Reforming Ohio Education for the 21 st Century

1. Reforming Ohio Education for the 21st Century The Child at the Center of the Education Universe: The great educator and philosopher John Dewey described this idea many years ago. He wrote that we must shift “the center of gravity” in schools. It’s a “revolution, not unlike that introduced by Copernicus when the astronomical center shifted from the Earth to the sun. In this case, the child becomes the sun around which the appliances of education revolve.” Governor Ted Strickland State of the State Address February 2008

2. Integrated P-16 system: From Pre-School to College Graduation One comprehensive early childhood system at the Department of Education (ODE) aligned to K-12 reforms Primary and secondary education reforms aligned to the Board of Regents strategic plan A statewide P-16 technology plan Ohio’s 21st Century Education Reforms

3. Ohio’s 21st Century Education Reforms • 21st Century Learning Environments • Measure Ohio Students Against the World • Expanded Learning Opportunities • High Quality Educators • School District Accountability • Effective Funding System

4. 21st Century Learning Environments Measure Ohio Students Against the World Expanded Learning OpportunitiesHigh Quality EducatorsSchool District AccountabilityEffective Funding System

5. 21st century academic standards and curricula 21st century operating standards Support systems for students with needs Family and community engagement team for each district to: Family and community engagement coordinators at each school building Registered Nurse in each district Nurse wellness coordinator (LPN) in each building 21st Century Learning Environments

6. 21st Century Learning EnvironmentsMeasure Ohio Students Against the World Expanded Learning OpportunitiesHigh Quality EducatorsSchool District AccountabilityEffective Funding System

7. Measure Ohio Students Against the World Multiple Measures to Assess 21st Century Skills • Create Ohio “ACT Plus” • All students take ACT college entrance exam, plus: • End Of Course Exams • Service Learning Project • Senior Thesis or Project • Scores will be combined to create a composite score to determine student readiness to graduate • Revise the assessments for grades 3-8 to align with the new standards and curricula

8. 21st Century Learning Environments Measure Ohio Students Against the World Expanded Learning OpportunitiesHigh Quality EducatorsSchool District AccountabilityEffective Funding System

9. Additional Learning Opportunities: Create the Ohio Academic Olympics Universal all day kindergarten Add 20 learning days to the learning year, phased-in over 10 years Expand the learning day with after school opportunities Build on the Governor’s Closing the Achievement Gap initiative to provide enhanced intervention services in districts with high dropout rate schools Establish the Center for Creativity and Innovation at the Department of Education Develop a non-profit think tank for creativity and innovation in public education Encourage the creation of public school district-sponsored charter schools focused on creativity and innovation in education Expanded Learning Opportunities

10. 21st Century Learning Environments Measure Ohio Students Against the World Expanded Learning OpportunitiesHigh Quality EducatorsSchool District AccountabilityEffective Funding System

11. High Quality Educators Seamless alignment of colleges of education to meet the needs of educators Establish professional expectations for all educators Establish Teach Ohio program Establish Career Ladder with residency program Grant tenure after 9 years, instead of 3 years Establish lower standard to dismiss teachers Create Teacher Compensation and Performance Task Force Expand professional development for STEM Develop hiring protocols for teachers and principals Develop model teacher and principal evaluation instruments

12. 21st Century Learning Environments Measure Ohio Students Against the World Expanded Learning OpportunitiesHigh Quality EducatorsSchool District AccountabilityEffective Funding System

13. School District Accountability Accountability to Support 21st Century Reforms • Require annual spending plans and compliance reports to demonstrate alignment to 21st century operating standards • ODE site visits every 5 years –starting with a pilot project • Performance audit every 5 years • Consequences for failure to comply with accountability provisions • Establish a fiscal and operational report card for districts • Establish financial reporting system for spending at school buildings • Charter school accountability • Review JVS and ESC systems • Establish a school funding model advisory council

14. Charter School Accountability • Grant ODE authority and regulation over all charter schools and sponsors • Eliminate first offer language on school district property sales • Require charters to adhere to highly qualified teacher standard • Create performance report cards for all charters • Competitively bid management service contracts • Prohibit for-profit management services • Grant ODE authority to place sponsors on probationary status or suspend sponsoring authority • Make unauditable language permanent law • Require ODE to conduct an on-site visit every 5 years, permit sponsor to use the on-site report to take action against a school or revoke sponsorship authority for failure to act • Require charter school operators to have at least one Ohio school in at least continuous improvement status • Prohibit sponsor shopping by charter school operators • Create consequences for sponsors that fail to comply with annual assurances established in the last budget

