School leaders concerned about Ohio House substitute budget bill

CINCINNATI - The substitute budget bill from leaders of the Ohio House of Representatives Thursday included provisions to modify the school funding plans in Governor John Kasich $55 billion two-year measure.

Mike Mays, Treasurer and Chief Financial Officer of the St. Bernard-Elmwood Place City Schools, said it appears to be the same deck of cards shuffled in a different manner.

"When the Governor presented his budget originally one thing he indicated was that he was not going to increase taxes," Mays said. "If we have a set amount -- and we sort of know where we're at right now -- and somebody gets more, that means somebody has to get less."

St. Bernard-Elmwood Place City Schools currently have 1,000 students enrolled, but Mays said it's a district that faces a number of significant challenges.

"When you look at the number of schools in the State of Ohio -- over 600 -- we're listed at number 30 as one of the poorest districts," Mays said. "We're listed at number seven in the percentage of special education students that we have and both of those things are costly."

Mays said the district spends over a $1 million more than it receives in special education money.

"That's what we call an unfunded mandate," he added.

The district's annual budget currently is $11.5 million with state funding covering $2.8 million of that amount. Under Governor Kasich's plan, state support would decline $93,000. In addition, $200,000 in federal stimulus money isn't being renewed and the phase-out of the tangible personal property tax is being accelerated. That's an additional $226,000 St. Bernard-Elmwood Place won't be getting.

"The total loss is going to be about $524,000," Mays said. "The one that nobody expected was the loss of tangible personal property tax revenue."

That's a tax on machinery and equipment for businesses like Procter & Gamble, the St. Bernard Soap Company and the J.M. Smucker Company, all of whom have large facilities in St. Bernard.

Tax revenue from the tangible personal property tax was supposed to be guaranteed until the end of 2012, according to Mays, but Governor Kasich decided to change the program.

"It's a form of money," Mays said. "If they don't have to give us $226,000, then they have $226,000 to do something with."

No major cuts are planned in district spending right now because Mays said reductions have been made by taking steps such as not filling vacant positions. Open enrollment has brought in an extra $800,000.

The last time voters approved new property tax dollars for the schools was in 2006, but Mays said the recession has made the likelihood of passing a new levy very difficult.

What does the future hold for St. Bernard-Elmwood Place City Schools?

"It's looking as if we're going to have less money, our revenue is going to be decreasing and our expenses are going to be increasing, which is a difficult situation," said Mays. "We're already with the cuts at a break even."

Hearings on the substitute House bill begin Friday before the Appropriations Committee. A vote could come next week to sent the measure to the Senate.

Ohio Senate President Tom Niehaus of New Richmond said he expects the Senate to vote by the first week in June and then a conference committee will be convened to work out differences. A final bill must be approved by June 30th.