Ohio is lagging far behind its stated goal of having 65 percent of our citizens attain post-secondary degrees or certificates. These post-secondary options must be more attainable for more of our students, especially those from at-risk populations. We will not reach the goal without significant improvement in attainment among our economically-disadvantaged, minority and first-generation students. These recommendations would all cut to the core of these issues, making colleges and universities more accessible and attainable for more students.
New Proposal Adds $718M For Ohio School Districts
Here’s our weekly update on where things stand with state budget negotiations. Maybe by next week we can stop talking about the transportation budget, which was supposed to have been signed into law on Sunday. Hopefully?
Transportation Talks Deadlocked
The House and Senate remain deadlocked on how much to raise the state’s gas tax after blowing through their weekend deadline to fund the Department of Transportation. Both chambers passed smaller tax increases than Governor DeWine requested, but on Friday, the House and Governor reached a deal for an 11-cent increase. Senate Republicans, who already passed a 6-cent tax increase say that’s too much, so talks continue. The two sides did agree to a major increase in spending on public transit — up from $40 million to $70 million annually. The gas tax (and whether there will be electric vehicle fees or a front license plate requirement) still needs to be worked out, hopefully in a conference committee meeting happening today at 1pm.Proposed Funding Plan Would Add $718 Million For Ohio School Districts
The Fair School Funding Plan is out, and with it are the simulations showing how much additional revenue school each district in the State would get in the first two years of its phased-in implementation. The plan would base funding for schools on the actual cost of providing an education, factoring in the ability of the district to raise money locally, and adding additional funding for high-poverty, gifted, special ed and English language learners. By year 2, the plan would increase school district funding by $718 million, while creating a separate line item to directly fund charter schools, a major win for public school advocates. No district loses money under the plan, but some districts see no new revenue, largely to hold them harmless if the new formula says they should lose funding due to shrinking enrollments. More hearings and tweaks are expected as the plan is considered in parallel to the state budget (HB166). If it becomes part of the budget plan, lawmakers will need to find additional revenue to fund it, something we’ve been very clear is needed On the budget itself, this week subcommittees continue hearing agency testimon, with an opportunity for public testimony expected next week. You can see all our budget updates and analysis, as well as outside news and editorial opinions on our new new Budget Central website.Gas Tax Crunch Time and A School Funding Plan
A budget update for the week of March 25:
Final Week of Work on Governor DeWine’s Transportation Proposals
The transportation budget—and with it, an increase in Ohio’s gas tax to fund roadwork and a boost for public transit—goes into the homestretch this week. A House-Senate conference committee will be appointed to work out differences between the DeWine proposal and the House and Senate versions of the bill. The 6-member conference committee will be made up of 4 Republican and 2 Democrats (2 of the former and 1 of the latter from each legislative chamber), with Reps Oelslager, Greenspan and Cera likely to be joined by Senators Hottinger, Dolan and Antonio.Unlikely Allies?
Typically, such a lopsided committee makeup leads to many items being approved on a 4-2 vote along party lines. This time could be different. The House version of the budget, which reduced DeWine’s 18-cent gas tax increase to 10.7-cents and increased transit funding to $100 million was approved by a wide, bipartisan margin. The Senate version, with its 6-cent gas tax increase and $55 million for transit, passed largely along party lines. There’s a not-insignificant chance we could see House Republicans team up with both Democrats to push through a final package that looks closer to the House version. Whatever they come up with, it must be approved by both chambers by the end of the week in order to get a final package to Governor DeWine in time for the March 31 signing deadline.Testimony Begins on DeWine’s Two-Year Operating Budget
The operating budget had its first week of testimony in the House Finance committee last week. The biggest news of the week was the $700 million gap between the revenue estimate produced by the DeWine budget office and that of the General Assembly. If lawmakers stick with their own estimate, DeWine’s spending proposals – already too modest in our opinion – will need to be trimmed by $700 million, and that’ before any new spending is added.Sources of New Revenue
Unsurprisingly, this week we heard Finance committee members asking the DeWine administration about its decision to preserve the $1.3 billion small-business tax break known as the “LLC Loophole.” The gimmick, created by Gov. Kasich in 2013, allows certain pass-through business owners take home their first $250,000 in earnings tax free, but has not been shown to have any impact on job creation. Another revenue-raiser the House may consider is applying Ohio’s sales tax to internet sales from out-of-state shippers. The Tax Department told committee members last week that this proposal could generate $350 million or more in annual revenue for the state.Agencies Defend Their Budgets
We still don’t have a bill number (or bill language!) for the DeWine budget, but that doesn’t stop it from moving to the subcommittees of House Finance, where various licensing boards and commissions will make their funding pitches to lawmakers this week. Among those testifying will be representatives from the Governor’s Office, Attorney General, Secretary of State, Auditor and Treasurer, as well as the Ethics Commission, Commission on Minority Health and the Department of Insurance. Subcommittees will continue hearing agency testimony next week, then move on to public testimony the week before the legislative Spring Break (April 15-19).New School Funding Formula Debut
The most-watched subcommittee hearings this week are likley to be those of the House Finance Primary Secondary Education, where members will hear the long-awaited details of the Fair School Funding Plan developed by a working group led by co-chairs Representatives Cupp and Patterson. Read more details about the plan, which was released at a news conference (watch online) earlier today.What’s in DeWine’s K-12 Budget?
