Meeting Schedule, Agendas and Minutes
December 18, 2003 Minutes
Chairman William W. Wilkins called the fifth meeting of the Governor's Blue Ribbon Task Force on Financing Student Success to order shortly after 10:00 a.m. Also in attendance were Vice Chairman James Hyre, Ted Adams, John Brandt, Eric Burkland, Chuck Calvert, Fred Church, Walt Davis, Paolo DeMaria, Matt Filipic, Bob Gardner, Chuck Gossett, Christine Hansen, Bill Hartnett, Russ Harris, Jeff Jacobson, Tom Johnson, David Locke, Jim Mahoney, Dick Maxwell, Tom Mooney, Dan Navin, C.J. Prentiss, Barbara Shaner, Jennifer Sheets, Barbara Sprague, Richard Stoff, David Varda, Dan Wilson (representing Susan Zelman) Scott Williams, Dennis Woods and Tom Zaino.
Presentation:
- Governor's Blue Ribbon Task Force (PDF*, 175 KB)
-William W. Wilkins, Chair
-James Hyre, Vice Chair
Chairman Wilkins thanked all Task Force members for their hard work and participation and noted that the committees are making good progress in fulfilling their responsibilities. Mr. Wilkins reviewed briefly the work of the full Task Force and what has transpired since the Task Force's last meeting. He stated that the purpose of the meeting was to give everyone a chance to learn what is going on in the other committees, as well as to provide input into what the other committees are doing. These minutes do not duplicate information that was included in the presentation distributed at the meeting. This document is posted on the Task Force's website at http://www.ohio.gov/blueribbontaskforce.
Revenue and Taxation Committee
Committee Chairman Chuck Gossett and Vice Chairman Dan Navin provided a list of the committee's five guiding principles as it works to improve Ohio's school tax structure (simplicity, equity, stability, neutrality and competitiveness) and reviewed what the committee has learned through a series of presentations.
Mr. Gossett and Mr. Navin then listed seven emerging issues:
- Role of the property tax in the funding mix
- Complexity/credibility of current system
- Balance between state and local shares
- Predictability/reliability of revenues
- Phantom Revenue
- Competitiveness
- Revision of the reappraisal/update system).
In closing, Mr. Gossett and Mr. Navin described two significant plans (from the Ohio Department of Taxation and the Ohio School Boards Association) that had been reviewed by the committee that would provide for 20-mill statewide property tax collection and discussed the committee's next steps at its meetings in January and February.
Both Chairman Gossett and Vice Chairman Navin emphasized that the committee is not limited to the proposals that were described in the presentation. The committee has only agreed that these options are worthy of further review. It is very possible that new or different proposals could be examined and adopted by the committee. The committee has only recently gotten into the details of the problem with the current school revenue-generating system.
There was considerable discussion among Task Force members of the work of the Revenue and Taxation Committee. Senator Jacobson expressed concern that any solutions recommended by the Revenue and Taxation Committee that address the issue of phantom revenue would benefit wealthier school districts disproportionately, since they lose more money from phantom revenue. He fears that addressing phantom revenue does not promote funding equality. Chairman Gossett responded that the Revenue and Taxation Committee needs to work together with the Funding for Success Committee, since the Phantom Revenue issue spans the work of both committees. He also stated that his committee is only exploring how to generate revenues. The Funding for Success Committee will determine how to allocate the revenues.
Senator Gardner asked whether the committee had looked at the possibility of freezing property tax rollbacks or amending the H.B. 920 limits on increases in property tax revenues. He added that he was not suggesting that these changes be made. He was simply raising the question. Chairman Gossett responded that the committee will look at these issues, but had not yet done so. Mr. Navin noted that part of the Department of Taxation's plan was to eliminate the 10% rollback on commercial and industrial real property taxes.
Mr. Harris opined that Ohio should consider annual reappraisals of residential and agricultural property, using a compute model, as some other states have done. He also stated that Ohio should institute "circuit breakers" to protect the elderly. Mr. Church cautioned that there are pitfalls with circuit breakers (which serve to limit taxpayers' liability, as the name implies) and that this topic needs more discussion if the committee wants to pursue this idea.
