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Home > Blogs > Get on the Bus > Archives > 2008 > June > 23 > Entry
Big ‘oops’ helps Middletown, hurts others
A budget correction bill passed by the legislature will fix an error in school funding and also will cost two area districts a chunk of state cash.
West Carrollton and Northridge schools each will have to pay back more than $200,000 to the state by receiving lower payments than anticipated starting this fall. The change subtracts about 3 percent from Northridge’s state aid and 2 percent from West Carrollton’s.
On the other side of the coin, Middletown gets almost $1.5 million extra — the biggest windfall among the 118 Ohio districts getting more money out of the change. That equates to about 7 percent of the district’s state aid. Monroe schools in Butler County get $445,000, which equates to 11 percent of its state aid; Miamisburg schools get $$718,000 or about 4 percent of state aid; and Anna schools in Shelby County get $249,000, or the equivalent of 9 percent of state aid.
All four of those districts are among the 20 biggest winners in the recalculation among Ohio’s 610 school districts. Miamisburg and Northridge are among the five hardest hit. Most area districts were not significantly affected.
For Middletown, a district with financial struggles that just passed a levy, the money can be an immediate help, Treasurer Eric Sotzig said. And the new calculation method will bring more money in upcoming years, too.
“This certainly impacts Middletown schools in a positive way,” Sotzig said.
In all, 188 districts will have to pay back about $6.4 million collectively while another 116 districts get an extra $15.9 million.
The fix was related to the gradual phase out of the tangible personal property tax, which taxes inventory and equipment held by businesses. The Columbus Dispatch first reported Monday that state reimbursements for the lost taxes — which will shrink every year until disappearing in 2017 — were based at first on projected enrollment rather than the actual numbers of students in each district.
Ryan Shone, treasurer of West Carrollton schools, said the $289,305 overpayment to that district will not be a major problem as it is subtracted from state aid payments in August, October and May of the upcoming year.
“The amount in October last year was higher than what I was estimating,” he said. “It turns out what I was estimating was pretty much on target and the state sent us more. The net effect is that they are sending us this year the amount that I was estimating a year ago.”
Slone said new money coming in from a recently passed levy will help make up any small shortfalls that might occur. With $36 million in total revenue from state and local taxes, the deduction amounts to less than 1 percent — a manageable sum, he said.
Permalink | Comments (6) | Post your comment | Categories: School Funding
Comments
By Buford
June 28, 2008 11:43 AM | Link to this
Colleen, many thanks for a well-presented background on the circumstances. Nice to see some facts on the matter. So, in essence, the various school districts knew ahead of time there was a potential vulnerability from this legislation and their budgets could be impacted one way or another.By Colleen
June 27, 2008 6:58 PM | Link to this
I’d just like to add a few facts to the discussion on this topic. The original formula was established in budget bill HB 66 several years (and two budgets ago). It specified that ADM projections (not actual ADM) be used to calculate reimbursements to districts. At the time, ODE noted that the estimates and the formula would likely need to be adjusted over time. To that end, ODE provided districts with calculation tools and assistance that would allow then to track the calculations. Last year districts began to note the difference between calculations using actual versus estimated ADM. At the request of districts, ODE supported a change in law that would ALLOW ODE to update the formula and use actual ADM to adjust calculations. School districts were aware that the change in the formula was coming and that it would be included in the corrections bill. The professional organization that represents school treasurers (OASBO) was involved in the discussions. This provision was supported by legislators on both sides of the aisle as well as Governor Strickland. (In fact, while the Governor used his line item veto on a number of provisions in the corrections bill, he chose to leave this provision intact.) Rep Husted’s had no direct involvement in the process other than he was the current Speaker. The State Board was not asked to take a formal position on this issue. The change was seen as technical in nature and had no known opposition. The change wasn’t the result of someone making a mistake, it was expected as a result of circumstances changing over time and the recalibration of a formula as better data became available.By Rich
June 23, 2008 11:46 PM | Link to this
What can you say about this, beyond letting out a huge SIGH? Of course, overpaid districts must repay their extra money, while underpaid districts can enjoy an unexpected windfall. Big questions remain: who allowed this to happen, why did it happen, and what is being done to ensure it won’t happen again? Schools need stable, predictable revenues to prepare reliable budgets, and the state needs to get its act together so this doesn’t happen again.By Oldprof
June 23, 2008 11:22 PM | Link to this
Nobody could run any business without a clear idea of available cash. For the state to keep doing these recalculations and revisions is incontrovertable proof of incompetence. John Husted was in charge of this clumsy legislation; the state board of education was it’s midwife. Time for all involved to resign in disgrace—or get turned out of office by the voting public.By mskiles314
June 23, 2008 8:20 PM | Link to this
Is there a link to the data? I’d like to know what districts were effected. I know the Dispatch cited the ODE, but that narrows it down about as much as saying the source is “someone on the planet earth” in regards to their lucid website.By Joe Lacey
June 23, 2008 7:53 PM | Link to this
Dayton Public lost about $35K.