Treasurer

Ohio’s public school funding is guided by the Fair School Funding Plan, designed to ensure equity and adequacy across districts. This formula takes into account:

• Student Needs: The number of students enrolled and their specific needs, such as special education or gifted services.

• Local Capacity: A district’s ability to raise revenue based on property values and income levels within the community.

• Base Costs: The per-pupil cost to provide a quality education, including staffing, supplies, and operational needs.

State funds are distributed to help close gaps between communities with differing property wealth, aiming to provide every student with equitable educational opportunities.

Local property taxes play a vital role in funding public schools. Communities approve levies, which are measured in “mills,” to support various aspects of school operations. These taxes account for a significant portion of the district’s budget.

• Operating Levies fund day-to-day expenses like teacher salaries, transportation, utilities, and classroom materials.

• Bond Levies are used for long-term projects like new school buildings or major renovations.

• Permanent Improvement Levies cover repairs, technology upgrades, and equipment, with funds restricted to capital improvements.

In Ohio, property values directly impact local funding. For every $100,000 of home value, a 1-mill levy generates approximately $35 annually in property tax for the district.

The federal government provides targeted funding for specific programs, such as:

• Title I: Supports schools with high percentages of low-income families.

• Special Education Grants: Assists in meeting the needs of students with disabilities.

• Nutrition Programs: Funds free and reduced-price lunch and breakfast programs.

While essential, federal funding typically represents a small percentage of a district’s overall revenue and comes with specific restrictions on how it can be used.

In addition to the primary funding streams, districts may receive additional income through:

• Grants and Donations: From private organizations or foundations.

• Student Fees: For extracurricular activities, transportation, or classroom resources.

• Partnerships: Collaborations with local businesses or community organizations.

Ohio’s school funding system emphasizes a partnership between the state and local communities. Local contributions demonstrate the value placed on education, while state funding helps address disparities. Together, these sources enable schools to offer high-quality education to all students.

Property taxes for schools are calculated using millage rates, where 1 mill equals $1 for every $1,000 of a property’s assessed value. In Ohio, residential properties are assessed at 35% of their market value, meaning taxes are based on a portion of the home’s worth.

For example:

• A 5-mill levy on a home valued at $100,000 would cost the homeowner approximately $175 annually.
  (Calculation: $100,000 x 35% = $35,000. $35,000 ÷ 1,000 = $35. $35 x 5 mills = $175)

Ohio law allows districts to request different types of levies to meet specific needs. Each type of levy has a unique purpose:

• Operating Levies: Provide funding for day-to-day expenses, including teacher salaries, classroom supplies, transportation, and utilities.

• Bond Levies: Used for major construction projects, such as new schools, renovations, or purchasing property. Bond levies are repaid over time, similar to a mortgage.

• Permanent Improvement Levies: Support long-term needs like building repairs, technology upgrades, and other capital improvements. Permanent Improvement funds cannot be used for salaries or daily operations.

Due to limitations in state funding, local property taxes often fill the gap between what the state provides and what schools need to operate effectively. For many districts, levies are essential to maintaining current programs, improving facilities, and ensuring students have the resources to succeed.

One important detail is that Ohio law prevents property taxes from automatically increasing with inflation. Known as the "House Bill 920 Effect," this law freezes tax revenues at the dollar amount initially approved by voters. While this benefits taxpayers by preventing sharp increases, it also means schools receive the same revenue even as costs rise.