There was a general discussion among Task Force members regarding the current school funding formula and what should be done to improve it. Committee members differed in their opinions of how well the current school funding model works. Some felt that the current model works reasonably well and some opined that the system is broken. One member noted that the Revenue and Taxation Committee must rely on the work of the Funding for Success Committee to complete its work.
Mr. DeMaria asked if the committee is trying to get consensus around only one idea. He noted that Michigan developed two different proposals and left it up to the voters to choose one of those options. Mr. Gossett replied that the committee has not honed in on a single option yet. The committee has discussed that there will probably be a need to go to the ballot for a constitutional proposal because there are fundamental changes that are being proposed. Nothing has really been decided yet.
Mr. DeMaria remarked that, in other states, voters are not simply presented a tax issue, without understanding what it will buy. He asked if the committee is looking at anything like that. Mr. Gossett responded that, if the state funded the cost of an adequate education, it would be easier to explain to the voters that a particular levy would be used for something beyond a basic education. There was additional discussion of the merits of having electors vote on programs rather than just dollar amounts.
Operations and Efficiency Committee
Chairman Davis described the work of the Operations and Efficiency Committee, including preliminary recommendations. Mr. Davis also mentioned the issues that will be considered during the committee's meetings in January and February. Mr. Mooney expressed support for the committee's preliminary recommendation to consider regional or statewide purchase of health care insurance. Mr. Mooney asked why school district consolidation was not considered by the committee. Mr. Davis replied that there are conflicting data on the potential benefits of consolidation. The committee has been told that 612 districts are too many to be efficient. However, the first presentation to the committee was from someone who told the committee that there was a strong negative correlation between the size of a district and student performance.
Mr. Baker cautioned Task Force members about consolidating school districts. In his experience, after a consolidation, costs go up and student achievement goes down. He believes that the best school districts are small country districts.
Mr. Mahoney opined that you have to look at efficiency and effectiveness. You cannot look just at efficiency, because you can be efficient and not be effective.
Mr. Stoff feels that this committee should not limit itself to consolidating health care. He feels that perhaps the consolidation of educational components should be left alone, but that the generic business functions of school districts could be consolidated.
Vice Chairman Hyre observed that we have to get out of the mindset that every district has to provide every service. We can have people who are shared between districts, especially small ones. Senator Gardner stated that there was a tremendous savings in Lake County by consolidating the purchase of not only health care, but other services and supplies as well. It was so successful that local governments wanted to get involved as well. There was additional discussion of the potential benefits of the consolidation of some business functions. Task Force Chairman Wilkins noted that some functions could best be performed at the local level, but others could be completed better centrally.
There was a discussion of governance, specifically the committee's suggestion that all school board members receive ethical, legal and operational training. Mr. Brandt expressed his concern that ethics training is required for school board members but not for other public officials. It is the funding system, not the school boards, which needs to be reformed. We need to be clear in what we are supposed to be doing. Mr. Adams opined that we should be looking at all aspects of school funding, which includes governance.
Chairman Wilkins suggested that one area we could look at is the benefit of conducting management training at the regional or state level. Teachers are critical to student success, but principals are equally important. Mr. Wilkins suggested that we look at a better way of helping small- and medium-sized districts with their management needs. He feels that teachers should also have a career path other than simply the possibility of becoming a principal or superintendent.
Senator Prentiss expressed her frustration over lack of funding of the recommendations of the Governor's Commission for Teaching Success. This commission has already dealt with many of these items being discussed, but we were not able to fund the recommendations. She asked if the Operations and Efficiency Committee is taking into consideration funding when it makes recommendations. Mr. Davis replied that the committee plans to look at the report of the Governor's Commission on Teaching Success. The committee will highlight items that members would like to stress and refer them to the Funding for Success Committee. Mr. Woods noted that committee members recognize that these items will cost more, but at this time we have not talked about who is going to pay for it.
