of polluting fossil fuels
A multi-modal approach to moving people and goods that recognizes that transit, rail, air, bike and pedestrian infrastructure can all work to reduce congestion on our roadways
A less regressive tax system in which the system is funded by users according to both their system use and ability to pay
A commitment by state leaders to aggressively lobby the federal government to address the shortfall in the federal highway trust fund.
Now that the state budget has been put to bed, complete with Gov. John Kasich’s veto, we can finally tell how kids in Ohio’s 600 plus school districts have done during Kasich’s eight years in office.
The results aren’t good. Because Kasich drastically cut and all but eliminated essential revenue streams for children in public school districts, they will have more than $900 million fewer in this biennium than they had during the Great Recession biennium of 2010-2011.
These projections are available now in our Comparing School Funding database, based on all state revenue sent to districts.
Comparing school funding levels – 2010 vs. 2018
The bottom line is Ohio’s school districts will receive $903 million fewer over the next two years than they received during the two years budgeted at the height of the Great Recession, adjusted for inflation. In the 2018-2019 school year alone, districts will receive $492.7 million less.
While it is true that the state aid line item is the highest it’s ever been, Kasich and his legislative allies’ decision to abruptly end reimbursement payments to school districts for lost tangible personal property tax and public utility tax revenues (from tax reforms that have not resulted in appreciably more Ohio jobs), as well as their refusal to replace federal funding meant to prop up state budgets during the Great Recession’s steep state revenue declines have meant that overall state funding to schools has, in reality, plummeted during the last eight years.
Impacts of Privatization
None of this cut includes the significant increase in funding to school privatization efforts in just the last six years – a more than 27 percent increase to state aid transfers from school districts to privately run charter schools and a whopping 205 percent increase in state funding deductions from school districts to private school vouchers– that also remove significant sums of state dollars from school district bottom lines.
Bottom Line
In constant dollars, about 2 out of every 3 Ohio school districts will receive less total aid from the state this next two years than they did from the budget passed during the height of the Great Recession.
Biggest Losers
The biggest loser by far is the Cleveland Municipal School District, which is receiving a whopping $170 million fewer over the next two years. That’s about the same amount cut as the top 20 gaining districts will receive combined. Remember that Gov. John Kasich has insisted that Cleveland make drastic changes or face state take over. Clearly, he has asked that while removing significant sums of state dollars from the district, making any success the Cleveland Plan is having a minor miracle and a testament to the teachers and district leaders working together with far less state support than ever (for a detailed look at the Cleveland Plan, read our report).
Also of note is that Northern Local School District in Perry County, which was the district that originally sued the state in 1991 because it had to rely too much on property taxes – a premise the Ohio Supreme Court ruled four times was an unconstitutional way to fund schools – will receive $5.7 million fewer over the next two years, forcing Northern Local to (you guessed it) rely more on property taxes.
Consequences
The state’s historic, 8-year step back from the education funding table has led to property owners paying more property taxes than ever to educate their community’s children, and at higher rates.
Meanwhile, Ohio’s national, overall education rating has dropped from 5th to 22nd.