Meeting Schedule, Agendas and Minutes
December 17, 2004 Minutes
Members in attendance included Chairman William W. Wilkins, Vice Chairman Jim Hyre, Susan Bodary, John Brandt, Eric Burkland, Fred Church, Walt Davis, Paolo DeMaria, Matt Filipic, Christine Hansen, Russ Harris, Representative Bill Hartnett, Tom Johnson, Jim Mahoney, Dick Maxwell, Tom Mooney, Dan Navin, Barbara Shaner, Barbara Sprague, Richard Stoff, Dennis Woods, Tom Zaino and Susan Tave Zelman.
Presentations:
- Draft Recommendation on School Board Training (PDF*, 46 KB)
- DeMaria Comments on the BRTF Draft (PDF*, 31 KB)
- Report from the Governor's Blue Ribbon Task Force on Financing Student Success — REVISED DRAFT, December 14, 2004 (PDF*, 163 KB)
The meeting was called to order at 10:10 a.m. by Chairman Wilkins.
Mr. Wilkins stated that the purpose of the meeting is to discuss the draft report. Some Task Force members are not able to be here but we will ask for their input as well. How we might incorporate Mr. DeMaria's material into the report will be one of the discussion points as well. Staff will prepare another version including comments heard today. This revised draft will be sent to members before the end of this year. Today will be our last meeting. We will try to issue a report by the end of this year. Mr. Wilkins thanked everyone for their hard work. The Task Force held many meetings that involved rich discussion. This has been a learning experience for all. Mr. Wilkins added that the work of the Task Force will help guide public policy for a long time to come. Mr. Wilkins closed by noting that every point in the report is not supported unanimously, but he believes that many points do have unanimous support of the Task Force.
Mr. Marshall thanked all Task Force members for their diligence and perseverance. He noted that Mr. Filipic had provided staff with a new structure for the report which was very helpful. Mr. DeMaria's additions were also appreciated. Organizationally, the draft report begins with a cover letter from Chairman Wilkins that states that this is not a unanimous document. Background on why education is important is followed by a description of Ohio's current school funding system. Recommendations follow this description and the process description is in an appendix.
Ms. Shaner stated that the education members of the Task Force have been meeting to make sure that they all understand what is in front of them. Education members believe that Mr. DeMaria's additions are excellent and would like to see them incorporated into the Task Force's report. Mr. Wilkins replied that Mr. DeMaria's document would be folded into the report where appropriate.
Mr. Brandt observed that the amendment dealing with tax reform is a good change from the earlier draft and accurately depicts Task Force discussions. Mr. Burkland agreed that it was well done and will add to the dialogue in the next General Assembly.
Ms. Shaner noted that the education members of the Task Force suggest that the tangible property tax charge-off be revenue-neutral (29 mills) instead of 40 mills. She wanted to make sure that Mr. Navin is comfortable with this idea. The education members would like to see a reference to a 40-mill charge-off as a way to deal with the elimination of the inventory tax, but not necessarily start with the 40-mill charge-off. It could be phased in over time.
Mr. Zaino stated that he would be leery of backing away from the 40-mill charge-off. If the Task Force goes lower you are probably going to have to negotiate down from there in the legislature. Maybe the report could say something like "up to 40 mills." If we give them 29 mills, that will be the highest we can ever hope to get, and we will probably get less.
Mr. Navin agreed that he does not want the Task Force to be open to the charge that it is not funding its recommended changes. The 40-mill charge-off was identified as a savings to the state that could be used to provide the funding for recommended spending changes.
Mr. Mooney replied that it is his understanding that the districts the Task Force is trying to help are the ones that are hurt by the 40-mill tangible property tax charge-off. Mr. Navin stated that he does not think they are the same. Mr. Mooney opined that there is some overlap.
Mr. Zaino observed that there would be plenty of wealthy districts that would lose by this increase in the tangible property tax charge-off. Mr. Mooney answered that urban districts also have high levels of tangible property.
Ms. Shaner answered that there were statewide simulations done when the Revenue and Taxation Committee was trying to develop its recommendations, and the committee settled on this as one that spread things out across the state.
Mr. Brandt expressed support for the report recommending a 29-mill charge-off. He understands Mr. Zaino's point, but one thing the education group has been concerned with is that the 40-mill charge-off would make some school districts worse off under the proposed system than under the current one.
Mr. Zaino does not understand the problem. When this goes through the legislative process, the General Assembly will decide what the foundation levels are, and that will tell us where the disparities are. We are not recommending a new foundation level.
Mr. Mooney believes that it is a mistake not to recommend an increase in the basic aid amount. Implicitly, at least, we are saying that the foundation amount should increase by inflation. He likes the 40-mill charge-off, but is concerned that it will cause some districts to lose too much.
Mr. Church suggested that there is some logic to phasing up to a 40-mill charge-off. In the initial year, moving the real property charge-off down to 22 mills and the tangible property charge-off up to 29 mills is roughly neutral. Over time, if we have this growing 22-mill levy getting rolled back due to increases in property value that exceed the cap, if you were seeking neutrality, it would make sense to have corresponding increases in the tangible property charge-off.
