On March 15, 2011, Governor John Kasich introduced his “Jobs Budget” which has since seen more than three months of intense deliberation by the Ohio General Assembly. On June 27, the budget conference committee voted 4-2 along party lines to send the final budget compromise to each of the respective legislative chambers for a vote. On June 28, the Ohio Senate voted 22-11 to approve the conference committee report, and the House followed the next day to approve the measure by a margin of 59-40.

The two-year, $55.8 billion package contains a number of policy and fiscal provisions that will impact school districts, local governments, healthcare, prisons and Ohio’s tax structure, while adding $187 million to the state’s “rainy day” fund.

Projections indicate school funding will experience an overall $700 million reduction in fiscal years 2012-2013. In addition, movement to a new school funding model is in process. The Evidence-Based Model (EBM) for funding city, exempted village and local school districts in FY 2012 and FY 2013 was repealed. While a new funding formula is being developed, the “bridge” formula contained in House Bill 153 will be used to distribute the current K-12 education funding appropriation.

For more information on specific portions of the budget, please visit: http://www.lsc.state.oh.us.

Below is a synopsis of portions of the state operating budget that apply directly to public schools.1

General Tax Provisions

  • Accelerates the phase-out of the public utility property tax loss reimbursements for schools, and holds reimbursements at CY 2013 levels in subsequent years for units of local government other than school districts.  
  • Changes distribution of kilowatt-hour tax receipts, requiring 88% (from 63%) of receipts to be credited to the GRF; 9% (from 25.4%) to the School District Property Tax Replacement Fund; and 3% (from 11.6%) to the Local Government Property Tax Replacement Fund.  
  • Changes the distribution of excise tax on natural gas distribution companies, requiring 100% to go to GRF instead of school districts and local government.  
  • Changes the method of apportioning reimbursement payments for local governments and school districts for mergers and annexations from property value basis to square mileage basis.  
  • Accelerates the phase-out of the fixed-rate tangible personal property tax loss reimbursement for non-school taxing units, and holds reimbursements at CY 2013 levels for units of local government other than school districts.  
  • Excludes from the sales and use tax the value of gift cards or certificates redeemed by a consumer in exchange for the vendor’s goods or services as part of the vendor’s awards, loyalty or promotional program.  
  • Permits school districts to propose a combined income tax and property tax levy question up to twice a year.

Labor Provisions Concerning Prevailing Wage  

  • Exempts from the Prevailing Wage Law any portion of a public improvement that is undertaken and completed solely with donated labor.  
  • Prohibits a public authority from applying prevailing wage requirements to a public improvement that is undertaken by, or under contract for, a school district or education service center.

Labor Provisions Concerning Construction Reform

  • Eliminates the requirement that the multiple-prime contracting method be used for public improvements, but does not prohibit its use.  
  • Authorizes public authorities to enter into public improvement contracts with construction managers at risk (CMARs) and design-build firms (D/B firms). Authorizes public authorities to enter into public improvement contracts with general contracting firms as sole prime contractors regardless of the size of the project.  
  • Increases from $50,000 to $200,000 the minimum project cost threshold that requires competitive bidding for state projects. Exempts CMARs and D/B firms from this requirement.  
  • Increases from $25,000 to $50,000 the professional design fee cost threshold.

General Local Government Provisions

  • Grants authority to local subdivisions to enter into contracts for shared services.  
  • Specifies that if an officer of a political subdivision is in fiscal emergency and he/she has been convicted of certain violations, he/she is ineligible to hold public office in Ohio or be employed by a public entity for seven years after conviction.  
  • Allows for a regional council of governments to enter into contracts on behalf of member political subdivisions.  
  • Authorizes county commissioners to require county offices to use centralized purchasing for certain services, except for information technology, specific types of human resources and certain software purchases.  
  • Allows townships to merge, and makes other provisions.  
  • Allows townships to merge with municipal corporations, with ballot approval.  
  • Makes general changes to public legal notices and advertisements.  
  • Prohibits a political subdivision from enacting laws that ban or restrict certain foods based on nutrition.  
  • Provides pooled health insurance to local governments, school districts and institutions of higher education.  
  • Makes changes to public records laws.  
  • Makes changes for transfers of school district bond funds.  

Higher Education

  • Grants residency status, for purposes of college tuition, to Ohio high school graduates, regardless of residence prior to enrollment.  
  • Requires all state institutions of higher education to issue a statement describing a method for earning degrees within three academic years.  
  • Expands Choose Ohio First grants to include colleges and universities that propose scholarships for graduate level science, technology, engineering, math or medicine teacher education students who establish domicile in Ohio and commit to teach for at least three years in hard-to-staff Ohio school districts, with priority given to students who graduate from Ohio high schools.  
  • Makes changes to the distance learning clearinghouse.  
  • Creates a digital learning task force and digital learning textbook program, and requires each state institution to submit a plan to reduce the student cost of textbooks.  
  • Prohibits an institution of higher education from denying benefits to a religious student group.  
  • Requires all presidents of state institutions to jointly establish by December 31, 2012 uniform statewide standards in math, science, reading and writing so college students can have a “remediation free” status.  
  • Changes qualifications for obtaining and holding an alternative resident educator license.

