Officials seek help for schools as power plants lose value
Schools that are losing funding due to the closure or devaluation of power plants in their districts should receive relief from the General Assembly, Sen. Terry Johnson (R-McDermott) said on Wednesday, June 3.
“We broached the idea of this legislation when multiple school districts within the 14th Senate District experienced significant local revenue losses from power plants that saw major decreases in their property value,” Johnson told the Senate Finance Committee during sponsor testimony on SB313. The committee also heard proponent testimony from a number of school representatives including River View Superintendent Dalton Summers.
“These districts have had to make several difficult decisions that have a negative impact on their schools, and ultimately Ohio’s students,” Johnson continued. “As we looked into this issue further it became apparent that this does not just affect the schools in our district, but multiple districts across the state.”
Johnson said the bill would allow the “0.028 adjustment” despite the freeze in state funding for FY20 and FY21. “This adjustment to a district’s share of foundation aid is triggered when a district experiences a change in its valuation of 10 percent or more, “Johnson said.
The bill would also address a clawback of state aid from Felicity-Franklin Local School District, Johnson said, adding that the provision will also provide some funding to Weathersfield Local Schools and Lowellville Local Schools.
“It should be noted that SB313 does not appropriate new dollars from the General Revenue Fund (GRF),” Johnson said. “Instead, the bill utilizes an existing set-aside in state foundation funding that has sufficient unexpended dollars to provide relief to these impacted districts.”
According to a Legislative Service Commission (LSC) fiscal analysis, the bill would provide an FY20 payment of $2.7 million for four districts. Three additional districts would receive one-time payments from the GRF totaling approximately $545,000.
Proponent testimony was provided by Barbara Shaner, advocacy specialist for the Ohio Association of School Business Officials (OASBO). She was joined by Will Schwartz, deputy director of legislative services for the Ohio School Boards Association (OSBA), and Kevin Miller, director of governmental relations for the Buckeye Association of School Administrators (BASA).
“The districts with electricity power plants within their borders have enjoyed the benefits of the value of public utility facilities in their tax base in the past. However, the residents in these districts are typically not wealthy,” Shaner said. “In fact, power plant school districts’ residents tend to have a lower median income and a higher percentage of poverty than the state average. Therefore, it is more difficult for these districts to use local means to offset the loss of property valuation and tax revenue resulting from the devaluation of public utility property, and in extreme cases, closure of the power plants.”
While they support the bill, Shaner said OASBO, OSBA and BASA are recommending a couple changes to provide more support for school districts.
“We believe an adjustment to the threshold for the initial valuation test (i.e., a 10 percent change year-over-year rather than over a two-year period) would bring in one additional school district, River View Local Schools in Coshocton County, that has seen significant reductions over the past several years due to power plant devaluations,” Shaner said.
“The second modification would provide more significant relief to those districts, who under the previous flawed school funding formula were on the ‘guarantee’ and therefore the payment produced by the recalculation in SB313 will only provide for very small payments relative to the loss in local property taxes,” Shaner said.
In addition to Summers, proponent testimony was also provided by Dave Gibson of Felicity-Franklin Local School District, Jude Meyers of Gallia County Local School District, Tracey Miller of New Richmond Exempted Village School District, Jack Thompson of Perry Local Schools, and Victor Bowman, Brian Rau and Eva Elliot of Manchester Local School District.
Category: Education
