The Ohio House of Representatives recently released its proposal for the next two years of school funding. Despite claims that the new plan gives schools more money than they received in 2025, the new proposal actually reduces funds for almost all of Ohio’s public schools compared to what they would have received if the state simply continued the Fair School Funding Plan (FSFP) that was passed in 2022. In short, schools’ futures under the House plan should be judged, apples-to-apples, against schools’ futures under the alternative plan—not against the past.
Think about it – if a business is considering making a change and wants to know how profits could be impacted over the next two years, it would make future projections for each path it could take. Then, it would compare the two outcomes and see which version of the future generates the most profit. The Ohio House wants to make a big change and only wants families to compare their version of the future against the past. That’s bad cost-benefit analysis.
In this post, I try to help Ohio families fill the gap and make the better comparison. I analyze Ohio budget data and 2026-2027 funding projections from Policy Matters Ohio, with a special focus on Ohio counties served by the Appalachian Regional Commission (ARC).
The key finding is that schools in Ohio’s Appalachian counties would lose $565.8 million in state funding relative to what they would have received if the current funding plan was supported.
Most of Ohio’s Appalachian counties do not have high numbers of charter schools or private schools. That means that Appalachian families cannot easily avoid these state cuts by sending their students to private school with Ohio’s controversial new school voucher program (a program that cost the state over $450 million last year). Even then, vouchers don’t fully cover the cost of most private schools, possibly leaving low-income families on the hook for several thousand dollars, even if suitable private options existed in their communities.
The House budget plan would force Appalachian families to choose between moving out of their homes or sending their kids to schools with the least amount of state support in Ohio’s history. The chart below compares the money each Appalachian county’s schools would receive from Ohio if the Fair School Funding Plan were fully supported versus the current Ohio House proposal. For fact sheets for individual districts, click here.
For additional background on Ohio school funding and details about the two different plans, read on.
Ohio’s School Funding Mess
Determining school funding has been a thorn in the side of Ohio policymakers and school leaders for decades. Between 1997 and 2022, the Ohio Supreme Court issued four decisions in the case DeRolph vs. State, which ultimately found that Ohio’s system for funding schools was unconstitutional due to its failure to distribute resources equitably across the state’s districts and its over-reliance on property taxes.
Economists have known for years that property taxes are a primary cause of inequitable school funding in the United States. Poorer areas, such as many Appalachian school districts, by definition, have lower baseline property values in the first place and also face other constraints on the growth of property taxes including zoning limitations and corporate tax abatements used in economic development ‘deals’. These all make it harder for low-income school districts to raise new revenue through just property taxes.
In Ohio, these inequities are made worse by the fact that, since 1976, money that Ohio districts raise with voter-backed school levies is limited to only the taxes collected on property values at the time the levy passes. This law, called House Bill 920, was passed in response to a period of rapid home value inflation in the 1970s to help prevent huge, unexpected property tax increases on Ohioans. But, it means that Ohio schools have to ask voters for more money more frequently than other states just to keep pace with rising costs. Property values in Ohio are automatically reassessed by county auditors every six years and, unless their voters pass a new levy, schools don’t receive any additional money when these values rise. And, oftentimes, poorer districts have a more difficult time convincing their voters, who are already stretched thin, to pay more in property taxes. In small communities that skew older, senior citizens on fixed incomes might be forced to vote against new property tax increases, even if they want to support schools.
It’s easy to see how this creates a downward spiral. Poorer Ohio districts that can’t pass levies are more likely to get stuck with a fixed budget and rising costs. It’s easy to imagine that, for instance, technological advancement between 1976 and 2025 has required schools to spend more money on computers, tablets, software, and IT infrastructure to adequately prepare students for the 21st century workforce. It’s also easy to imagine that making cost-of-living adjustments to teacher and counselor pay is crucial to recruiting the best teachers for our children.
How do districts solve this problem if they can’t just keep passing levies? Usually, they have to lay off teachers and staff, increase class sizes, cut bus routes and field trips, reduce social and emotional support for students, and slash budgets for athletics and the arts. All of which are bad for kids and families and reduce the value that we get for the taxes we already pay.
This is where state and federal school funding come in. By fully funding school districts in a way that reflects their actual costs and needs, accounting for differences between district demographics and students, politics could help smooth out disparities and ensure that the zip code a child is born into in Ohio doesn’t play a determining role in their future opportunities. With hard work and strong support, every child in Ohio should have the resources to succeed when they begin school and enter Kindergarten.
Unfortunately, Ohio’s politicians have chosen to try and eliminate Ohio’s Fair School Funding Plan (FSFP) after just two years and their replacement proposal for the next two years would result in the lowest state share of school funding in Ohio’s history.
What is the Fair School Funding Plan?
Implemented just two years ago in Fiscal Year 2023 (FY23), the Fair School Funding Plan was heralded as a fix for Ohio’s unconstitutional school funding system. By providing more state funding based on actual needs and costs, the state could try and offset the inequities from a funding scheme based primarily on property taxes.