15. 21st Century Learning Environments Measure Ohio Students Against the WorldExpanded Learning OpportunitiesHigh Quality EducatorsSchool District AccountabilityEffective Funding System

16. Ohio’s Funding System - History • The Court’s primary concern in the DeRolph cases was that the State failed to provide funding to assure a “thorough and efficient” public education system that provided all students at least an adequate education • The Court repeatedly found that the General Assembly improperly engaged in “residual budgeting” by developing funding systems based on the amount of money available rather than the amount of money needed • Overreliance on local property taxes – and the need for repeated levies to generate those taxes for schools – unacceptably contributed to disparities between districts’ ability to pay for staff, equipment, supplies, programs and facilities necessary to a “thorough and efficient” public education system and distracted from the schools’ educational mission; • phantom revenue and various unfunded mandates exacerbated the overreliance on local property taxes • The Court expressly affirmed that local property tax could be a component of the public education funding structure as long as every district had the resources to afford all students “an educational opportunity”

17. Ohio’s Funding System - History • Ohio currently uses a successful schools model • Earlier this decade, the “building blocks” model was added to identify professional development and technology costs as key inputs to support educational adequacy. • To address the DeRolph cases, Ohio has tried to increase equity and adequacy through a patchwork of “fixes” to the formula over the years: • 23 mill charge-off • Gap Aid (Charge off Supplement) • Increased Parity Aid Funding • Ongoing Guarantees • The “fixes” add complexity to the system and often operate in inconsistent ways. In some cases, the fixes exacerbates the system’s over-reliance on local property taxes.

18. Although the building blocks approach added value, it, with the fixes, does not address the core findings in the DeRolph cases: Local revenue disparities can significantly undermine the state’s obligations to assure that all Ohio children have at least an adequate level of education, as constitutionally required. An education funding model designed to meet our constitutional obligation to all children must assure that local revenue disparities will not result in an inadequate education. A systemic and comprehensive approach is needed to ensure a thorough and efficient system of education is provided to every Ohio child. As a package, our proposal fully meets this standard. Ohio’s Funding System - History

19. Effective Funding System A systemic and comprehensive 21st Century funding model must: Provide funding for 21st century reforms Align state resources to address equity and parity issues Create a flexible and adaptable system that encourages innovation and creativity Use instructional quality as a driver of the model Recognize that each student is different and allocate resources based on need Retain the shared state-local partnership, but account for local resources Use updated data and information to recalibrate the model in future years Be transparent and easy to understand Be phased in to live with in our means and allow schools to transition responsibly

20. Effective Funding System Key Elements of a Funding System: • Defining a 21st Century Education • Determining the Cost • Determining Local/State Responsibility • Distributing Resources to Meet Unique Student Needs • Address Disparities Created by Different Property Valuations in State

21. Effective Funding System Current Models to Determine Costs • Professional Judgment Model • Econometric Model • Successful Schools Model • Evidence-based Model

22. Effective Funding System Why use the Ohio Evidence-Based Model? • Funding is based on the needs of each student • Assures that teacher quality drives the resources • Determines an amount for each district based on the unique needs of students • Provides flexibility to respond to Ohio’s unique circumstances and priorities • Uses research to tell us what is needed for student success • Updates the special education weights to 2006 levels • Maximizes transparency • Easy to understand • Systematically addresses disparities across all Ohio school districts • Recognizes the different needs of a 21st century education

23. Drivers of the OEBM • Student enrollment • Concentration of students that live in poverty • Student – teacher ratios • Instructional Quality Index • Student services and supports • Organizational unit supports • District supports

24. Effective Funding System • Establish the Ohio Evidence-Based Model: • Identifies a 21st century education and assures all districts the funding necessary to provide the staff, equipment, supplies, programs and facilities associated with a “thorough and efficient” public education system • Local property tax disparities do not deny students “an educational opportunity” • Eliminates “residual budgeting” (reducing local property tax reliance) • Eliminates some unfunded state mandates (reducing local property tax reliance) • Increases the State’s share of funding (reducing local property tax reliance) • Reduce the charge-off to 20 mills, making it equal to the floor to eliminate charge-off phantom revenue (reducing local property tax reliance) • Establish a tool to eliminate another form of phantom revenue and reduce the need for districts to repeatedly run levy campaigns, which reduces the ballot fatigue on taxpayers and districts

25. Transitioning to a 21st Century System • The PLAN provides transitional funding • A “gain cap” and a guarantee to assist districts in their adjustment to a new funding system • Guarantee is at 100% of FY09 spending in FY10 and 98% in FY11 • Gain Cap will limit growth in funding to 15% in FY10 and 16% in FY11 • Both phased out over the next 8 years as plan is fully phased-in • The transitional funding provides resources to address issues of: • Decreasing student enrollment • Sharp relative growth in property valuations • Distorting effects as a result of inefficiencies in the old funding model