Representative Hartnett opined that one of the problems the Task Force is having is that we are trying to affix blame for things. People in education are sophisticated enough to put the right people in positions of leadership. Nothing in Ohio is as sophisticated as teaching children. We should not be nitpicking the system. We should be figuring out how to fund it.
Funding for Success Committee
Chairman Filipic summarized the presentations that have been made to the committee and listed the emerging issues that the committee will address (funding allocation models, determining adequacy, analyzing success in school districts with high percentages of poverty, student achievement versus student progress, effective deployment of resources and the cost of No Child Left Behind). The key issue for the committee is the level of funding that is necessary to address the needs of disadvantaged students if the students' district is well managed and resources are deployed effectively.
Mr. Filipic noted that, by process of elimination, the committee seems to be headed for an input-based model, although there are some problems with that option as well. Determining the inputs is very difficult, and then you might be missing out on some tradeoffs among inputs which might be as good as the ones you used in your funding model.
Senator Gardner expressed his concern that the committee thinks we should scrap the current plan because it does not seem to be working. He noted that other states are using Ohio as a model. He believes that the current system might be rethought and tweaked, but not scrapped.
Senator Prentiss opined that Ohio's current school funding formula is not working. She believes that merely tweaking the current school funding system does not meet the Governor's charge to the Task Force.
The Task Force members engaged in a general discussion of the merits of using different types of funding models, including the use inputs. The importance of preschool education was discussed at some length, including the potential cost of a more extensive system of preschool education. There was a concern that targeting very large amounts of state funding to this purpose might not allow us to address other concerns that have been identified.
Mr. Woods observed that it will be very expensive to meet the requirements of No Child Left Behind (NCLB), especially the costs of the required interventions. Senator Gardner believes that Ohio is ahead of the rest of the country in addressing the demands of NCLB. He opined that all 50 states are grappling with this law and that Ohio is ahead of most other states. Senator Gardner added his belief that Ohio's current school funding formula is not flawed, but it may not be funded sufficiently. He does believe that Ohio has made significant improvement over the past several years in how its schools are funded.
After considerable discussion of the merits of different school funding models and varying opinions of how these models should be constructed, Chairman Wilkins expressed his view that many Task Force members are saying the same thing from different perspectives. He explained that he was opposed to commissioning another adequacy study because we should focus our efforts on how to bring the disadvantaged up to speed. He observed that we have heard from several school districts that have been able to make improvements in student success without an ideal mix of students. We should look outside of the basic formula to find out what it will take to bring the disadvantaged students up to speed. The Disadvantaged Pupil Impact Aid program does not seem to be doing the job. We have not ruled out the current successful schools model, but we want to look at the inputs of successful schools at the very least for the sake of comparison.
Mr. Mooney expressed his preference for a weighted-pupil approach for meeting the needs of economically disadvantaged children. We should attach money to students that approximates their needs.
Mr. Filipic expressed his opinion that we should not be prescriptive, but instead decide who needs more resources and then get those resources to them.
Vice Chairman Hyre asked Dan Wilson of the Department of Education about the status of the Department's analysis of the costs of No Child Left Behind. Mr. Wilson stated that a draft analysis is being evaluated by national experts. The analysis should be ready to share with the Task Force by the end of January.
This concluded the discussion of the work of the Funding for Success Committee. The last item on the agenda was a discussion of the next steps for the Task Force.
Mr. Harris noted that a very large number of school districts are in dire financial straits. He would like to bring in representatives of some of these districts to the Task Force to better understand what their financial problems are.
Senator Prentiss would like for the Task Force to look at ways to take the pressure off of school districts to constantly be returning to their taxpayers for additional funding.
Senator Jacobson would like for the Operations and Efficiency Committee to discuss the cost-of-doing-business factor to determine if there is an argument that there is a significant difference in the cost of business among different parts of the state and whether this brings operational efficiencies.
Chairman Wilkins adjourned the Task Force at approximately 3:00 p.m.
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