1. HB 49 – The Budget Bill & Other Policy Issues
Coalition of Rural and Appalachian Schools
April 19, 2017
Presentation by BASA

2. GRF Revenues – Actual $ Received YTD 03/17 and 03/16 ($ in thousands)
Category
Actual FY17 per 03/31/17
Actual FY16 per 03/31/16
Difference
Non-Auto Sales
$ 6,834,289
$ 6,698,142
$ 136,147
Auto Sales & Use
$ 1,015,342
$ 992,249
$ 23,093
Subtotal - Sales
$ 7,849,631
$ 7,690,391
$ 159,240
Personal Income
$ 5,478,938
$ 5,727,312
$ (248,373)
Corp. Franchise/Financial
$ 109,116
$ 160,008
$ (50,891)
Commercial and Petroleum Activity Tax
$ 965,015
$ 965,390
$ (375)
Public Utility, KWH, MCF Tax
$ ,963
$ 367,750
$ 9,212
Foreign/Domestic Insurance
$ 336,928
$ 317,454
$ 19,474
Other Business
$ (678)
$ 92
$ (770)
Sin Taxes
$ ,904
$ 764,534
$ (19,628)
Estate $
$ 933
$ (439)
Total Tax Receipts
$15,861,313
$15,993,862
$ (132,550) 2

3. GRF Revenues – Actual $ Received Comparing 03/17 with YTD Estimates ($ in thousands)
Category
Actual FY17 per 03/31/2017
Estimated FY17 per 03/31/2017
Difference
Non-Auto Sales
$ 6,834,289
$ 6,992,200
$ (157,911)
Auto Sales & Use
$ 1,015,342
$ 1,018,300
$ (2,958)
Subtotal - Sales
$ 7,849,631
$ 8,010,500
$ (160,869)
Personal Income
$ 5,478,938
$ 5,926,600
$ (447,662)
Corp. Franchise/Financial
$ 109,116
$ ,900
$ (22,784)
Commercial and Petroleum Activity Tax
$ 965,015
$ ,900
$ (27,885)
Public Utility, KWH, MCF Tax
$ ,963
$ ,800
$ 14,163
Foreign/Domestic Insurance
$ 336,928
$ ,300
$ 18,628
Other Business
$ (678)
$ 0
$ (678)
Sin Taxes
$ ,904
$ 732,900
$ 12,004
Estate $ $
Total Tax Receipts
$15,861,313
$16,475,900
$ (614,587) 3

4. Speculation on Current Income Tax Collections
In addition to reduction in withholding amounts, also an increase in refunds
2013 – Business income tax provided for deduction of 50% of taxpayer’s business income up to $125,000
2014 – Deduction temporarily increased to 75% of 2014 income
2015 – Deduction continued at 75% (again up to $125,000) with remaining income subject to flat tax of 3%
2016 – Deduction increased to 100% of first $250,000 with any remaining excess subject to 3% flat tax

5. Speculation on Current Income Tax Collections
Small business income tax exemptions “carved out” for municipal income taxes (adjusted gross income)
Small business income tax exemptions “carved out” for school district traditional income taxes (adjusted gross income)
Small business income tax exemptions not “carved out” for school district earned income taxes
Affects 46 school districts!

6. FY11-FY17 School District State Foundation Aid ($ in Millions)
Year School District JVSD
Foundation Aid Foundation Aid Total K-12 Foundation Aid
FY11* $6, $ $6,777.7
FY12 $6, $ $6,529.1
FY13 $6, $ $6,588.6
FY14 $6, $ $6,866.7
FY15 $7, $ $7,299.9
FY16 $7, $ $7,754.2
FY17 (Est.) $7, $ $8,091.0
Source: Dr. Howard Fleeter, On the Money (January 13, 2017) from ODE SFPR Reports

7. FY11-FY17 School District TPP Replacement Payments ($ in Millions)
Year Business TPP Public Utility TPP Total TPP Tax Replacement Tax Replacement
FY11 $1, $ $1,129.1
FY12 $ $ $759.9
FY13 $ $ $510.0
FY14 $ $ $510.0
FY15 $ $ $510.0
FY $404.8 (combined)
FY17 (Est.) $288.4 (combined)
Source: Ohio LSC and Ohio Department of Taxation (cited by Fleeter, op cit)

8. FY11-FY17 State Foundation Aid and TPP Replacement ($ in millions)
Year Total K-12 Total TPP Total Foundation Aid & TPP Foundation Aid* Replacement Replacement
FY $6, $1, $7,906.8
FY $6, $ $7,289.1
FY $6, $ $7,098.6
FY $6, $ $7,376.7
FY $7, $ $7,809.9
FY $7, $ $8,159.0
FY17 (Est.) $8, $ $8,379.4
FY11-FY17 $1, $ $472.6
% Change % % %
* Includes JVSD Foundation Aid

9. HB 49 - Funding
State share index calculation basically unchanged but 373 districts would see reduced state share index
Number of districts currently on guarantee = 133
Number would increase to 315 in FY 2018 and to 321 in FY 2019
Number of districts on cap reduced from 151 this year to 130 in FY and to 103 in FY 2019
Also, TPP supplement is not funded
Supplement provided that no district would lose more than 4% of total funding (both formula aid and TPP replacement) received in FY 2015
Would appear that 390 districts would receive less money next year when foundation funding and TPP replacement money are considered together