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.
Good News. But Not Good Enough
The most recent report from the Pell Institute for the Study of Opportunity in Higher Education gave us Ohio higher education advocates some hopeful news. Between 2005 and 2015, Ohio had the nation’s seventh-largest percentage increase of 25 to 64 year olds attaining bachelor’s degrees or higher. The 13 percent increase was only outdone by Oregon, South Carolina, North Carolina, Indiana, Tennessee and Kentucky, which topped the nation at a 17 percent increase.
Here’s the problem: Ohio is so far behind that reaching the national average attainment level in the next 10 years would require Ohio to nearly double that improvement rate. And while we did improve our national standing between 2005-2015, the “jump” was from the nation’s 37th highest college attainment rate to its 35th highest.
So we’re better, but still not great.
If we want to catch up with the nation’s top attaining state, Massachusetts? We’d need to improve our attainment rate over the next 10 years by more than 5 times the rate we achieved over the last 10 years. In other words, keeping the same improvement rate doesn’t move the needle a whole lot compared with the nation’s highest performing states.
The bottom line is this: We’ve seen nice improvement in degree attainment, but we have started from so far behind that we have to do significantly better to leverage a greater talent advantage over other states in the coming years. This is why we must insist on more meaningful state investment to improve Ohioans’ access to, and affordability of post-secondary options.
New Report Sheds Light on Post-Secondary Challenges Facing Ohioans
A new report from the Innovation Ohio Education Fund titled, “The Heart of it All: How Ohio’s Lagging Investment in Post-Secondary Education Must Be Reversed For Its People to Prosper in Today’s Economy” has examined rarely analyzed state education data to reveal a stark picture of Ohio’s urgent need to invest in its post-secondary education and workforce development systems.
Ohio is at the vanguard of a number of national problems concerning higher education access and attainment. Fewer and fewer Ohioans are upwardly mobile, earning more than their parents. As more jobs require a post-secondary credential, Ohioans continue to lag behind the rest of the country in obtaining them. The number of Ohioans enrolled in post-secondary programs is shrinking primarily due to the increased financial burdens students and families must shoulder because of continued state divestment from the necessary post-secondary programs required for the 21st century knowledge economy. This is especially true for students from poorer communities and students of color. Key findings from the report include:- Ohio had the ninth lowest per student financial commitment to higher education in the United States – nearly $2,100 less than the national average.
- Ohio’s higher education enrollment drop of over 17% between 2011 and 2017 was the largest drop in the country. While Ohio’s 2015 enrollment was higher than before the 2008-2009 Great Recession, the difference was only 0.8%, which was the nation’s sixth lowest increase.
- Overall, 44% of Ohio adults aged 25-64 have at least an associate’s degree or a high-quality workforce credential, compared to 47% of the country. Less than 7% of the Class of 2018 received industry recognized credentials, which can be an effective and far less costly alternative for non-college bound students.
- Over three decades, the state’s investment in higher education has dropped by 25%, which, coupled with cuts to need-based aid, has made Ohio 45th in college affordability. This financial divestment appears to disproportionately impact college access for poor students in both urban and rural districts.
- Socioeconomic status impacts not just enrollment, but also completion. Students from poor school districts are twice as likely to fail to complete their programs. A similar gap exists between suburban and rural districts.
ECOT Founder Sides With Mike DeWine In Court Filings
New developments in the court battle between the State of Ohio and former online chart school ECOT suggest the state’s top law enforcement official may have trouble effectively pursuing the case. Last month, Attorney General Mike DeWine filed a lawsuit against ECOT founder William Lager and other ECOT officials seeking to recover tens of millions in overpayments for students who did not participate in coursework. At the time, DeWine was criticized for waiting until just before an election to go after ECOT, when questions had been raised about the school for years.
Two weeks later, two school districts — Dayton and Logan Hocking Schools asked a court to intervene in the lawsuit, claiming it should be school districts, and not Attorney General DeWine who should seek repayment from Lager. (See: “DeWine Opposes Districts’ Intervention In Case Against ECOT Founder) They argue that because DeWine– currently running for Governor–and his running mate, Jon Husted, jointly collected tens thousands of dollars in political contribution from Lager and associates, they woud not be effective in pursuing repayment from their former contributor.
As the school districts argued, “There is no question that the AG is a friend of theses institutions … (and) is not an adequate representative of the School Districts’ interests.”
In response to the lawsuit, DeWine argued that he, and not the school districts, could lead the case against Bill Lager, denying any conflict of interest.
