1. School Funding, Finding Money, and the State Budget
OAEP May 6, 2019
Aaron Rausch – Budget Director ODE
Jennifer Schmidt – EMIS Specialist
School Funding, Finding Money, and the State Budget

2. Education: The Big Picture
7/11/2016
Education: The Big Picture
SF Update
Represents Ohio’s spending from its GRF, Lottery, LGF and PLF FY 18 $25.9B
GRF revenue comes from two primary sources: income and sales taxes
You can see that Ohio spends 43.5% on primary and secondary education…This includes OSB, OSD and ODE.
Source: Legislative Service Commission H.B. 166 of the 133st General Assembly

3. 7/11/2016
FY20 ODE All Funds Budget

4. 7/11/2016
Where does the money go?

5. 6/7/2019
Budget by Category
Non-Subsidy Expenses – Around $200M for FY19. (1.8%)
Payroll/Benefits (0.6%) - $65M – 585 full time employees.
Purchased Services - $100M (0.9%)
Assessments - >$60M
Report Card - >$4M
Maintenance/Equipment - $39M (0.3%)
IT/Rent/Indirect Charges

6. ODE Program Areas General State Support Educator Quality
7/11/2016
ODE Program Areas
General State Support
Educator Quality
Academic Improvement
School Choice
Adult Education
School Operation Support
Career-Technical Education
Special Education
Curricula, Assessment and Accountability
State Administration and Infrastructure Support
Early Childhood Education
Students at Risk
There are 11 program areas

7. FY20 Appropriations by Program Area
7/11/2016
Academic Improvement
Career-Technical Education
Curricula, Assessment & Accountability
Early Childhood Education
Educator Quality
General State Support
School Choice
School Operation Support
Special Education
State Administration and Infrastructure Support
Students at Risk
FY20 Appropriations by Program Area

8. School Funding – What matters?
6/7/2019
School Funding – What matters?
EMIS Data (Student Data and Demographics)
School District Data (Property Values and Income)
Per pupil amounts and calculations
Ohio’s school funding formula is centered on needs of students. If a student is economically disadvantaged, additional funding is provided. If a student requires special education services or rides the bus to school, additional funding is provided. This funding follows the student if he or she chooses to leave a traditional public school and attend a community school or STEM school.

9. Funding Formula Elements Traditional Districts
6/7/2019
Funding Formula Elements Traditional Districts
Opportunity Grant
Economically Disadvantaged
Transportation
Targeted Assistance
Limited English Proficiency
Special Education
K-3 Literacy
Gifted Education
Career-Technical Education
Capacity Aid
Third Grade Reading Bonus
Graduation Bonus

10. Foundation Formula – FY19
6/7/2019
Foundation Formula – FY19
*FY19 January #1

11. Funding Formula Elements
6/7/2019
Funding Formula Elements
Student Based Funding
Opportunity Grant
Special Education
Economically Disadvantaged
K-3 Literacy
Gifted
Career Tech Education
Limited English Proficient
Capacity Based Funding
Targeted Assistance
Capacity Aid
Performance Based Funding
Third Grade Reading Bonus
Graduation Bonus
Service Level Funding
Transportation

12. Funding Formula Elements
6/7/2019
Funding Formula Elements
Student Based Funding
76.7%
Capacity Based Funding
13.9%
Performance Based Funding
0.4%
Service Level Funding
5.8%

13. Transitional Aid Guarantee
6/7/2019
Transitional Aid Guarantee
Guarantee 100% of FY17 State Aid
Districts with more than a 5% decline in Total ADM between FY14-16 are subject to an adjusted guarantee no less than 95%
Example: District with 7.5% ADM loss guaranteed funding 97.5% of FY17 State Aid

14. Historical Guarantees
6/7/2019
Historical Guarantees
FY14
FY15
FY16
FY17
FY18
FY19
Total Funding
$6.60 billion
$7.03 billion
$7.47 billion
$7.77 billion
$7.95
Billion
$8.07 billion
Guaranteed Amount (Paid)
$184.4 million
$158.8 million
$123.6 million
$104.1 million
$221.5 million
$259.7 million
# of Districts
199
191
174
131
329
343
In FY19, the guarantee provided additional funding between $3.58 per pupil to $4,842 per pupil.
FY19 based on January #1 –
$3.58 per pupil – Brookfield LSD – Trumbull County
$4,842 – Noble Local – Noble County
$9.7M – East Cleveland – Cuyahoga County

15. 6/7/2019
Gain Cap
Funding increases are limited to 3% in each fiscal year, unless a district has experienced increasing enrollment. Maximum growth of 6% in FY19.
Example: District with 4.1% ADM growth can see up to 4.1% increases in funding each year.