10. HB 49 - Funding
Educational service centers would have state subsidy cut by 25%
State superintendent could require ESCs to deliver certain services
Additional $6.5 million in school improvement grants but ODE would be authorized to make grants competitive rather than allocations
Joint vocational school district's aggregate amount of core foundation funding (excluding career-technical education and associated services funding and the graduation bonus) adjusted in substantially the same manner as for city, local, and exempted village school districts
Support for Educational Choice Scholarships would be expanded to grades 4 and 5 for students with family income <200% of FPL

11. HB 49 – College Credit Plus (for 2018-19)
Specifies that, under the default payment structure for the CCP Program, ODE must pay the lesser of (1) the default amount or (2) the college's standard rate for an undergraduate course
Prohibits payments made by the Department for a CCP course under an alternative payment structure from exceeding the college's standard rate for an undergraduate course, if that rate is less than the default ceiling amount
Prohibits payments made by the Department for a CCP course under an alternative payment structure from being below the default floor amount

12. HB 49 – College Credit Plus (for 2018-19)
Eligible student must be “remediation-free” on at least one assessment
Exception for student within one standard error measurement of remediation-free having a GPA of at least 3.0 and advisor’s recommendation
Chancellor to develop rules for “underperforming students” to continue participation
Requires the Chancellor, in consultation with the state Superintendent, to adopt rules specifying which courses under the CCP Program are eligible for funding from ODE
Specifies that courses may be taken under 'Option B' of the CCP Program only if they are eligible for funding under the adopted rules

13. HB 49 – College Credit Plus (for 2018-19)
Separate textbook agreement to be required
College must provide textbooks and 1) high school and college agree on amount and determine who owns textbooks after course ends or 2) high school pays college $10 per credit hour for textbooks and participants return books to college
Annual CCP Program information moved from March 1 to February 1 for students (and parents) in grades 6 through 11
Changes appeal of principal’s decision on participation in CCP from State Board to district superintendent
Changes appeal on granting of credit for CCP courses from State Board to ODE
Chancellor required to establish and administer a College Ready Program

14. HB 108 – Informed Student Document Act
Chancellor required to prepare an "informed student document" for each state institution of higher education (IHE), which must include information on academics, cost of attendance, student success rates, and admission data
Applying student (or student’s parent) must verify that the informed student document for that IHE has been read
One-half credit in economics and financial literacy required as part either of two units of social studies or of five elective units
Includes information from informed student document but also: personal finance; concepts of credit and debt; interest calculation; and sound money management

15. HB 21 – Community School Enrollment Verification
Currently, school districts required monthly to verify enrollment of resident students at community school
Evidence of residence determined by community school
If disagreement on district of residence, State Superintendent of Public Instruction determines
Bill would require community schools to conduct monthly enrollment verification
We have also advocated for annual registration of community school students
Community schools will probably oppose because of monthly check

16. SB 54 – School Food – Summer Intervention
Companion bill is HB 80
Currently, districts must provide food for students in summer intervention programs
However, boards can “opt out” of providing food for financial reasons
Bill would require boards to make facilities available to outside food provider
Outside providers would be required to:
Pay “reasonable fee” for use of facilities and equipment
Maintain their own liability insurance and food service license
Assume all liability for operation of summer food program

17. SB 8 – School Infrastructure and Technology
Would requires the School Facilities Commission by 12/31/17, to establish program whereby school districts that have not yet received assistance under CFAP may apply for state funds to use for technology and physical alterations to improve technology infrastructure or school safety and security
OSFC to determine application and selection process and method for determining amount of funding (including state and local shares)
District board must approve participation by affirmative vote of not less than four-fifths of board’s full membership
If district participates, it is no longer eligible for CFAP in the future

18. SB 82 – School Absences – Parental Notification
Under current law board to adopt policy requiring notification of parent of child’s absence “within a reasonable time”
Would change “within a reasonable time” to “within 60 minutes” after start of school day
Attendance officer, officer’s assistant, or other designated person must attempt to phone at least once within the 60 minutes
Call not required if parent notifies school of child’s absence within the 60-minute period

19. Senate Bill 85 – Opportunity Scholarship
Introduced on March 2, 2017; now in Senate Education Committee
Would be effective in school year
Would create the Opportunity Scholarship Program (OSP)
Eliminates the Ed Choice Scholarships and the Pilot Project Scholarship
Retains the Peterson Special Needs and the Autism Scholarships
OSP would be based on income and on school performance
Amounts: $5,000 for grades K-8 and $7,500 for 9-12
If underperforming school, full scholarship
If income based: Full scholarship for income below twice the FPL; 50% if family income is 4 times the FPL
Between 2 times and 4 times the FPL, scholarship reduced by ½% for every 1% increase of family income above 2 times the FPL

20. Senate Bill 85 – Opportunity Scholarship
Full amount of scholarship to be increased by same percentage by which formula amount is increased from previous school year
If scholarship exceeds amount of tuition and fees, ODE to pay excess amount into education savings account established for student
Education savings account could be used for future education expenses including college courses, entrance exams, etc.
On and after July 1, 2017, the student not enrolled in a chartered nonpublic school during any school year prior to the first school year for which opportunity scholarship is sought
Scholarship students subject to state testing requirements

21. Senate Bill 85 – Opportunity Scholarship
Hypothetical Opportunity Scholarship costs based on participation
Includes reduction in state foundation aid to resident districts
Includes elimination of directly funded Cleveland scholarships in income based EdChoice scholarships
Estimated costs by participation rates*
2.5% rate = $46.1 million
5.0% rate = $74.4 million
7.5% rate = $103.8 million
10.0% rate = $133.1 million
* Source: LSC Fiscal Note & Local Impact Statement (April 4, 2017)