But last week, the schools’ argument that DeWine’s past relationship with Lager make him less likely to effectively pursue the case was unexpectedly bolstered by Lager himself.
Lager, the defendant in the lawsuit, argued in an October 9 court filing that he agreed with DeWine, stating a preference to go up against the Attorney General in court: “Leaving aside arguments dealing with the ability of the Ohio Attorney General to protect constituent interests and the conflict of interest issues … [Mr. Lager and his companies] incorporate and rely on the balance of the arguments advanced by the Ohio Attorney General,” in effect agreeing that Mr. DeWine should handle the case.
This week, Innovation Ohio sent a memo to every school district leader requesting that they take immediate action to protect their taxpayers and kids because it was clear that Lager felt more comfortable facing DeWine in court than the districts who had been hurt financially. (See “…Groups Want More Districts In ECOT Suit”)
On Tuesday, the school districts made another filing arguing that Lager’s filing simply proved their point: Mike DeWine was not best positioned to fight for a recovery from Lager. As the districts put it, “It appears that even some of the Defendants do not believe the AG will be as zealous an advocate for the School Districts as the Districts will be for themselves. “
The filing further reveals that DeWine hasn’t yet revoked any educator licenses related to ECOT, as has been done in prior cases of charter school wrongdoing. As the suit puts it: “If the AG was truly out to help the School Districts, he would already be in the process of revoking professional licenses of educators associated with ECOT’s misappropriations. Despite the fact that ECOT’s overbilling totaled more than $79,640,000 and that it has been closed since January 18, 2018, not a single ECOT-related educator license is the subject of revocation proceedings.”
The school districts argue that “the AG’s professed zeal on behalf of public schools in this state for misappropriations of the School Districts’ monies to ECOT is not genuine.”
The ECOT scandal–at $189 million, easily the state’s largest ever involving taxpayer dollars–is far from resolved. Innovation Ohio strongly urges school districts to take note and be mindful of the potential conflicts inherent in the relationship between DeWine and Lager. It appears more clear every day that it’s going to be up to districts to lead the fight to get their kids’ money back from Lager.
ECOT’s Long History of Problems
There were warning signs about the Electronic Classroom of Tomorrow (ECOT) from the very start. Some examples:
2000
“Based on its review of the first-year annual reports, LOEO (Legislative Office of Education Oversight) found that community schools did not provide the information necessary for accountability purposes. Although schools claimed that they met their educational goals, few schools provided supporting evidence or even described how they evaluated student and school performance.’’
2002
“The biggest threat to the state’s experiment with charter schools is not the teachers’ unions, school boards and related special- interest groups that have launched a lawsuit to kill the program in its infancy,’’ according to the Columbus Dispatch editorial page. “A far worse threat is that the charter- school concept will be discredited because of mismanagement and poor oversight by the state officials in charge of it.’’
2005
“… generally, when things go wrong with charter schools, they go enormously wrong,” said Ohio Auditor and GOP gubernatorial candidate Betty Montgomery, calling for greater fiscal oversight of charter schools and a separate commission to review new charter schools’ contracts before they’re allowed to open.
2014
“We think a lot of them (charters) need to be closed, because they’re not doing a good job…. We think charters have a role in the education base, but we also think most of the charters in Ohio stink,’’ Greg Harris, director of pro-charter group StudentsFirst Ohio, told the Dispatch.
“Ohio has a real quality control problem. Ohio’s more broken than the Wild West,” said Alex Medler of the National Association of Charter School Authorizers.
2016
‘’… more students drop out of the Electronic Classroom or fail to finish high school within four years than at any other school in the country,’’ according to The New York Times.
No Type of District or Community Immune to ECOT
Now that we’ve released district-by-district deductions to the scandal-ridden and potentially criminal enterprise that was the Electronic Classroom of Tomorrow, it’s helpful to examine what types of districts lost money and students to the scammy school. The state has nine categories of districts it tracks. Within those categories the state classifies them based on location (urban, suburban, rural, small town) and poverty from very low to very high.
About 1/2 of the $591 million came from urban districts, but not just large ones like Cleveland and Columbus, but smaller urbans like Mansfield and Lima. Surprisingly, the next largest category of losses to ECOT — about $200 million — came from small town and rural districts which tend to be much smaller sizes.
Even large, wealthier suburban districts lost money and students to ECOT to the tune of about $100 million.
Looking at just the districts’ poverty classification, ECOT received about 2/3 of its money from poor or very poor Ohio school districts. No surprise there. However, the next largest category of funding came from low poverty districts. More money came from Ohio’s wealthiest districts than school districts with average poverty.
What does all this mean? It means that ECOT’s largest impact was on Ohio’s poorest districts and students — areas and populations that have traditionally suffered outsized portions of public scandals like ECOT. However, the scale of ECOT’s scam was so large that even Ohio’s wealthiest school districts were not immune from this school’s politically connected tentacles.
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