CFO Pendleton is Principal Player in New Plan

New Funding Formula to Aid Urban Schools
Posted on 07/08/2021
Image of New School Funding Plan(Jenny Hamel for Ideastream.org)

Many Northeast Ohio public school districts will see an increase in state funding as part of the recently approved $75 billion biennial state budget, which includes the new Fair School Funding Plan.

(Listen to the audio here >>.)

With Gov. Mike DeWine’s signature July 1, the plan became law, determining the amount of state aid a school district gets with a formula of 60 percent local property taxes, 40 percent household income and other factors.

State legislators also approved an additional $564 million in K-12 funding as part of the two-year budget, falling short of the six-year funding phase-in outlined in the original House version of the bill.

Under the Fair School Funding Plan formula, the Cleveland Metropolitan School District (CMSD) expects to see a 2.5 percent increase in funding over the next two years, with $7.6 million added to the nearly $310 million the district receives currently from the state.

It’s a modest increase but one that gives the district “a little more breathing room” when it comes to budget forecasting, said CMSD Chief Financial Officer Derek Richey. What’s important, Richey said, is that the additional state funding work in conjunction with the nearly $450 million CMSD has already received in federal pandemic relief funding.

“This enables the district to make and place some big bets on the academic experience and the school experience for students and being able to manage that cliff that will happen at the end of those pandemic relief funds and allow us to make and realize those investments for kids,” Richey said.

While he is concerned about the cliff the district faces when those pandemic relief funds dry up, Richey said he’s not too worried about the next state legislature “unwinding” the Fair School Funding Plan.

“I guess I'm not overly concerned that in two years people are going to say, ‘That was a terrible formula,’ because people spent so much time trying to get it right,” Richey said. “I think with the direct funding of charter schools and vouchers, I think this is a significant relief to a lot of districts. I think the increased transparency is a positive thing.”

The formula is also expected to help relieve levy requests and increases from some school districts. The Willoughby-Eastlake City School district is among those seeing the biggest increases under the new formula, with a 33 percent jump in state funding. The district currently receives just under $16 million a year in state funding and will see an additional $5.23 million infused over the next two years. Voters there approved a levy last April – after two failed attempts.

The Akron Public School District will receive an additional 5 percent in state funding over the next two years, with roughly $8.6 million being added to the $165.5 million the district gets from the state currently.

That additional funding is important, Akron Schools Treasurer Ryan Pendleton said, because it provides needed resources. But more important, he added, is what could be done in Akron’s schools if the new is fully funded.

“The road map is the more important aspect,” he said, “Meaning, once fully phased in, we should have about $30 million of additional monies. Much of that is economically-disadvantaged monies that we need to put to work toward those students who need it most. That’s exciting. That road map is exciting because now we know the legislature, the General Assembly, knows exactly what needs to be costed out to get to that level of adequate funding.”

The Canton Public School District also will receive a nearly 5 percent addition to its state funding. Over two years, the district will get just under $4 million on top of the $85 million it currently receives.

For the Garfield Heights City School District, a 23 percent increase in funding is expected over the next two years, with $4.5 million coming on top of the $19.5 million in state funding the district receives now.

Garfield Heights Superintendent Chris Hanke said his district was “pleasantly surprised” the legislature reached a compromise and passed the plan. The additional funding will help “tremendously” with planning for the next two years, he said.

But amid the excitement, Hanke said he and his school district remain cautious.

“Because of the biennium, we’re going to have to be very careful because in two years, when they re-evaluate, this could change dramatically,” Hanke said. “We’re going to be very careful about how we look at that money and how we plan for it. It's going to be one of those things where you really have to watch.”
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