Understanding school funding: House Bill 920
No matter where you live in Ohio, regardless of whether or not you have children or whether or not they attend public schools, you will be asked to vote periodically on a local school levy. You might as well understand why.
House Bill 920, the Ohio law that outlines how public schools are funded, is complex and confusing. But it has a huge impact on all of us.
H.B. 920 was passed in 1976, during a period of unprecedented inflation. Home values were soaring every year, sometimes by double-digit percentages, and property taxes were growing at the same alarming rate. The state legislature attempted to lessen the burden on homeowners by freezing the dollar amount paid to school districts and libraries at the 1976 level; not at the rate or percentage, but at the actual dollar amount.
To better understand the ramifications, let’s break this down with numbers:
Imagine you own a $100,000 house and pay 5 percent to your local and county government, and an additional 5 percent to your public schools, in taxes each year. After three years, the value of your house is reevaluated and determined to be $120,000. The money that goes to city and county government automatically rises to $6,000 from the original $5,000, because the rate stays the same.
However, money that goes to your public schools stays at $5,000 because the county auditor comes in and readjusts your effective tax rate from 5 percent down to 4.2 percent, as prescribed by H.B. 920.
Imagine that this goes on for 10 or 20 years. After a while, your house has increased in value up to $250,000, and your local government now receives $12,500 in taxes annually. Because your rate stays the same, cities and counties are able to go years, decades even, without asking for a tax increase.
But your school taxes have stayed at $5,000; now just 2 percent of the value of your home.
School costs—from teacher salaries to textbooks to gas for school buses—have gone up over that 20-year period, but schools are not receiving a single dollar more in tax revenue. No matter how conservative or efficient districts are with taxpayer money, they simply cannot keep up with those day-to-day cost increases without asking for additional revenue from a levy.
Jayne Geneva, a longtime Cleveland Heights resident who is also a lawyer specializing in small business and real estate law, and a school-funding activist, said, “We, as a school district, cannot raise any more money if we don't add more millage to our tax burden. The dollar amount will always remain the same. Period.” She reiterated that repeat school levies are not a sign of inefficiency, waste or lax oversight on the part of districts. They are a direct result of state law.
Krissy Dietrich Gallagher
Krissy Dietrich Gallagher is a longtime resident of Cleveland Heights, a graduate of the Heights schools and a former Coventry School teacher. She is a freelance journalist under contract with the CH-UH City School District, and was asked to write this article by the district's communications department, as part of its Strategic Plan, Goal #3, re: communicating with the public.