Mr. Maxwell observed that he had been very excited about that recommendation when it was made. His assumption, however, was that this would save the state money that would then be rolled into the foundation to give the state aid to those districts that needed it. If raising the tangible property charge-off is only to save the state money that is unacceptable. If we raise the charge-off on tangible property we should recommend strongly that the savings go into the foundation.
Mr. Filipic stated that there appears to be strong agreement on principles but doubt on facts. If that is true we should redraft the recommendations with an emphasis on principles. We should state the goals that we were trying to accomplish. This Task Force is not going to be dictating the General Assembly's next education appropriations bill. However, if we can inform them relative to how all of our recommendations are interconnected, they will have better discussion.
Mr. Zaino agreed with Mr. Filipic. He would like a stronger statement regarding the tangible property tax, urging the General Assembly to consider eliminating it for the good reasons that have been discussed in Task Force meetings. Mr. Zaino does not believe that the tax reform recommendation represents the sentiment of the Task Force. Mr. Wilkins answered that this recommendation will be made stronger.
Mr. Mooney disagreed, not because he is against that idea, but if the Task Force is going to recommend eliminating a funding source we need to recommend replacing it with something: we have not done that. Mr. Wilkins replied that the report can simply point out the problems with the tangible tax.
Mr. DeMaria views the 40-mill tangible charge-off as a way of buffering school districts from potential reductions in tangible taxes. There needs to be a strong statement that expresses the need for a replacement stream of funding for the tangible property tax. They always have to be stated together.
Mr. Navin does not disagree strongly, but the current tangible property tax structure puts Ohio at a disadvantage relative to other states that do not have tangible property taxes. He is not too troubled by saying something close to "it should be abolished," but he is comfortable with what is already written.
Ms. Shaner opined that the Task Force is recommending a new way of funding schools and removing the tangible property tax would have a huge impact. We need something stronger that just a recommendation for a hold-harmless. We need a vision of how schools would continue without this revenue stream.
Mr. Brandt asked Mr. Zaino why he believes that the General Assembly would stop at a 29-mill charge-off for tangible property. Mr. Zaino replied that this is the path of least resistance. Mr. Burkland agreed with Mr. Zaino, but believes that the Task Force should recommend what it really wants. The Task Force should rally around a few principles that are stated strongly.
Mr. Marshall interjected that he was hearing a difference of opinion: some want strong principles listed, some want specific numbers listed. He asked the Task Force for guidance as to how specific to be.
Mr. DeMaria suggested that the report recommend increasing the tangible property charge-off to 29 mills because that is the level that is necessary to be revenue neutral. For the fifth recommendation, he would change this to refer specifically to the tangible property tax. There must be substantial reform to the tangible tax with a strong relation to how that funds schools.
Mr. DeMaria expressed concern that the draft report was too heavy on jargon: most readers would not be able to understand the Task Force's recommendations.
Mr. Burkland expressed concern relative to the linking of educational attainment and personal income. There is a relationship, but that does not mean that there is a relationship with a geographical area. Jobs are also important. What applies to Cleveland does not necessarily apply to Mansfield. Statewide statistics can mask reality. Cleveland Columbus and Cincinnati are doing well with personal income metrics. Smaller cities, such as Mansfield and Lima, are in trouble. We need to be more discerning when describing Ohio.
Mr. Harris opined that the report asserts that the value of higher educational attainment accrues to the individual, which would be true in the case of higher education, but he believes that most of the benefits from an elementary and secondary education accrue to the community and the state. All citizens gain from this.
Mr. Mooney stated that the obvious question that will be asked by many is, are we or are we not asking for an increase in state aid? What are we saying about that? If we do not agree on what to say about that, we are all going to say something different. Mr. Filipic replied that Mr. Mooney is saying that to increase state aid you must increase the per-pupil foundation level and that is not true. Mr. Mooney responded that he meant total state aid to education.
Mr. Filipic observed that the Funding for Success Committee concluded that there is a range of needs across the state, and that we should focus our efforts in those areas where the need is the greatest, instead of simply spreading more money across all school districts with no focus. He suggested that the report could mention that the recommendations would increase basic aid by a good inflationary number that the Task Force developed. There was not a unanimous decision on that, which is something that would probably never happen. It is probable that there will always be people who say we should be spending more.
Mr. DeMaria took what Mr. Filipic said as saying that the state would have to provide more money because of the new inflationary factors, the focus on poverty, data-based decision making, professional development and the continued phase-in of the special education weights. How fast that will happen is another thing, but the report does say that the state should spend more money.
Mr. Filipic noted that the Funding for Success Committee did not address the potential impact of a significant increase in the tangible charge-off. Maybe because of that there should be some foundational funding changes, not just a reliance on the targeted increases.
