For Julie Wagner Feasel, a longtime member of the Olentangy school board, the question is simple.

"If you don't have enough money to fund the formula, why do you even have the formula?" she said.

Growing school districts -- rich, poor and anywhere in between -- often do not see the amount of funding the state's formula prescribes. Instead, they run into a cap imposed by the Ohio General Assembly that limits the amount of money a district can receive from the state per year.

At the same time, many districts that should receive less money under the formula are subject to a "guarantee," which shields them from harsher cuts even as enrollment declines.

As the mechanics of the state's school-funding formula and the characteristics of districts change over time, it is necessary to provide transitional aid to ensure that districts don't see large year-to-year disruptions in their levels of state aid, according to Jay Smith, the Ohio School Boards Association's deputy director of legislative services.

"These transitional-aid payments are commonly referred to as the 'guarantee' and are typically linked to the prior-year funding levels," he said.

One local school district under the "guarantee" is Grandview Heights.

"Our district is not affected by the cap. We are actually kind of in the opposite situation. We are on the 'guarantee,' " said Beth Collier, district treasurer.

Ahead of May's primary races and November's general election, local leaders of growing districts are wondering if now is the right time to push state leaders for change.

Districts with growth

On paper, the differences among the Delaware, Olentangy and Whitehall school districts seem stark.

According to Ohio Department of Education records, fewer than 7 percent of students in southern Delaware County's Olentangy Local School District qualified for free or reduced-price lunches in fiscal 2017. In exurban Delaware, the rate sat at more than 33 percent. In Whitehall, which is completely surrounded by the city of Columbus, the rate topped 75 percent.

Although the districts might differ in economic background, they share one key trait: increasing enrollment. Districts cannot limit their enrollment growth, but the state can and has limited the percentage of additional funding it is willing to give to districts adding students.

The biennium budget approved in 2017 for 2018 and 2019 set the ceiling for state-funding increases to school districts at 5.5 percent in fiscal 2018 and 6 percent in 2019.

Without the cap in place, Olentangy would have seen about $41 million more from the state this fiscal year. It stands to lose out on about $43 million in state funding next fiscal year.

Feasel said recuperating the funding lost to the cap, or even a portion of it, could reduce the frequency of the district's levy requests. The district of more than 20,000 students is projected to increase to more than 24,000 within a decade.

>> District leaders respond
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"We're still adding students, (but) the gain cap (couldn't) care less that we're adding students," Feasel said.

In addition to added operating expenses, Olentangy officials must figure out how to pay for new facilities. The district will open a new $69 million high school this summer, and two new elementary schools could be needed within the next decade.

The district last went to the voters in March 2016, earning approval for a 5.9-mill operating levy, a 1-mill permanent-improvements levy and a no-new-millage bond issue. The request was the district's second since 2011.

Despite serving a population largely on the opposite end of the economic spectrum from Olentangy, the Whitehall City School District also loses out under the cap.

The district, which saw its enrollment increase by 24 percent from 2011-16, is set to miss out on about $11 million per year this budget cycle.

Whitehall Superintendent Brian Hamler said the district, which gets about two-thirds of its operating budget from state funding, has not asked its residents for an operating levy since 1995. He said that could change in the near future in part because of the cap.

Hamler said the district could reduce class sizes and offer more services for special-needs students if the cap were increased or eliminated. He said the cap might be a bigger topic of conversation among parents in other school districts because they ask for new tax levies more frequently.

"I think we all have different needs, but the common thread is, we're all being impacted by the cap," he said.

Delaware voters last fall approved a five-year, 8.35-mill emergency levy to bring in an additional $6.2 million per year. Without the cap in place, the district might never have sought the levy, leaders said.

Delaware Superintendent Paul Craft said the district is home to "very middle-class families" but faces funding-cap-related challenges similar to Olentangy and Whitehall. The district will lose out on about $7.6 million in funding this school year and about $9.1 million next year because of the cap.

Craft said it's not about wealth, but growth. He said wealthy districts in Ohio can be fully or almost fully funded under the formula as long as they had the good fortune to hit their growth spurts ahead of the late-2000s financial crisis.

The economic downturn led to budget crunches, with big repercussions for school systems that continued to add students, he sid.

"Districts that grew at the wrong time are getting (hurt) by the formula," Craft said.


According to research provided by Craft, about 70 percent of the state's more than 600 school districts receive all of or more than the amount prescribed by the funding formula, whereas a minority of districts receive less because of the cap.

Why does such a system exist? The answer comes down to politics.

Craft said although many districts in central Ohio have seen enrollment spike over the past few decades -- especially those in Delaware, Franklin and Licking counties -- the story has not been the same throughout the state. Pushing for harsher cuts to districts losing population might be seen as politically unpalatable to the legislators representing those districts.

State Rep. Andrew Brenner (R-Powell), chairman of the Ohio House of Representatives Education and Career Readiness Committee, said state funding for schools is a "huge issue" for voters in his home district of Olentangy.

He said the cap system can act as a de facto tax increase on residents by leading the district to seek more frequent levies.