16. 6/7/2019
Historical Caps
FY14
FY15
FY16
FY17
FY18
FY19
Total Funding
$6.60 billion
$7.03 billion
$7.47 billion
$7.77 billion
$7.95 billion
$8.07 billion
Capped Amount (Withheld)
$917.4 million
$674.8 million
$603.9 million
$494.6 million
$562.4 million
$465.9 million
# of Districts
341
236
188
151
199
162
FY19 data based on January #1
$3,209pp – Maple Heights – Cuyahoga County
$1.61pp – Plain Local – Stark County
$95.4M withheld – Columbus CSD – Franklin County
In FY19, the cap reduced funding less than $1.61 per pupil to $3,209 per pupil.

17. 6/7/2019
What factors influence if a specific district will see increased or decreased aid?
What factors influence if a specific district will see increased or decreased aid?
There are numerous components and variables that make up the calculation of foundation funding in Ohio. As a result, there are numerous reasons why an individual school district will experience changes in foundation funding across fiscal years or why one district receives more state funds than another.

18. What factors influence district aid?
6/7/2019
What factors influence district aid?
Student Population and Demographics
Property Valuation
Personal Income of District Residents
Historical Funding – Caps and Guarantees
Student Population and Demographics: Ohio’s student-centered funding formula provides resources based on a school district’s Average Daily Membership (ADM). Changes in ADM, whether increases or decreases, can have an impact on a school district’s foundation funding. Similarly, changes in the numbers of students and their needs, from special education to those who are economically disadvantaged, also impact the amount of funding each district receives.
Property Valuation: Changes in property valuation, whether increases or decreases in total or in relationship to the statewide average, can have a significant impact on a school district’s foundation funding.
Income: Changes in income, whether increases or decreases, also have an impact on a school district’s foundation funding. The governor’s budget makes an appropriate change in how income is used to more accurately measure capacity that will drive resources to districts with less capacity to generate local revenue and is a significant improvement over the income adjustment in current law.
Historical funding and previous funding levels: The interaction of formula changes, changing characteristics of a district, and the effects of caps/guarantees can cause unexpected results. When “caps” and “guarantees” are used, the outcomes of any formula are suppressed. Because guarantees have been in place without interruption for many years, the guarantee is not necessarily to last year’s amount, but perhaps to a formula calculation from a number of years prior. This means that guaranteed/capped funding amounts are often based upon district factors, such as student population and/or property values, that are dramatically different from what currently exist. Therefore, funding levels for a district relative to a prior year might be due to the impact of lessening those constraints that short-circuit formulas.

19. Funding “Above the Line”

20. Funding Areas To Review – Above the Line
Limited English Proficiency
Categories similar to SPED
Disadvantaged
Special Education
Categories matter
Rewards for achievement
Graduation Rate
Literacy Rate
Talk about why it’s important to get accurate data as its used by many sources. Districts are coming off the Guarantee or Cap and need to know what matters when not on that model.

21. Money Follows the Child
With few exceptions, students are funded at their district of residence.
Funds flow from the district of residence to the district/school of education via a transfer and deduction.
The amount of funding transferred is dependent on the student and the program.

22. Transfers and Adjustments – Below the Line

23. Open Enrollment District to District transfers
Districts not required to participate
No Open Enrollment (106)
Open to Adjacent Districts (48)
Open to Any District (455)
More than 82,000 students participate in FY19

24. Scholarship Programs Cleveland Scholarship
Open to any student in Cleveland MSD.
Up to $4,650 (K-6) and $6,000 (HS)
7,688 students participated in FY18
EdChoice
Available to students assigned to low performing buildings.
22,330 students participated in FY18

25. Scholarship Programs Jon Peterson and Autism Scholarship.
Available to students with disabilities.
Scholarships up to $27,000
5,260 students participated in Jon Peterson in FY18
3,414 students participated in Autism Scholarship in FY18.

