HB 153: 2012-2013 State Budget (as passed by the GA & signed by the Gov.)

1. HB 153:2012-2013 State Budget (as passed by the GA & signed by the Gov.) July 2011

2. HB 153 – School Operation Support • Ohio Educational Computer Network (OECN) cut by 10% and EMIS cut by almost 43% • EMIS funding “redirected” through basic aid • School District Solvency Assistance increased by almost 39% • Educational service center funding reduced for FY12 to 90% of FY11; reduced further in FY13 to 85% of FY12 amount • State aid per pupil = actual state aid divided by district’s recalculated FY11 ADM

3. School Funding Formula • Ohio Evidence Based Model Eliminated • Career Tech funding flat-lined in both years • Reductions to account for loss of SFSF accomplished through a “bridge” formula • Cap on loss of state aid • Performance Incentive of $17 per pupil for Excellent with Distinction and Excellent Districts (Senate provision) • Includes Community Schools

4. Bridge Formula • Distribution to account for loss of Federal SFSF is bridge formula based on a per pupil amount weighted for wealth • For the step-by-step Bridge Formula, see handout • Special Ed Preschool Units and Transportation not included in calculation, but flat lined for budget. • Bridge formula language enacted in law – calculation for the reduction amounts, including loss caps for state aid will occur each year using updated data

5. Bridge Formula (cont.) • Districts cannot receive less than FY11 state aid guarantee in either Fiscal Year (not including SFSF) • The state aid guarantee is based on: lines “TOTAL STATE SUPPORT” less [“PRESCHOOL UNITS” and “SPECIAL ED TRANSPORTATION”] from the statement of settlement.

6. New Funding Model • Could be in place July 1, 2012 • Governor’s office beginning outreach to gather information related to the underlying principles that a model should have • May be based on work of Hanushek and/or “cost per student success” used in Butler Career Tech School District • Hanushek model is a performance based system • Budget language allows bridge formula to determine FY13 allocations if funding model not ready to be implemented

7. TPP & PUPP Tax Reimbursements • Tangible Personal Property (TPP) and Public Utility Personal Property (PUPP) Tax Reimbursements • Phase-down of payments over the biennium (same as in governor’s original proposal) • Loss in each year capped at 2% of FY10 Total Resources: Sum of lines 1.01 through 1.05 on five year forecast, plus revenue (not net) for open enrollment • Districts under the 2% cap lose all replacement payments

8. TPP & PUPP Tax Reimbursements (cont.) • Phase-out of payments stops June 30, 2013 • Payments for TPP Reimbursement ends in FY26 • Payments for PUPP Reimbursement ends in FY30 • Subject to change in any biennial budget • Fixed Sum Levies Phase-out same as current law • PI levies phase out 25 % per year beginning FY12

9. Gifted Education Funding • Is eliminated, except for $8.1 million for educational service centers. • Included in Basic Aid Line Item • Districts must spend 2009 level of state funding • Identified Gifted Students and their performance is to be considered by ODE in the ratings of School Districts • It is undefined how that is to occur

10. Expenditure Reduction Tools • Removed language changing the Contribution levels for the five state retirement systems to 12% for both employees and employers contained in governor’s original proposal. • Language for regional service centers to facilitate sharing of services maintained • Governor’s Director of Office of 21st Century Skills to study how this would be implemented • Report from study due on January 1, 2012 for implementation on July 1, 2012

11. Expenditure Reduction Tools (cont.) • Language similar to Senate Bill 5 for Teachers only • New system of evaluations must be done for all teachers • State Board to develop framework for evaluations • Categories for evaluation results also developed: accomplished, proficient, developing and ineffective

12. Expenditure Reduction Tools (cont.) • Reductions in Force for teachers must utilize evaluation • Race to the Top Districts must utilize new salary schedule and performance pay systems • State Board to develop framework • Other districts not receiving RttT funds may use the new system It is unclear how these provisions will interact with SB 5 if not repealed

13. Expenditure Reduction Tools (cont.) • Exempts from current law the requirement that 15 days sick leave be provided to: • Substitutes; • Adult Ed instructors who work the FTE of less than 120 days per school day; and • Persons employed on an as-needed, seasonal or intermittent basis • However, sick leave at a rate of 4.6 hours must be provided for: • Regular part-time, employees • Per diem; or • Hourly service be granted of sick leave for 80 hours of service