Brenner said it's been difficult to find a politically viable way to provide relief for residents in such districts as Olentangy and New Albany-Plain Local because many districts benefit or, at least, suffer less under the existing system.

"Basically, you're looking at a handful of districts that are taking a big hit," he said. "That really limits the scope."

Jim Sotlar, superintendent of the Canal Winchester Local School District, said via email his district, which straddles Franklin County's border with Fairfield County, is not a part of a coordinated push for cap relief despite losing out on about $1.8 million in funding from the state.

"We are not a member of a coalition to address this issue because we are in different scenario than other districts receiving less funding," he said. "It is difficult for our district to complain when we receive near 91 percent of the calculated formula when 10 percent of the districts receive less than 60 percent. We would definitely help advocate equality for other districts but would not to harm our own district."

The cap was the rare issue that led to bipartisan consensus March 5 at a candidates night hosted by the Olentangy School Advocacy Committee at the district's Orange Township administrative offices. The candidates looking to succeed Brenner who attended the forum all agreed something needs to change at the Statehouse to benefit growing districts.

Brian Lorenz, a Republican from Powell seeking to represent Ohio's 67th House District, said the cap-guarantee system creates a "fundamental problem" by pitting districts and schools against each other in a fight for resources.

"We're not going to fix anything until we fix these caps," he said.

Lorenz, a member of Powell City Council, is running against state Sen. Kris Jordan of Ostrander and Denise Martin of Delaware for the Republican nomination in the 67th District primary.

Delaware's Cory Hoffman, the lone Democrat running for the 67th District seat, agreed with Lorenz about the negative effects of the existing system.

He said he would not vote for a budget that caps funding to growing districts.

"I fundamentally think the growth caps are unjust and a wrong way to fund public education," he said. "In my mind, it punishes communities and towns for being desirable places to live."

Brenner is running to represent the Ohio Senate's 19th District and will face Joel Spitzer, the Orange Township fiscal officer who has stated his support for "phasing out caps," in May's primary election.

The winner will go up against Louise Valentine, a Democrat from Genoa Township.

Valentine said the state should not give funding to charter and private schools if it cannot adequately fund public schools. She said something needs to be done to give relief to districts affected by the cap.

"If districts are growing, that needs to be accommodated," Valentine said. "You can't just keep the money stagnant and expect (districts) to continue to take in schools of children ... and not have the resources to educate them."

Proposed solutions

When it comes to problems involving state funding for local districts, solutions don't always come quickly.

In perhaps the most famous example, the Ohio Supreme Court in a 1997 ruling "admonish(ed) the General Assembly that it must create an entirely new school financing system" after a split court found the state's education-funding system was unconstitutional. A coalition of hundreds of districts brought the landmark case known as DeRolph v State, arguing the system's reliance on local property taxes hurt many districts with low property values.

More than two decades after the decision, the state legislature has not fundamentally overhauled the way public schools are funded.

Perhaps that helps explain why Delaware's Craft sees a Statehouse push as the only proper way to resolve the cap issue.

"We don't think there's a court solution to this," he said. "We think it (has to be) a legislative solution."

Craft said he sees three courses of action for the legislature: fully fund the formula immediately; stick to the status quo; or gradually give districts their full funding. Although the first course of action might seem unlikely, Craft said, he hopes Delaware and a potential coalition of other affected districts could work toward making the last option a reality.

"Everyone I've talked to has kind of been intrigued (that) maybe there's a path," he said.

Craft's suggestion is for the state to give districts at least 70 percent of their calculated formula funding, then raise the amount by 10 percent per year until it reaches 100 percent.

Although many districts do not suffer under the existing funding system, Craft said, he thinks enough legislators represent at least one district that takes a hit under the cap to make change possible.

Though the plan would be a boon for districts such as Olentangy, which receives only about 20 percent of its prescribed formula funding because of the cap, Feasel said she's not yet sure it would be politically viable. She said even if the cap were phased out gradually, the additional money would have to come from somewhere.

"If we request more money for education, someone else isn't going to get that money unless you do (statewide) tax increases, and nobody wants to do tax increases," she said.

Whitehall's Hamler said he hopes the state legislature can "chip away at (the cap) for multiple budget cycles."

Whitehall treasurer Steve McAfee said the state could help districts such as his by first eliminating the cap's effect on targeted assistance, a portion of the formula aimed at aiding poorer districts. He said that action would "help the districts that have less ability to help themselves first.

Brenner said he thinks change in the state's school-funding system is not impossible, especially if the next governor takes an interest in the issue.

Brenner previously introduced House Bill 102, legislation that would replace funding from local property-tax levies with funding from a statewide property tax and an increased state sales tax.

He said he viewed the proposal as a "conversation starter ... to get people to understand the problems associated with school funding."

The proposal's fans do not include Brenner's primary opponent or his potential general-election opponent.

"I think there has to be a better solution than taking ... local control away from local districts," Spitzer said at the March candidates night.

Valentine cited similar concerns in opposing the measure.

Feasel said whatever the solution, it will take legislators willing to make tough choices to resolve the cap issue.

"The formula isn't working, and it needs to be redone," she said. "We need people to sit at the table and get it done."


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