26. Community Schools/STEM Schools
District to School Transfer
Funding transfers different for brick and mortar vs. e-schools.
104,432 students attended community schools in FY18.
3,105 students attended STEM schools in FY18.

27. Where else does student data matter?
Tuition
Excess Cost
Catastrophic Cost Reimbursement
College Credit Plus
Talk about accurate coding and how the tuition module works. Data not reported – can’t collect excess costs.

28. What’s coming next? H.B. 166

29. 7/11/2016
Timeline
March 2019:
Governor submits FY20-FY21 budget proposal to legislature
July 1, 2019:
FY20-FY21 biennium begins
October 2018:
State Board approves budget recommendations and submits to OBM.
March - June 2019:
Budget moves through the legislative process

30. Student Wellness and Success Funding
7/11/2016
Student Wellness and Success Funding
$250 million
in FY20
$300 million
in FY21
Public districts, community schools, and Joint Vocational School Districts will receive additional funding for mental health counseling, wraparound supports, mentoring, after-school programs, and more. Schools will be encouraged to partner with local organizations to address barriers to success so we can give all our students the opportunity for a brighter future.
This funding is separate from the foundation formula.
The per pupil dollar amount, based on the census poverty percentage, will range on a sliding scale from $20 to $250 in FY20 and $25 to $300 in FY21. Joint vocational and community school students' per pupil funding amount is determined by their resident school district. The budget proposal recommends that districts be guaranteed to receive no less than was received in FY19, with every district receiving a minimum increase of $25,000 in FY20 and $30,000 in FY21.
School districts’ funding before transfers and deductions will remain flat in FY20 and FY21 compared to FY19. Deductions and transfers for community schools, open enrollment, scholarship students, and ESCs will continue to update based on FY19 formula calculations.

31. Student Wellness and Success Funding
7/11/2016
Student Wellness and Success Funding
Provided on a per-pupil basis between $20-$250 in FY20 and $25-$300 in FY21
Scaled based on census poverty levels.
All traditional districts, joint vocational school districts, and community schools receive at least $25,000 in FY20 and $30,000 in FY21.
Funding paid directly to educating entity.
Public districts, community schools, and Joint Vocational School Districts will receive additional funding for mental health counseling, wraparound supports, mentoring, after-school programs, and more. Schools will be encouraged to partner with local organizations to address barriers to success so we can give all our students the opportunity for a brighter future.
This funding is separate from the foundation formula.
The per pupil dollar amount, based on the census poverty percentage, will range on a sliding scale from $20 to $250 in FY20 and $25 to $300 in FY21. Joint vocational and community school students' per pupil funding amount is determined by their resident school district. The budget proposal recommends that districts be guaranteed to receive no less than was received in FY19, with every district receiving a minimum increase of $25,000 in FY20 and $30,000 in FY21.
School districts’ funding before transfers and deductions will remain flat in FY20 and FY21 compared to FY19. Deductions and transfers for community schools, open enrollment, scholarship students, and ESCs will continue to update based on FY19 formula calculations.

32. Student Wellness and Success Funding
7/11/2016
Student Wellness and Success Funding
Schools must develop plans for use.
Funds are restricted to 10 areas of support.
Schools must coordinate the use of funds with community partners.
Schools are required to report on how funds were used to support students.
Public districts, community schools, and Joint Vocational School Districts will receive additional funding for mental health counseling, wraparound supports, mentoring, after-school programs, and more. Schools will be encouraged to partner with local organizations to address barriers to success so we can give all our students the opportunity for a brighter future.
This funding is separate from the foundation formula.
The per pupil dollar amount, based on the census poverty percentage, will range on a sliding scale from $20 to $250 in FY20 and $25 to $300 in FY21. Joint vocational and community school students' per pupil funding amount is determined by their resident school district. The budget proposal recommends that districts be guaranteed to receive no less than was received in FY19, with every district receiving a minimum increase of $25,000 in FY20 and $30,000 in FY21.
School districts’ funding before transfers and deductions will remain flat in FY20 and FY21 compared to FY19. Deductions and transfers for community schools, open enrollment, scholarship students, and ESCs will continue to update based on FY19 formula calculations.

33. Questions for the guy who actually writes the checks? Ask away….