The new school formula, pieced together the past three weeks and finalized during numerous private meetings throughout the weekend, was approved 21-11 by the Senate and 75-22 by the House in a rare Sunday night session.
School funding plan:Here are the highlights of the school funding plan pending before the Ohio General Assembly:* Voters would be asked to OK a one-half cent increase in the state sales tax, which is now 5 cents on every dollar. The tax increase would generate about an additional $550 million a year for schools. * Most of the money would initially go for school-building construction and renovation and later be shifted to operating costs. * Property owners would get a 10 percent cut in property taxes - but the maximum reduction would be $100. This would cost the state $236 million in revenues. * The state would guarantee that the amount spent each year per pupil in each of the 611 school districts would be raised over four years to $4,414. It is now $3,663. * Schools in poor areas and big cities would get extra money to pay for smaller class sizes in the first three grades and all-day kindergarten. * The state would pick up a greater share of transportation costs for districts. The state now pays 38 percent of a school district's transportation costs. That would be raised to 50 percent next year and 60 percent by 2002. * Special-education programs would get a 47 percent funding increase, to $942 million for the next school year, from the current $638 million. * Businesses with large inventories, such as car dealers and manufacturers, would benefit under a plan to reduce the tax on business equipment and inventory from 25 percent to 15 percent over 10 years. The state would lose about $25 million the first year. * Businesses with little inventory, such as apartment building owners and dry cleaners, would lose under elimination of a provision that now has the state paying 5 percent of their commercial property tax. That would raise about $103 million a year for schools. * Districts with lower-than-average property valuation would receive a state-paid bonus over four years because their real-estate taxes do not raise adequate revenues to pay for the increased per pupil funding. * All districts would be guaranteed as much state aid next school year as they get in 1998. State aid increases would be capped at 10 percent per district for four years. In 2000, state aid could start decreasing if enrollment decreases. * Beginning in 2000, each district would get a 10 percent bonus to be used for gifted programs. * Pupils in comprehensive vocational education programs would be funded through the per-pupil basic aid formula, and not vocational units. This worries some educators that non-joint vocational districts would be jeopardized. * Voters could approve 5 mills of real-estate taxes that could increase with inflation. The constitution now prevents inflationary increases. * Local school boards could, without first going to the voters, implement a 1 percent income tax in exchange for reducing local property taxes by a like amount. The benefit to schools is that income taxes go up with inflation. - Tim Miller
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And the one-half cent increase in the state sales tax is clearly in trouble.
`Tomorrow's a new day, and we've still got a lot of work to do,' said Senate President Richard Finan, R-Cincinnati.
He and House Speaker Jo Ann
Davidson, R-Reynoldsburg, said private meetings would begin anew again today in hopes of reaching agreement on the tax issue.
The tax is being held up by conservative Republicans who oppose any new taxes and other lawmakers who believe the entire package falls well short of meeting the court's request for a new plan less reliant on local property taxes and that more fairly distributes money to all 611 school districts.
The overall school funding plan is contained in two parts: House Bill 650, which carries the formula changes as well as $5.2 billion in primary and secondary school funding for the next school year, and the resolution containing the tax hike.
The bill needed only a simple majority in each chamber to pass. However, the Republican leaders want to put the tax issue on the May 5 ballot so voters can sign off on it - and that takes a two-thirds vote in each chamber. The deadline for placing issues on the ballot is midnight Wednesday, prompting the rare flurry of activity in the Statehouse on a weekend and the continued pressure on the lawmakers the next two days.
The Republicans hold 60 of the 99 seats in the House - the exact number needed to put the resolution on the ballot. But the opposition by the conservative GOP members prompted Finan and Davidson to shop for votes by making changes to HB650.
A conference committee that prepared the final version of HB650 for the floor votes stripped out two amendments added by the Senate that were designed to allow inflationary growth in some property taxes and allow local school board to swap a 1 percent income tax for a like amount of property taxes.
Both items, supporters said, helped meet the court order to reduce dependence by schools on local property taxes and allow school district income to grow with inflation. But many lawmakers were troubled by the fact that local voters would not first get to OK the income tax swap.
The item allowing inflationary growth on 5 mills of property taxes with prior voter approval - which has been pushed hard by state Rep. Donald Mottley, R-West Carrollton - appeared to have less opposition, but conservative Republicans wanted it out and it was removed.
Mottley was furious about the removal of his amendment and voted against the bill. The vote in the Senate was strictly along party line. The Democrats were angered by removal of the income tax swap language.
`This bill was like a quilt carefully crafted of many pieces,' said Sen. Linda Furney, D-Toledo. `This amendment rips out a major piece and leave a gaping hole.'
The conference committee picked up some support for the bill by amending it to transfer $10 million from the lottery reserve fund to vocational education programs, bringing the total amount in the bill to $17 million. Should voters approve the tax plan, vocational schools would also get another $5 million. Many lawmakers had heard complaints from vo-ed schools about the bill, prompting the change.
The plan also includes a series of budget cuts for state agencies and about $230 million in property tax relief.
The legislature must change the way schools are funded because of an Ohio Supreme Court ruling last year. The court gave the state until March 24 to come up with a plan that makes funding more equal among districts and ends an over-reliance on property taxes.
Whatever plan is adopted by the legislature must still go back to the original trial judge in the case in Perry County and eventually to the Supreme Court.
* DEBRA JASPER of the Columbus Bureau contributed to this story.