Last fall, the Columbus Dispatch published an article, Are local school taxes subsidizing Ohio Charters? that confirmed the Byzantine nature of Ohio school finance and the complexities surrounding the calculation of state school aid. If comprehending how the formulas work which allow districts to receive state aid is enough of a challenge, readers also learned that the state was adding insult to financial injury by sending extra money to charters by calculating the amount of local support in the charter aid formula. This calculation method further assists charters by using the local share amount (viz., local property taxes raised by the district for its schools) in the formula to determine charter payments at the expense of public education.
How novel: starve public schools of state funds for years but use local support dollars to calculate the level of state charter payments. So much for local control.
Let’s get back to that word Byzantine again. Consider this one example of how state school aid works.
“When a student living in the Columbus district attends a charter school, the state subtracts nearly $7,800 on average from the district’s state funding. But the state is giving Columbus only an average of about $3,900 in basic aid per pupil,” the Dispatch’s Jim Siegel reported. “Once charter-school money is subtracted, the district gets just $2,604 for each student who is left, a $1,312 loss that is also, by far, the highest in the state,” he explained.
As we’ve read before on these pages, voodoo public policy begets voodoo economics which begets voodoo accounting. In the Dispatch story, Sen. Peggy Lehner, the chair of the Senate Education Committee, confirmed the perfidious nature of state school aid when it comes to charters. “It’s kind of a shell game with the money,” she said. “It’s state dollars, but you have to use local dollars to backfill the state dollars. I think it’s pretty clear that these kids are getting local dollars.”
If Sen. Lehner is clear about the creative accounting used to determine state aid, the voting public in this election year should also be clear about what’s going on here. Though some state officials like Lehner would describe state school aid calculations as backfilling, let’s call it what it is: voodoo accounting.
When Ohio taxpayers start catching on to this state-sponsored ongoing charter school finance scam, they will find that what was a mini-revolt against voodoo accounting that pumps additional public tax dollars to privately operated charter schools is now escalating to a critical mass stage among the state’s public school districts.
The pushback started in November 2015, when school districts started passing resolutions which also contain invoices that are sent to the Ohio Department of Education. As of this writing, 56 school districts have adopted resolutions to invoice the state as a refund request for charter school deductions due to the excess amounts calculated using local funds. As one example, the Berea City Schools adopted this resolution and invoice on April 18, joining other districts in a growing movement to protest the inequities in charter school funding at the expense of public school systems.
According to the Ohio Coalition for Equity & Adequacy of School Funding, a public school advocacy organization led by former assistant state superintendent William Phillis, 10 of the districts that have acted so far are located in Montgomery and Cuyahoga counties. Sadly, not one Franklin County district has joined their colleagues in the Dayton and Cleveland areas in formally protesting the favorable treatment given to charter schools under the voodoo accounting method of calculating locally raised tax dollars into the school aid formula for charters. (Since no school districts in reliably Republican Hamilton County and the Cincinnati suburbs have joined the charter school finance protest yet, that is no surprise, according to sources.)
Why then would Franklin County school districts be silent when more and more districts around the state are stepping up to the plate and telling their communities and state legislative leaders that enough is too much? Why would Franklin County school boards, who have a geographical advantage in reaching legislators, not use their leverage to lobby the servants of the lobbyists?
According to some knowledgeable sources, the answer is simple: Win-Win.
An agreement negotiated in 1986 that allows suburban school districts to continue operating in parts of Columbus that were later incorporated into the city, Win-Win, like state school aid, is also complex and controversial. And when there is controversy, particularly in this election year, it appears that Franklin County’s 16 school districts are practicing risk avoidance. Several contacts have even told Plunderbund that these same districts have been intimidated by some members of the Franklin County legislative delegation. Sadly, uncertainty with Win-Win and alleged intimidation by Franklin County legislators have silenced these districts to the point that we are now in Lose-Lose.
In this fight to ensure equity in public school funding, silence is not golden. It means inaction.
But wait, there’s more.
If sending overly generous amounts of state aid to privately operated and non-transparent charter schools is enough of a problem, new audits of online charter schools receiving aid for phantom students have added even more fuel to the fire. In particular, the case of Provost Academy, a small e-school which received nearly $800,000 in overpayments, has raised additional speculation about the extent of voodoo accounting and even fraud in how charter schools receive state aid.
A source familiar with how charter schools are audited contacted Plunderbund two weeks ago and provided this scenario. “A charter school is reviewed and told to correct errors in enrollment. The school makes the correction, which in turn readjusts the payment. Why doesn’t the money that had been deducted from the resident district ever get returned to the resident district? For instance, if Provost is forced to return $800,000 in overpayments, what mechanism is in place to return that money to the districts from which it was deducted? It’s my understanding that no such reimbursement was ever able to be determined. Just a question to ponder. Besides, IF the dollars were ever returned, how would the resident district know it since there is nowhere on the payment report to show such a thing?”
A fair question in search of an answer.
From the looks of things, there is much, much more to come about how tax dollars are taken from school districts and never returned – even when audits show overpayments for e-school students. Instead, news reports usually say that reimbursements are “returned to the state treasury” and not to districts, where the money should be transmitted.
As more districts are expected to pass resolutions about unfair state aid computations, we can hope that these same districts will start asking questions about why overpayments for phantom e-school students are not being returned to them. We can also hope that Franklin County districts will overcome legislative intimidation by Republicans in this election year, find their collective voices, and say enough is too much.
Do Franklin County and other Ohio school district leaders, along with dedicated school board members, remember the term principled leadership?
Yes, the numbers just don’t add up because when it comes to school aid, the state is mostly about subtracting, not adding. And for 56 school districts who’ve had the guts to go on the record and send invoices to the state for funds they deserve but have not received, too much voodoo accounting is enough.
Denis Smith is a retired school administrator and a former consultant in the Ohio Department of Education’s charter school office.