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The Ohio Fair School Funding Plan is bipartisan legislation introduced in the Ohio House of Representatives as House Bill 1 (“HB 1”) by Republican Rep. Jamie Callender and Democratic Rep. Bride Rose Sweeney. The bill creates a new school financing system for K-12 education in the state of Ohio.

Background

In recent decades, Ohio’s Supreme Court has ruled four different times that Ohio’s method of funding schools violates the state constitution. As a result of those rulings, Ohio’s legislators have made several attempts to reform Ohio’s school funding system. The Ohio Fair School Funding Plan and its predecessors from prior legislative sessions are the first major attempts at a large-scale overhaul in Ohio in decades.

Currently, the state’s education funding law is an attempt to “equalize education for all Ohio children, regardless of how rich or poor their community is,” according to the Cleveland Plain-Dealer. Most school districts are in one of two categories: districts where local property taxes are not sufficient to pay for school funding, and districts with higher property values that have a cap placed on how much state funding they get.

According to Ohio Senate President Matt Huffman, decades ago Ohio spent half of all education funding on teacher’s salaries. Presently, it is only 30 percent. In his proposed biennial state budget released in February 2021, Ohio Governor Mike DeWine did not include any changes to the state’s funding formula.

In 2021, the base cost per pupil that the state pays to local schools is at $6,020. Proponents of the legislation argue that it is a broken formula that arrives at that dollar amount, as it “has no tether to actual costs or qualify.”

Legislation

Overview

Reps. Callender and Sweeney introduced the Ohio Fair School Funding Plan (“HB 1”) in early 2021. HB 1 creates a new funding formula for the state’s primary and secondary education system. The bill and its provisions are the outcome of a legislative coalition called the Fair School Funding Workgroup, which was tasked in 2019 with studying the state’s education funding formula and returning with ideas on how to improve and modernize it.

Under the legislation, state funding for K-12 education would be made as direct payments to schools, rather than bundled funding to school districts. The bill would use not only property values but also the incomes of local residents when determining how much the state will give to school districts and how much districts will have to raise on their own.

The bill also creates new categories of state education funding, including special education, gifted education, English as a second language (ESL), and transportation. It also includes a boost for schools in economically disadvantaged areas. Career technical education funding also is increased under the provisions in the legislation.

To fully implement the bill, the state would need to add approximately $2 billion onto the existing $8 billion it currently spends. Ohio’s Legislative Service Commission estimated that statewide cost per pupil under the bill, if signed into law, would be $7,202 per year.