14. Expenditure Reduction Tools (cont.) • Health Care Pooling plan to be developed by Department of Administrative Services (DAS) and in place 7-1-12 if approved by General Assembly • School Employees Health Care Board (SEHCB) eliminated • New Public Employees Health Care advisory group established • Study to be authorized to develop plan • Voluntary Participation (if already in a pool or self-insured) – must follow best practices • Statewide vs. Regional Pooling • Plan Structure

15. Expansion of Choice – Voucher Program • Maintains executive-proposed expansion of EdChoice Scholarship program • Number of vouchers increases from 14,000 in FY 11 to 30,000 in FY12 and to 60,000 in FY13 • Expands eligibility to school district buildings in bottom 10% of Performance index rankings for 2 of the last 3 years

16. Expansion of Choice – New Voucher Program • Creates the “Jon Peterson Special Needs Scholarship (Voucher) Program” • Begins in 2012-2013 School Year, up to $20,000 for each voucher • Students can use the voucher for a private provider or another public school • Limits number of vouchers to no more than 5% of special education population (equals about 14,000) • Districts must provide transportation for voucher students • Scholarship amount deducted from resident school district

17. Expansion of Choice – Community Schools • Community School funding – $5,653 per pupil, use FY 09 formula amount of $5,732 when computing supplements • Re-defines the “challenged school district” definition to include bottom 5% in performance • Establishes new system for ODE to act as Sponsor • ODE to develop a program that allows schools to apply through them • Current Community Schools that lose sponsors can apply through ODE • Limits ODE to approving 20 applications each year

18. Expansion of Choice – Community Schools (cont.) • Removes caps on community schools other than E-Schools • Allows current sponsors to sponsor additional community schools if not ranked in bottom 20% • Allows sponsor to sponsor up to 100 schools • Eliminates moratorium on E-Schools after Jan. 2013 • Requires State Superintendent & Governor’s Director of Office of 21st Century Skills to develop E-School standards and submit by July 2012 • Requires E-Schools to comply with standards by Jan. 2013 (new schools) or July 2013 (existing schools)

19. Expansion of Choice – Community Schools (cont.) • Reinstates language requiring immunization of students in E Schools • House had inserted language exempting E School students from immunization laws • Establishes new restructuring provisions for failing schools (bottom 5%); one option – conversion school • Buildings not used for classrooms at least two years must be offered for lease or sale to a community school • Market value • If more than one community school interested, district must conduct auction/lottery for them

20. HB 153 – The 50,000 Foot View • Budget reductions consider total district resources rather than just state subsidy • Overall budget doesn’t look at only what was GRF money for basic state services • No real school funding formula • A distribution formula • Does not appear to be anti-equity

21. HB 153 Clarifications • BMI screenings repealed • Governor’s veto • Waiting on ODE clarification • Blizzard Bags/Calamity Days • Online lesson plans • Paper copies • Requires written consent of teachers’ union

22. HB 153 Association Progress • Repeal of restriction on sale of milk sold a la carte • Transfer of unused textbook set-aside money to General Fund • Revision to public records law • Creation of new combination levy • Authorization for an alternative 412 certificate • JVS participation in tax abatement process • Eliminate TPP/TUPP phase-out after FY13 • Prohibited State Board from requiring Bachelor’s degree for career-tech teachers

23. HB 153 Association Progress • Eliminated ban on collecting career-tech fees from students eligible for free lunch • Removed Senate proposed requirement for districts to allow home-school students to participate in extracurricular activities • Delinquent Tax and Collection (DTAC) Fund Changes • DTAC fund is split into two funds – County Treasurer & County Prosecutor funds • If either fund exceeds three times the amount deposited in the previous year, the County Auditor can be asked to stop deposits • Once fund(s) get below the threshold, deposits would resume

24. Budget Analysis & Discussion (BAD) Seminar Wednesday, August 17 Hyatt Regency, Columbus Comprehensive Budget Workshop This workshop is $185 per person for OSBA, OASBO and BASA member school district representatives. The fee covers workshop registration, materials, lunch and refreshments. Register online at www.ohioschoolboards.org

25. Questions?