26. How To Attack Phantom Revenue? • DeRolph opinions mentioned phantom revenue as an impediment to a properly functioning school funding system • Various solutions have been proposed • State simply pay districts for phantom revenue • Change Ohio Constitution to allow for revenue growth • Blue Ribbon Task Force Report recommended 22 inside mills for all school districts, with 22 mill charge-off • Matching up formula charge-off with mills that produce growing revenue is key

27. How To Attack Phantom Revenue? • Strickland Plan has two-pronged approach • Reduce charge-off to 20 mills • Current charge-off generally thought of as 23 mills, but in reality is 23 mills plus additional local contribution for special education, vocational education, transportation • In isolation, could be attacked as working against state aid equalization; however, EBM has equalizing elements • Find a way to allow school districts to get revenue growth from 20 mills of taxation • This way, what the state aid formula assumes, i.e. growth in 20 mills of tax revenue due to reappraisal, is in fact what the district will have • Reality is 389 school districts already at Class I property 20-mill floor • What to do for the other 225 districts?

28. How To Attack Phantom Revenue? • Find a way to allow school districts to get revenue growth from 20 mills of taxation • Allow voter approval: no mandate here, school district has to convince voters • No change to Constitution, only statute must be changed • No change to inside millage • No change to H.B. 920 tax reduction factors • No change to existing 20-mill floor

29. How To Attack Phantom Revenue? • Find a way to allow school districts to get revenue growth from 20 mills of taxation • The proposal is to create a new kind of levy, a “conversion levy” because current expense levies are being “converted” to a fixed-sum levy, like an emergency levy under current law • Many of the 389 districts currently at the 20-mill floor got there through the use of emergency levies, so this is an expansion of a current mechanism

30. How To Attack Phantom Revenue? • Do districts at the 20-mill floor really go to the ballot less frequently than other districts? • Yes, see executive budget special analysis • Quick summary: over 2002-2008, about 60% of districts at 20-mill floor all years went to the ballot for operating levy, but 90% of districts not at the 20-mill floor went to the ballot for an operating levy

31. Allowing District Resources to Grow • Example - two districts with very similar homeowner tax rates (2007) • One district at floor, the other not • tax rates in mills

32. Allowing District Resources to Grow • Example

33. Tax Relief for Business • Reducing existing levies to hold homeowner tax rates constant will generally cut taxes for commercial and industrial real property and public utility tangible property • A guarantee will temporarily protect school districts against business tax revenue losses from reduced millage

34. Temporary Property Tax Loss Guarantee • Proposal will hold school districts harmless for the two business property tax revenue losses for a fixed period • Allow school districts 4 years to pass conversion levies (2010 through 2013) • Hold harmless of 100% for first year, then phased out over 12 years (2 reappraisal cycles) • Maximum annual subsidy estimated to be about $71 • Total subsidy estimated to be about $500 million over 17 years, or about $30 million per year • Phase-out is tied to growth in Class 1 revenue

35. Additional Levy Incentive New conversion levy will be a fixed-sum levy, like an emergency levy Conversion levies that replace qualifying (pre-September 1, 2005) current expense levies will be eligible for full reimbursement for HB 66 tangible personal property tax losses through tax year 2017 Parallels HB 66 treatment of emergency levies

36. Detailed Example – Akron City SD

37. Detailed Example – Akron City SD

38. Detailed Example – Akron City SD If Akron CSD were to enact a conversion levy, estimated hold harmless payment would be about $1.75 million initially Payment would gradually phase down, depending on growth in Class 1 tax revenues due to reappraisal or update Akron would also receive 100% hold harmless through FY 2018 for TPP reimbursement on 15.373 converted mills (2001 levy and 1994 levy) This amounts to over $4.4 million per year

39. Academic Reforms 21st century skills and core knowledge 21st century learning environments Academic supports and additional learning opportunities Community and family engagement Focus on creativity and innovation Quality teaching Funding Reforms Ohio’s evidence-based model for funding a 21st century education Eliminate charge off phantom revenue Reduce reappraisal phantom revenue by providing local communities with tool to let resources grow at the 20 mill floor Ohio’s 21st Century Education Reforms • Accountability Reforms • Demands fiscal, operational and academic accountability and transparency from our school districts • Ensures taxpayers know exactly how their dollars are being spent, right down to an individual school building’s budget