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State Budget Standoff Threatens Ohio School Programs

December 13, 2009

Eric Calvert is a new contributor to the High Ability Blog.  He is currently a doctoral student at Bowling Green State University.  Eric is the former Assistant Director of Gifted Education in the Center for Exceptional Children at the Ohio Department of Education.

Just when you thought it was safe to tune out of state politics for awhile and enjoy the holidays, a reemerging hole in the state budget is once again putting schools (and gifted funding) at risk.

What went wrong? The biennium budget passed in July assumed the state would rake in hundreds of millions of dollars from lottery terminals to be installed at racetracks around the state.  However, a legal challenge to the lottery terminal plan has the initiative in a state of limbo that is unlikely to change anytime soon, making it likely that the state won’t see a penny in lottery terminal revenue this fiscal year.  By law, lottery funds must go to fund education, so any cut in these revenues affects the education budget. Adding yet another wrinkle is the recent passage of a constitutional amendment to allow the construction of full blown casinos in the state’s largest cities.  The casinos would surely siphon off much of the business assumed for the track-based lottery terminals and, unlike the lottery terminals which would put revenues directly into state coffers, the bulk of the tax revenue for the casinos would flow to city and county governments instead of the state treasury.

Now, the state is facing a likely shortfall of around $850 million over the next two years, with the majority of impact felt in FY2012.  Governor Strickland has proposed postponing the final round of income tax cuts passed during the Taft administration to make up for the lack of lottery revenue.  However, with the GOP in control of the Senate, he needs Republican support for the plan, and the GOP caucus in the Senate is balking, wanting to maintain an anti-tax image heading into a Gubernatorial election year.  The Republicans want the Governor to make concessions on construction rules changes that would hurt him with labor supporters before they will give him the votes he needs to pass the tax cut delay.

School officials around the state are nervous, because after December 31, the Governor and legislature can’t legally put off the planned tax cut, meaning that virtually all of the deficit would have to be addressed through spending cuts.  Further, because virtually every state program was already cut to the bone in the July budget deal while education was largely protected, school funding would have to bear the brunt of any new round of cuts.  Making matters worse, cuts in state funding for schools would also put Ohio out of the running for a $200-$400 million chunk of federal funding that is contingent on state “maintenance of effort” requirements.

For schools, this means potential cuts of 10%-15% in state support.  (A table showing district-by-district cuts simulated by the Ohio Department of Education (ODE) is available here.) With that size of a cut, it is hard to imagine that gifted programs would not suffer (along with other talent development-oriented programs in the arts and extracurricular activities) and, with the lack of a state mandate for services and no federal match on the line, it is possible that state gifted funding would bear a disproportionate share of the cuts.

Therefore, before tuning out of school for a few weeks to focus on celebrating the holidays with family and friends, please take a minute to contact your representative in the Ohio Senate and in the Ohio House and tell them not to come home for Christmas until a budget fix is passed.

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