Steve Dyer’s new Innovation Ohio report on Ohio’s FY 2020-20121 state budget begins: “When Governor Mike DeWine signed HB 166 into law, he approved a budget that lawmakers had packed full of little-noticed gifts to those who seek to erode support for traditional public schools through a proliferation of charter and private school options funded at taxpayer expense.” He continues: “This is just the latest in a series of expansions of vouchers in Ohio law. The state has been on the front lines of the private school voucher fight for two decades.”

One of the ways vouchers were expanded in this budget is that, while in the past, all students except those entering Kindergarten must have been enrolled during the previous school year in the public school district from which the student seeks to carry away a voucher to a private or religious school, the new budget bill erodes this protection for public schools. The Ohio Association of School Business Officials (OASBO) explains: “Generally, students wishing to claim a voucher under the original EdChoice voucher program must have attended a public school in the previous school year. However, HB 166 codifies in law… (that) students going into grades 9-12 need not first attend a public school. In other words, high school students already attending a private school can obtain a voucher.” This change in state law means that Ohio’s public school districts will now be subsidizing the education of many students, primarily those in religious schools, who have never intended to use the public schools.

But the implications of the new state budget voucher expansion are not merely because a new group of students will be awarded vouchers. A new white paper (Executive Summary or Full Report), released this month by the Heights Coalition for Public Education and written by the Ohio Federation of Teachers’ Darold Johnson and the Heights Coalition’s Susan Kaeser and Ari Klein, digs deeper by exploring new, and very inequitable fiscal implications across Ohio’s 610 school districts of the new budget’s expansion of vouchers.

In its new report, the Heights Coalition explains how Ohio’s four statewide voucher programs are funded: “The most recent program, EdChoice Expansion, is funded directly by the state as a line item in the state budget. The Jon Peterson, Autism, and EdChoice programs are funded by the deduction method. The deduction method counts voucher students as if they are enrolled in the district where they reside. They generate the same amount of state funding for their district of residence as do public school students. The cost of each voucher is transferred from that district’s state funds to the private education provider.”  According to the Ohio Department of Education: “The EdChoice scholarship amount is currently $4,650 for grades K-8 and $6,000 for grades 9-12.” (Emphasis is mine.)

To qualify for an EdChoice voucher, a student must live in the attendance zone of one of Ohio’s “EdChoice designated schools.”  Public schools whose attendance zones qualify for EdChoice vouchers are identified by a complicated state performance index based largely on the school’s aggregate standardized test scores. Last January, the Plain Dealer‘s Patrick O’Donnell reported that in the 2018-19 school year, 218 schools had been identified where students could qualify for an EdChoice voucher. O’Donnell explains that beginning in September of 2019, “that list of ineffective schools balloons to more than 475.”  And the Ohio Department of Education recently designated hundreds of additional schools where students will qualify for EdChoice vouchers next school year in 2020-2021.

But there is a hitch that makes the impact of Ohio’s EdChoice vouchers inequitable.  Some school districts don’t receive as much per pupil funding from the state as the per-pupil voucher amount deducted from the school district’s budget when a student takes the voucher to a private or religious school. The Heights Coalition explains how some school districts are harder hit than others by the cost of EdChoice vouchers: “Because state funding is driven by property wealth, high wealth districts receive less state support per pupil, and districts with low wealth receive more.  High wealth districts receive less funding per student, so more of the cost of a voucher is unfunded compared to low wealth districts.”

However, a problem arises because a number of so-called high wealth districts are deemed “high wealth” merely because they are located in metropolitan counties where property valuations are higher in general. These are not school districts filled with million dollar mansions; neither do they serve masses of wealthy children. Some of them have large populations of very poor children with high needs.  Because these districts receive less state aid per pupil than a school voucher is worth, vouchers cost such school districts relatively more than the same vouchers cost other school districts. The Heights Coalition continues: “High wealth districts receive less funding per student, so more of the cost of a voucher is unfunded compared to low wealth districts.”

It immediately becomes clear why the Heights Coalition is exploring this issue: “In FY 2019, the Cleveland Heights-University Heights (CH-UH) School District enrolled 5,111 students of whom 81% are considered to be economically disadvantaged… The CH-UH district is one of only 9 high wealth and high poverty (50% or more of students are economically disadvantaged) districts in Ohio.  It has a disproportionately high number of vouchers compared to its enrollment and compared to most districts.  Additionally CH-UH receives a moderate amount of state funding. In FY 2019, the CH-UH district transferred $7.36 million of its state funding to nonpublic schools for 1,132 voucher students.  This was 34.6% of its state aid, up from just 7% three years earlier. This is the second  largest share of any district in Ohio.”

In actuality, the problem is worse in the current 2019-2020 school year year because state funding for CH-UH is capped in the new state budget. The district’s state funding is frozen at last year’s level, but 600 new vouchers are being deducted from CH-UH this school year, with only 25 of them for students who were previously enrolled in the district. That means that the CH-UH district will not receive any additional state funding this year to cover the new vouchers being carried out of the district’s budget to private and religious schools. In its new report, the Heights Coalition explains: “At a minimum, the unfunded cost of vouchers for FY 2020 will be… an increase of $2.92 million in one year. This is not sustainable.”

The Heights Coalition continues: “When state funds shrink, districts have two options: cut expenses or raise more money by seeking voter approval for an increase in local property taxes. The loss of funds to vouchers has become so costly that during FY 2020, the CH-UH district will turn to voters to solve the budget shortfall. The community already taxes itself at one of the highest rates in the state. Voters who do not support the use of public funds to pay for religious education will balk at approving a levy that is needed to fill a deficit created by state-imposed voucher costs.”

The Ohio Legislative Service Commission (LSC) provided data for the Heights Coalition report. LSC confirms that 31 Ohio school districts transferred 10 percent or more of their state aid to private schools for vouchers in 2019.  Greater Cleveland is especially affected with roughly half—15 of Cuyahoga County’s 31 school districts— losing at least 10 percent of their state aid to vouchers. The Heights Coalition explains: “The cost of a voucher is set by the legislature and is the same in every school district.  But the state funding per pupil varies by district. This means the impact on public school students will be different depending on voucher use and per pupil (state) funding.”

The Heights Coalition proposes that in the short term, compensatory state aid be provided to school districts which lose more than 10 percent of their state revenue to voucher deductions: “Allocate additional state funds to districts where unfunded voucher costs… are greater than 10 % of that district’s state aid.”

The Heights Coalition suggests the legislature also adopt the longer-term solution that is already part of the proposed Cupp-Patterson School Funding proposal: “End the deduction method for funding vouchers.”  EdChoice voucher students should not initially be counted as though enrolled in their local school district, and the cost of their voucher would not then be deducted from the school district’s budget. These students should simply have their voucher awarded directly by the state out of a line item appropriated in the state budget.  This is, by the way, the way Ohio already funds another of its voucher programs—EdChoice Expansion.