Boardman schools seek new 10-year emergency tax levy

April 15, 2018 at 12:05a.m.

BOARDMAN

Township voters will decide in the May primary election whether to approve a new, 10-year emergency tax levy for Boardman Local Schools.

The levy would generate approximately $4.9 million per year and would cost the owner of a $100,000 home about $205 per year.

School district officials say additional levy funds are needed to offset the impact of a combination of factors:

A cap on how much state funding the district receives;

The phaseout of tangible personal property tax revenue;

The recent loss of property tax revenue from St. Elizabeth Boardman Hospital. The district was required last fall to refund nearly $1 million to Mercy Health after a new building at the St. Elizabeth Boardman campus received a partial tax exemption.

At a recent community meeting, district leaders characterized the situation as a financial crisis and outlined a “Plan B” that will be implemented if the levy fails. If the levy does not pass in May, the district will implement $1 million in budget cuts, including 12 teaching positions.

District officials say the financial problems have been building for years, with the hospital issue bringing it to a head.

HOW THEY GOT THERE

In 2005, the state began the process of phasing out the Tangible Personal Properties (TPP) tax, but has continued to reimburse local governments and school districts to make up for lost revenue. Due to the gradual phasing out of reimbursements, the Boardman district estimates it’s lost $8.5 million in TPP revenue since fiscal year 2014.

In fiscal year 2012, the district received $3.4 million in TPP reimbursements. This year, it will receive $519,768. In fiscal year 2019, it will no longer receive any reimbursements.

Then, beginning in fiscal year 2014, the state changed its school-funding formula.

Part of the formula is the State Share Index, which measures a district’s capacity to raise local revenue through property valuation and income factors, according to the state Office of Budget and Management.

Districts’ SSIs can range from 5 to 90 percent, with 5 percent being the wealthiest districts. This year, Boardman’s SSI is 34.8 percent, according to information provided by OBM.

Along with the new formula, the state Legislature put into place guarantees (those districts will not get less state funding than they received the year before) and caps (districts are limited in how much their funding can increase). The more guaranteed districts there are, the less money there is for capped districts.

Boardman is among the districts subject to the gain cap. This year, 188 of 612 school districts are capped, 333 are guaranteed, and only 91 receive what the formula says they should.

Currently, districts are capped at receiving no more than a 3 percent increase unless they are growing at a certain rate. Boardman is on the 3 percent cap.

“Nobody defends the gain cap. There is no legitimate school funding reason why you shouldn’t get all the money the formula says you should get. The gain cap is purely a budgetary reason,” said Howard Fleeter, a school funding consultant for the nonprofit Ohio Education Policy Institute.

In Boardman’s case, the state funding formula calculates it should receive more than $13.3 million this year. But due to the cap, it will receive approximately $3.9 million less than the formula says it should. According to information provided by the district, Boardman has missed out on nearly $25 million due to the gain cap since fiscal year 2014.

“That’s like a third of their [state] funding, so that is a significant thing,” Fleeter said.

District officials view the gain cap as unfair to local taxpayers.

“The districts on the formula, the districts on the guarantee are getting their money from the state. Capped districts, we have to go back to the people,” schools Superintendent Tim Saxton said. “They’re putting us in a situation where we have to go to our taxpayers, when more than two-thirds of districts are getting it from the state. ... That does not make a level playing ground.”

In Fleeter’s view, a fair solution would be to have all districts funded by the formula. He believes state legislators and the governor want to eventually eliminate the gain cap, as well. Next year, the state estimates the number of formula-funded districts will increase to 136.

“If the formula is right, everybody ought to get the money the formula says they’re owed,” Fleeter said. “If you think something is wrong with your formula, change your formula.”

Elected officials who represent Boardman agree the school-funding formula is problematic.

“We are funding schools in an unconstitutional manner because it is over-relying on local property taxes, and Boardman is a good example,” said state Sen. Joe Schiavoni of Boardman, D-33rd, who is running for governor.

“Boardman, on paper, looks like a wealthy school district. There is wealth in Boardman, but there are a lot of kids who are on free and reduced lunches. ... It’s not a wealthy suburb.”

The median annual income in the district is just below $36,000, and the district’s poverty rate as a percentage of average daily membership is 42 percent, according to information provided by the district.

Both Schiavoni and state Rep. John Boccieri, D-59th, pointed to the state’s funding of charter and other non-public schools as the issue.

“This for-profit model is crushing the public schools. That’s why you see all these public schools that are begging their residents for money,” Schiavoni said.

“The state has allowed this funding formula to pick winners and losers,” Boccieri said. “The folks that are winning are the charter schools.”

Boccieri noted several things he views as problematic, such as the state funding that follows students from public to, for example, charter schools; the heavy reliance on property taxes; and continued changes to public education by state legislators.

“I think the legislature is charged with the responsibility of funding our schools appropriately, and not putting it on the backs of local taxpayers,” he said. “To me, that is one of the least gratifying aspects of being a state legislator, is watching the local communities suffer while these decisions are made in Columbus.”

RESPONSE

School district officials pointed to ways the district has been responding to the looming financial situation for several years.

In fiscal year 2015, for example, the district began capping what it would spend on employees’ health care. That year, it was capped at $6.4 million. In fiscal years 2016, 2017 and 2018, it was capped, respectively, at $6.7 million, $7.1 million, and $6.4 million.

“It forced our employees to really look at what they were spending on health care costs, and made them take ownership. Skin in the game,” Saxton said.

He noted, too, that the district eliminated more than 15 positions during the 2011-12 school year; passed a levy in 2013; eliminated five positions through attrition in fiscal years 2016 and 2017; cut the budget by 5 percent each year in fiscal years 2016, 2017 and 2018; saved money by exchanging land with the township to relocate the district’s bus garage; and saved $114,000 this fiscal year by restructuring debt.

In terms of wages and salaries, staff did not receive anything additional in fiscal years 2014 or 2015. They received 1 percent raises in fiscal years 2016, 2017 and 2018.

No matter the outcome of the levy, the district plans to cut $500,000 by not replacing staff members who leave.

If the levy does not pass, the district will implement “Plan B.”

Saxton said even those steps – cutting 12 teaching positions, reducing classified staff, eliminating the district communications coordinator position, eliminating Mahoning County Educational Service Center administrative services, eliminating three bus routes, and increasing athletic fees – would not be a permanent fix.

“Plan B is just a Band-Aid to get us to next school year,” he said. “There could be a Plan C.”

He said if the levy passes, it will be a 10-year plan for the district.

“We have done our financial modeling,” he said. “We will still have to take a look at positions through attrition to make sure we are good stewards and staying lean.”