February 2017 - State Funding Formula & Perrysburg Schools

By Pam Harrington, Perrysburg Schools Treasurer and CFO

Ohio public school districts receive funding from the federal, state and local governments. Federal funding is primarily focused on addressing a specific issue, such as reading achievement. The State of Ohio applies a formula to each public school district to determine its funding level.

In Perrysburg, property taxes and income taxes are collected at the school district level. Local dollars make up 64% of Perrysburg School District’s funding, compared to the state average of 40%. State funding comprises only 27% of our school district’s funding, while the state average is 46%.

To determine the state’s Foundation Payment, a calculation is made based on four factors and is multiplied by the number of pupils in our school district:

• Valuation Index—a three-year average of all property values in our school district
• Income Index—compares local versus statewide three-year average adjusted gross income per pupil using tax return data
• Wealth Index—uses census data to determine the wealth of our community relative to other communities in the state
• State Share Index—calculated once every two years to coincide with the State’s biennial budget

Once the calculation is made, the state makes adjustments, most notably the “Guarantee Fund” and the “Cap Limit.” The Guarantee Fund ensures each school district will receive at least as much as it did in the previous year, regardless of the four-factor calculation’s outcome as listed above. The Cap Limit prevents any school district from receiving more than a 7.5% increase in funding, regardless of the outcome of the four-factor calculation. For example, if the district is growing rapidly, the growth in state funding will not keep pace once it exceeds a 7.5% increase. The Foundation Payment is disbursed to Ohio school districts twice per month, and is re-calculated each time to ensure any changes are included, such as a change in enrollment.

Perrysburg is considered a high-wealth district, and we are also the 26th fastest growing school district in the state. These factors combine in such a way that the amount of state funding available to us is capped. Perrysburg Schools receives less than average state funding and therefore needs to compensate at the local level by asking voters to support property tax issues, such as this past fall, when our voters approved a continuing operating levy renewal, guaranteeing 27% of our funding, for which we are very grateful.

We do our best to communicate our accomplishments as well as our needs with the community, as this is a complicated but important story to tell. By working hard for the funding we need, while continuing to trim costs wherever we can, Perrysburg Schools works hard to ensure all students achieve their greatest potential.