School funding plan draws fire

By Dan Trevas Record-Courier Capital Bureau Published:

Warren Russell, Ohio School Boards Association legislative director, told

the House Finance and Appropriations Committee Thursday an education funding

plan submitted by Gov. George Voinovich and Republican leaders of the General

Assembly may be flawed in its allocation of money to needy school districts

and that legislators should be given a closer examination of its impact.

Russell said the problem is not with the increased funding going to support

basic education, but changes in the way the state adds extra money to schools

for services to disadvantaged students and for special and vocational education.

Some schools may well have less money even with the tax increase, he said.

That alarmed some members of the committee who said the would like to see

district-by-district statistics of how the new funding plan would impact

their areas.

Rep. Michael Verich, D-Warren, said not knowing how the changes impact schools

bothers him. He also said lawmakers do not have a strong indication of where

money needs to be invested in the system to assure student success.

When you go to the bank to borrow money to build a large building, they

are not going to give you the money without you giving them the blueprints,

he said.

Verich said the state should conduct a thorough needs assessments of the

school system to determine the various types of services schools are lacking

and target money to those services.

The plan presented to legislators calls for a Nov. 4 statewide vote on a

series of constitutional amendments that would increase the state sales

tax from five to six percent, hike cigarettes taxes from 24 cents to 36

cents per pack and increase business property taxes in exchange for lower

residential property taxes and tax exemptions for school expenses.

Rep. Ann Womer Benjamin, R-Aurora, said the committee ought to be presented

with details on how the proposals impact schools in their district. She

noted that information is provided when lawmakers pass a two-year state

budget.

Womer Benjamin said she is not only concerned about some districts potentially

losing money, but also a reduction in local decision-making authority.

To shore up support for the measure, Finance Chairman Tom Johnson, R-New

Concord, said the leaders are trying to address many of the concerns of

committee members.

The House will start hearings next week on a bill that increases the standards

students must meet to graduate from high school. Such a plan addresses complaints

from several lawmakers that they have to vote to increase funding without

knowing how schools will be held accountable for spending the extra dollars.

Johnson also said the committee may respond to pleas for significant changes

in the state tax structure to ensure the new funding system will provide

adequate dollars to all schools in the future.

Both Russell and Tom Hart of the Ohio Manufacturers' Association said the

time is right for significant changes in the state tax structure including

the elimination of the tangible personal property tax on business inventories.

Hart cited a 1994 state study calling the tax on inventories the biggest

obstacle to the state's economic development. Russell said cutting the tax

and replacing it with another source of revenue can help secure more stable

funding for schools and meet the Ohio Supreme Court mandate that the system

become less reliant on property taxes.

``I'm a proponent for changing the current structure now. If we don't do

it, we could be having this same discussion again in five years,'' he said.

The state raised $1.3 billion taxing business machinery and inventory in

1995,, according to the Ohio Department of Taxation, and about 70 percent

went to school districts. The revenue from the tax on the inventory was

$575 million.

``It's been talked about and something we need to look at,'' Johnson said.

State senators have raised objections about using increased cigarette taxes

to help fund education and Johnson said that House would likely drop the

proposal from the plan if the Senate did not endorse it.

Hearings on the ballot initiatives continue next week.

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