FORM SF3 OHIO DEPARTMENT OF EDUCATION

Understanding Ohio’s School Funding System

Funding schools in Ohio is a partnership between the state and the local school district. The following is an explanation how the state funds K-12 education for operating expenses. Ohio’s funding formula is very complex and difficult to understand. The complexity has resulted from trying to address the varying needs of all of Ohio’s 613 school districts. The demographics between districts creates a very challenging and evolving program to provide an equitable and adequate education program throughout Ohio.

I always like to remember that wherever the funds come from, all funds originate from the taxpayers of Ohio. Funds from the state are generated from income taxes, sales tax, lottery and federal transfer payments. Local funds originate from real estate property taxes and tangible personal property taxes on business. Therefore, Ohio does have a “mix” of funding sources from all the different taxes paid by Ohio’s taxpayers.

The funding formula distributes funds to districts based on the local districts ability to fund their programs. This is determined by the resources available in the districts and the number of pupils they have. Property valuation accounts for the resources available. The local share towards the basic foundation amount is 23 mills of the property valuation.

Ohio’s funding formula each year establishes a basic foundation amount, which is a benchmark figure to establish the local share for the foundation amount. Currently the amount is $5283 per student which has been increasing 2.2 percent per year.

For a simple explanation the $5283 per student is multiplied by a cost of doing business factor and the number of students (ADM), to determine the total foundation amount, plus additional programs, such as the new building blocks program and aid guarantees from the state. The local share is calculated by deducting 23 mills of their property valuation. A flaw in the system is the formula accounts for increased property valuations if property values increase after reappraisals, thus increasing the resources available to the school districts from local sources, but most of the potential increase has to be approved by the voters. Simply put the formula “assumes” increased local revenue, but the reality is the voters must pass a new levy, if not that is where the term “phantom revenue” is derived. Ohio’s Constitution allows for only the first ten mills of property taxes (inside millage) to be levied without an affirmative vote of the voters. Another exception is if a district is at the 20 mill floor the dollar amount will grow as property values increase.

In addition to the basic foundation amount additional funding includes Parity Aid, special education, transportation, career/adult ed., poverty aid and gifted aid. Also included are other adjustments such as open enrollment and so on. The following is an SF 3 report for Ashland City Schools that illustrates how the formula works and the many different funding provisions.

In addition to the SF 3 funding report the state also reimburses school districts for the 10 percent property tax rollback and homestead rollback that is deducted from your property tax bill.

The following is a link to the Ohio Department of Education that explains Ohio’s school funding program in more detail.

Click here for School Funding In Detail Report and SF 3 Line By Line Explanation

Click here for K-12 Education Per Pupil Data

An example of a SF 3 Report

FORM SF3           OHIO DEPARTMENT OF EDUCATION-DIVISION OF SCHOOL FINANCE      DATE 05/14/2006

                           (FY 2006 JULY NO 1 PAYMENT, [PROJECTED])

03-0030-1  ASHLAND CITY S.D.                               ASHLAND COUNTY            IRN:043505

                 ADM                             KDG              1-12             Total

1A.  Special Ed Category 1                      8.24             29.87             38.11

1B.  Special Ed Category 2                      0.00            357.79            357.79

1C.  Special Ed Category 3                      1.03             23.38             24.41

1D.  Special Ed Category 4                      0.00              1.03              1.03

1E.  Special Ed Category 5                      1.03             15.45             16.48

1F.  Special Ed Category 6                      0.00              6.18              6.18

1G.  JVSD,JVSD Spec Ed                           N/A            133.80            133.80

1H.  Non-Jnt OE JVSD,JVSD Spec Ed                N/A              0.00              0.00

1I.  All Other Students                       244.88          2,728.00          2,972.88

1J.  MRDD                                        N/A              0.00              0.00

2.   Total                                    255.18          3,295.50          3,550.68

3.   Formula ADM K*.5+(1-12)Total-(.80 Line 1G JVSD)+(.20 CVOC-RES)             3,316.05

                                                                        Adjusted Student Count

4A.  Assessed Valuation                                     468,609,109.00

4B.  Recognized Valuation                                   468,609,109.00

4C.  Adjusted Recognized Valuation                          468,609,109.00

4D.  Adjusted Recognized Valuation * .023                    10,778,009.51

5A.  5,283 * 1.01980 * Line 3                                              17,865,562.25

5B.  Add On Building Blocks                                                   132,623.42

5C.  Formula Aid Guarantee Add On                                             306,474.05

6.   Total Formula Aid (5A + 5B - 4D + 5C)                                         7,526,650.21

7.   State Share % (Line 6 / (Line 5A+5B))   41.82

8.   Special Education Weighted Amount                                               548,850.66

9.   Career-Tech/Adult Ed. Cat1 FTE:      36.39 Cat2 FTE:      59.54                  93,256.69

10A. Number of Classroom Teachers                                                           .00

10B. Training & Experience of Classroom Teachers (50% of Total)                       43,273.97

10C. Educational Service Personnel                                                          .00

11.  Total Poverty Based Assistance (PBA) Including Guarantee                         44,134.83

12.  Gifted Aid                                    Units:      2.90                  106,103.75

13.  Total State Basic Aid (Lines 6+8+9+10A+10B+10C+11+12)                         8,362,270.11

14.  Transportation                                                                  552,865.49

15.  Excess Cost Supplement                                                                0.00

16.  Parity Aid                                                                      390,464.88

17.  Total State Basic Aid Plus Lines 14, 15 and 16                                9,305,600.48

18.  Reappraisal Guarantee  3317.04                                                        0.00

19.  Charge-Off Supplement (GAP)                                                           0.00

20.  Transitional Aid Guarantee                                                      142,889.94

     Additional Aid Items

21A. Preschool Clrm Units:          2.00  Related:      0.00                          94,274.86

21B. Special Ed Transportation                                                        47,231.18

22.  Total State Foundation Aid (Line 17+18+19+20+21A+21B)                         9,589,996.46

     Transfers and Adjustments

23A. ESC Deduction                                                      129,522.04

23B. Community School Transfer                                         -127,719.01

23C. Open Enrollment Adjustment                                          46,671.68

23D. Other Adjustments                                                    1,301.19

24.  Total Funding (Line 22 + 23A through 23D)                                     9,380,728.28

25A. Disclosure Items:   Spec Ed FTE * 5,283 * C.O.D.B.             2,364,349.75

25B.                     Voc  Ed FTE * 5,283 * C.O.D.B.               516,832.79

25C.                     Regular Student Population            2,776.42

25D.                     Resident Contract Voc (CVOC-RES)          0.00