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LEAVITTSBURG -- Public school officials and advocates say Ohio's education funding system is unfair, with the state's percentage of money decreasing, causing a heavy burden on property tax owners and impacting the quality of education.
A.J. Calderone, superintendent of the LaBrae Local School District, which hosted the Greater Western Reserve School Funding Forum at its high school, said: "You can't talk about fair school funding, you can't talk about income tax restructuring and property tax reform, you can't talk about vouchers or litigation efforts in state of Ohio in isolation. You have to talk about all of them together because all of these dovetail and impact one another and ultimately, they impact our children, they impact us as property owners, as citizens. So when you talk about changes in the state of Ohio's policy, you've got to talk about all of them together because they are interconnected."
Katie Johnson, executive director of the Ohio Association of School Business Officials, said Ohio is 42nd in the nation in terms of providing state taxes per capita for schools while it is eighth in property taxes paying for education.
"It is a policy decision over the last 20 years that reduced the state's percentage of school funding," Johnson said.
That includes the 2005 decision to phase out the Corporate Franchise Tax, the state's corporate income tax, and the Tangible Personal Property tax on machinery, inventory and fixtures. The elimination of the taxes drastically reduced localized tax revenue streams that public schools had relied upon and shifted the burden to residential property tax owners, Johnson said.
To replace those two taxes, the state enacted the Commercial Activity Tax in 2005. Johnson said that levied a low-rate tax on gross business receipts in the state. Subsequent legislation scaled back CAT by raising the taxable threshold to exclude the first $6 million in gross receipts, which reduced taxes paid by small and midsized businesses so the money was lost for public education, Johnson said.
In 1975, businesses paid 53.9% of local school taxes in the state to 46.1% for homeowners and farmers. In 2023, businesses paid 32.5% of local school taxes in Ohio to 67.5% for homeowner and farmers.
That is in addition to the state reducing income taxes to one 2.75% tax bracket so the rich pay less taxes.
Terry Armstrong, treasurer of the Lakeview Local School District, said the phasing out of the TPP has been "catastrophic" to school districts and greatly shifted the burden to residential property taxes.
"The spending (by school districts) isn't out of control," Armstrong said. "It's the shift in taxes. That revenue was replaced by local taxpayers."
Ryan Pendleton, a founding member of the state's Fair School Funding Workgroup, said the state's portion of paying for public school funding fell from 42% in 1999 to 38% in 2025 and will drop to 32% in 2027.
"Fully funding the formula is an immediate form of property tax relief because as the state pays less of that share then you burden more, which is what we've seen," Pendleton said.