Ms. Shaner does not believe that the report precludes more spending, but that it leaves it up to the successor group: it depends on the information that is attained in the future. The Task Force did not look closely at the current special education weights. All of those elements should be things that the future group should examine.
Mr. DeMaria opined that Ohio needs to commit to increased productivity. However, that will only get us so far. The state needs to invest more money in education, but we do need to make sure that we are doing the best we can with our current resources.
Mr. Zaino likes the concept of putting more resources where they are needed. Not all school districts need more state funding. Mr. Brandt responded that, even if we agree that New Albany does not need more money that is not to say that they need less.
Mr. DeMaria agrees with Mr. Zaino's statement that Ohio needs to prioritize new funding to the areas with the greatest need.
Mr. Harris proposed that the descriptions of the financial problems facing school districts do not adequately describe the severe financial crisis that the state's school districts are facing. These problems need to be stated more clearly: class sizes are going up, teachers are being laid off and school districts are returning to the ballot too many times.
Mr. Burkland responded that recommending changes to school funding is tough stuff. He urged the Task Force not to have so many compromises that the substance of the work is lost.
Mr. Brandt believes that the report needs to include the phrase "phantom revenue" because it is a driving issue that has brought us all here. For his members it is important to say that the Task Force wants to fix phantom revenue.
Mr. Filipic opined that it is difficult to say what is happening with school funding. Taxpayers are paying more, or at least not less, in property taxes, funding per pupil is increasing (it is above or at national levels), but still, we have all sorts of problems. How we say that is difficult.
Mr. Mahoney responded that how you see the problem depends on where you sit. When he looked at the recommendations, he asked whether they would make things better. The answer was yes. There are shortcomings as well. Because we have insufficient data right now, does not mean that in the future we should be waiting to have this dialogue for a suit to be filed.
Mr. Harris stated that Ohio has always been in the middle in spending for primary and secondary education. He suggested that the question is what the state would be like if our children were in the upper tier of performance.
Mr. Mooney expressed concern about the impact of charter schools on funding. He suggested that the successor group should examine the effect of charter school funding on other public schools.
Mr. Stoff responded that the notion that dollars are being sucked out of public schools to support charter schools fails to recognize that those dollars are being drawn out by parents who want to send their children to alternative settings. There are two sides to this issue. There is a causal factor here. Parents are not satisfied with their public schools and so are taking their children out.
Mr. Brandt stated that, while it is too late for this report, someone could look at charter schools in the area of operations and efficiency. They have been producing poor results by and large, and this should be addressed.
Mr. Wilkins thanked the Task Force's staff for doing a great job. He asked that the Task Force break for lunch, then conclude its work.
Mr. Brandt offered his alternative recommendation relative to board member training, which supports the concept but keeps participation voluntary.
Mr. Stoff urged that the report say something about looking at school district consolidation. This is a controversial issue that was not examined in depth by the Task Force, but it should be mentioned.
Mr. Harris wants the successor group to examine technology funding. Ohio is not investing enough state money in this area.
Mr. DeMaria was pleased that full funding of parity aid and the special education weights were included in the draft report. He would like to see these as separate recommendations. Mr. Brandt agreed with Mr. DeMaria.
Ms. Bodary suggested that the staff should amend the document with the comments offered today, and then, add their comments in a different color so that everyone can see what the additional changes are before the report is finalized.
Mr. Maxwell remarked that the past 18 months have produced honest intellectual discussion and disagreement. The Task Force's recommendations will make a good beginning. He valued the fact that members were able to engage in that kind of dialogue. Others can build on this report and there are key points that we can take pride in.
Mr. Johnson agreed that the report of the Task Force is a very good document. He suggested that perhaps the fact that the members were able to engage in such meaningful dialogue might be the biggest accomplishment. There has not been this kind of discussion for some time. This was a good group of people put together. Mr. Johnson hopes that the discussions continue. He complimented the chair and the staff and everyone else who has contributed to this endeavor. The product is one that will contribute greatly to correcting some of the current school funding inequities.
Mr. Brandt expressed concern that someone might try to cull out pieces of the recommendations and not consider the report in its entirety. He suggested that the report include a statement that the recommendations are a package, not a menu from which to choose.
Mr. Navin echoed the comments of others who have commended the entire Task Force. He added that he really missed the late Chuck Gossett. Mr. Gossett did a tremendous amount of work. The Task Force could have used him further into the process. Mr. Navin offered a special thank you to Mr. Sobul and Mr. Church for their excellent assistance.
Mr. Davis endorsed Mr. Navin's comments. Without the support of the staff, we could not have gotten nearly this amount of work done. They were able to pull together a vast amount of information on whatever topic was requested. He very much appreciated what the staff has done. It made the job easy.
Mr. Stoff added that the Task Force is also in Chairman Wilkins' and Vice Chairman Hyre's debt, as this was probably the most difficult commission that he could imagine having to chair.
Mr. Wilkins adjourned the meeting at approximately 12:45.
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