The FSFP used a complex formula that calculated a “base cost” for how much money it takes to educate the enrolled students in each of Ohio’s 611 public school districts. This base cost is largely dependent on enrollment and the transportation costs to get students to school, which is important in rural areas. The FSFP formula then adjusts each district’s funding based on its unique needs, including:
- Poverty rate in the district
- Special education students in the district
- Gifted students in the district
- Vocational school attendance in the district
- English language learners in the district
After adjustments, the formula determines each school district’s financial net needs based on its costs, which is a smart approach. Nobody wants to underfund schools, but nobody wants to allocate taxpayer money inefficiently. As Ohio taxpayers, the FSFP got us the biggest ‘bang’ for our buck.
The Governor’s proposal left out inflation from the FSFP. The House of Representatives proposal completely eliminates the FSFP.
This spring, Ohio’s Governor Mike DeWine proposed a new state budget for the next two years that caused major concern for school leaders around the state. Part of the existing FSFP is that it includes a ‘guarantee’ provision. If a school district experiences sudden volatility in enrollment or a rapid change in property values, the guarantee helps keep school funding reliable so that districts can plan ahead and not face sudden layoffs or cuts without time to plan ahead for them. But DeWine’s budget proposal tried to “save” the state money by reducing the guarantee by 5% in FY26 and 10% in FY27.
The Governor’s budget also had a bigger problem. As Policy Matters Ohio notes, DeWine’s proposal also used FY22 numbers to establish its FSFP baseline. In 2022 alone, the inflation rate was over 8% and remained over 4% in 2023 and remains above the 2% target at the time of this post, in 2025. Just like households experience budget strains from inflation, schools do too. Teachers receive cost-of-living adjustments to afford groceries (and 2022 Ohio’s teacher salary was still well below the national average). Heat, fuel, and electricity bills have gone up to keep school buildings open and buses running. The cost of internet service, textbooks, pens, paper, technology, athletics, all have gone up. Using 2022 as a baseline, which ignores the period of highest inflation in nearly four decades, puts Ohio schools immediately behind before the budget is even passed.
Reducing the FSFP guarantee and using FY22 as the baseline allowed Governor DeWine to politically claim that his budget “fully funded” the Fair School Funding Plan. Now, the Ohio House of Representatives has gone further and has proposed scrapping the FSFP altogether. This would underfund Ohio’s public schools by $2.75 billion over the next two years. This was viewed by many Ohioans as particularly egregious when the same House budget plan includes $600M in state-backed bonds for the billionaire owners of the Cleveland Browns to construct a new stadium. An aside: while it is common for politicians from both political parties to claim that publicly funded sports stadiums are “an investment” that will pay back the state with new economic activity, most credible studies examining data find this to be dramatically overstated. Publicly financed stadiums are most often a giveaway to the owners of businesses like the Cleveland Browns, which are currently valued at $5.15 billion and reported a revenue year of over $600M. Perhaps Ohioans should just buy the team.
Although House Republican leadership claims that “no district will receive less than they did last year,” this is misleading and disingenuous. Similar to the Governor’s proposal, it ignores inflation and rising costs over the next two years and wants Ohioans to believe that nominal dollars are all that matter. Ohioans, who just experienced rapid inflation, are smarter than that. Instead, the House proposal should be compared against what a district would have received over the next two years under the FSFP, In essence, what would FY2027 funding look like under the House plan, and what would it have looked like under the FSFP?
The map below shows the shortfall by school district across the state, using Policy Matters cumulative projections of the FSFP and the Ohio House Proposal over the next two years (FY26 and FY27).
The House achieves its bad budget math by eliminating targeted funding for districts with wealth disparities or districts that lose students to private schools via Ohio’s controversial new “EdChoice” school voucher program. Their budget also seemingly (for some reason) halves any increase that districts would have received under Governor DeWine’s already meager proposal. House leadership repeatedly has complained that they should not be constrained by prior General Assembly FSFP legislation from two years ago, which makes almost no sense given that Ohio school districts have been constrained by House Bill 920 for nearly 50 years. It is hard to view the House budget proposal as anything besides a politically motivated decision, where politicians allocate tax dollars based on their unfounded opinions and ideology about public schools rather than the real needs of students and families. The current funding proposal would be the lowest state share of Ohio education funding in the state’s history.
Local school officials have advocated against the proposal, noting that it means they’ll have to ask their voters for even more funding. The superintendent of Parma City Schools told the Ohio Capital Journal, “We’re gonna have to ask for more money, and it’s a tough sell for many [district residents].” Parma City Schools voters have failed four consecutive levy requests.
Smaller districts in other parts of the state, like Bowling Green City Schools, already have published detailed budget cuts, reducing funding for bus routes for high school students, all field trips, teaching staff, and all athletics and clubs if their new five-year income tax levy doesn’t pass this coming May. Under the House plan, even if the levy passes, Bowling Green City Schools is set to receive less money than it would have under the FSFP.
Unless the Ohio General Assembly changes course, more school districts will find themselves in similar financial trouble over the next two years. The current proposal directly threatens Ohio’s students, families, and teachers and risks putting our students and teachers even further behind other states.