General Primary and Secondary Education Provisions

  • Provides an additional subsidy of $17 per student for schools rated “excellent” or “excellent with distinction.”  
  • Modifies how school districts may lease or sell real property, increasing opportunities for community schools.  
  • Makes significant changes in the governance and operation of community schools and prohibits them from collective bargaining.  
  • Requires school districts that are receiving Race to the Top funds to pay teachers according to a performancebased schedule beginning in the 2013-2014 school year, and allows additional payments of compensation to teachers who agree to perform additional duties.  
  • Modifies statewide standards and assessments.  
  • Changes licensure requirements for out-of-state teachers and modifies qualifications for the alternative resident educator license.  
  • Increases the number of Education Choice scholarships to 30,000 for the 2011-2012 school year and 60,000 for 2012-2013 school year.  
  • Increases the Cleveland Scholarship Program amounts and expands eligibility.  
  • Allows for Education Service Centers (ESCs) to enter into service contracts with other political subdivisions.  
  • Creates a pilot program in Columbus City Schools for low performing schools, and a pilot program in Columbiana County for a multiple track high school curriculum.  
  • Requires the Ohio Department of Education to develop a system to rank order all school districts, community schools and STEM schools using specific measures.  
  • Requires school districts with daily membership below a certain threshold to enter into agreements with ESCs.  
  • Modifies ESC requirements.  
  • Restricts what beverages may be sold by school districts.  
  • Allows school districts to submit a plan to the department of education to make up a maximum of three calamity days through lessons posted on the district’s web portal/site or provided as paper copies in “blizzard bags.” Any plan submitted must meet certain requirements.  
  • Allows school districts not subject to civil service the ability to terminate transportation employees and subcontract student transportation services under certain conditions.  
  • Creates college-preparatory boarding schools, which will be operated by private nonprofit corporations. School districts are not required to provide a child with a disability who is enrolled in a college-preparatory boarding school with a free appropriate public education under Chapter 3323, but must provide transportation on a weekly basis for each student enrolled in these schools.  
  • Removes requirements that school districts adopt their textbooks from the list provided by ESCs.  
  • Allows for a school district to enter into a contract exceeding the lesser of $500,000 or 1% of total revenue for the current fiscal year without certification indicating adequate revenue to cover the contract, provided the multi-year contract is for materials, equipment or non-payroll services essential to the education program of the district and provides savings as compared to the single year contract.
  • Requires the Governor’s Director of 21st Century Education to develop a plan for consolidation and shared services.  
  • Permits school districts to transfer unencumbered monies in its textbook and instructional material fund on July 1, 2011 to the district’s general fund.  
  • Increases Early Childhood Education funding.  
  • Eliminates the School Employees Health Care Board and transfers all assets to the Ohio Department of Administrative Services.  
  • Allows a municipal school district to prevent employees of a conversion community school from being subject to any future collective bargaining agreement.
  • Creates a procedure for school districts to obtain new conditional approval for a facility project where conditional approval lapsed because a district’s electors did not approve a ballot measure for necessary funding.  
  • Allows the Ohio school facilities commission to provide classroom relocation or replacement assistance necessitated by air, soil or water contamination impacting occupants of a school facility.  
  • Requires evaluation procedures for principals comparable to those used for teachers, but tailored to a principal’s duties, responsibilities and work environment.  
  • Requires the state board of education to develop a standards-based framework for the evaluation of teachers by December 31, 2011.
  • Requires school districts to adopt a standards-based teacher evaluation policy by July 1, 2013.  
  • Requires school districts to evaluate all teachers at least once each year by specific dates unless other statutory evaluation procedures apply.  
  • Allows school districts to evaluate teachers who received an “accomplished” rating on his/her most recent evaluation to be evaluated every two school years.  
  • Provides that seniority must not be the basis for a school district’s decision to retain or rehire a teacher, except when it must make a decision between teachers who have comparable evaluations.  
  • Restricts entitlement to sick leave.  
  • Requires school districts to give preference to teachers on continuing contracts when reducing the number of teachers it employs, but prohibits school districts from giving preference to any teacher based on seniority, except when making a decision between teachers with comparable evaluations.  
  • Allows the school district to assign any employee already assigned to a school building to also serve as the district’s gifted education coordinator, provided he/she is qualified.  
  • Requires school districts to encourage their students to take advantage of distance learning opportunities offered by the clearinghouse of interactive distance learning courses established by the chancellor of the Ohio board of regents.  
  • Requires individualized education programs (IEPs) to specify the manner in which students will participate in state achievement assessment.  
  • Prohibits a student from being disqualified from participating in interscholastic athletics solely because his/ her parents do not reside in the state, provided the student resides in the state with a relative with legal or temporary custody over him/her.  
  • Allows school districts to charge a fee to students eligible for free lunch for workforce-readiness training tools, equipment and materials within a career-technical education program.  
  • Allows school districts to designate “innovation schools” and provides procedure for a school to attain this designation.  
  • Requires the services provided under the Autism Scholarship Program to include an educational component.  
  • Requires school districts to have classroom teachers of core subject areas, in buildings ranked in the lowest 10% of all public school buildings according to the performance index score, register for and take all written examinations the state board of education requires for licensure to teach that core subject area and grade level to which the teacher is assigned.

Economic Development Programs

  • Establishes the Local Government Innovation Program for purposes of making loans and grants to political subdivisions; creates a 15-member council to evaluate projects; uses Public Works Integrating Committee structure for proposals to be submitted; and provides $45 million in funding.