BY MARK SKERTIC
The Cincinnati Enquirer
Ohio Supreme Court Justice Francis Sweeney didn't sugarcoat the court's feelings when he wrote the decision that struck down the state's school funding system as unconstitutional.
The present "financing scheme" was unfair to districts and cheated children. The state has shirked its "obligation by espousing cliches about "local control,' " he wrote in March 1997.
Justice Sweeney was emphatic that the system was underfunded and relied too much on property taxes. The court told lawmakers that they needed to make changes and spend more money.
But the justices did not say how much.
Gov. George Voinovich and state lawmakers think $1.1 billion raised through a sales tax increase is enough to appease the justices and get the school funding system out from under court scrutiny. Opponents of the plan -- a force that includes anti-tax groups, the coalition that successfully sued the state and the Ohio Federation of Teachers -- call the plan ill-conceived or woefully short of what's needed.
On Tuesday, voters will decide Issue 2, a plan to raise the sales tax a penny on the dollar. Neither supporters nor opponents can say whether the tax or the spending plan would be enough to ultimately satisfy the Ohio Supreme Court.
"If a billion dollars isn't enough, I don't know what we're going to do," said Donald Berno, president of the Ohio Public Expenditure Council, a non-partisan Columbus-based group that studies taxes and the state economy.
"Let's say Issue 2 is defeated and the Supreme Court says this plan isn't what they were looking for -- what's the legislature going to do then?" said Mr. Berno.
Mr. Voinovich thinks a penny increase in the sales tax is the maximum voters can stomach. That money would be split evenly between schools and a property tax break for homeowners of up to $275 annually. "We're giving them $500 million," he said, referring to the plan's foes. "They want $4 billion. They don't want to go back to the voters anymore."
The lawsuit that prompted the court's decision was filed in 1991 in Perry County. The justices didn't consider any of the changes the state had made since that time when making their ruling last year.
Since 1991, state funding for primary and high school education has increased $1.8 billion, about 47 percent, supporters of the tax argue. That amount includes money from the Ohio Lottery and property tax reimbursements made to school districts.
The state could have argued it already met the court's mandate with changes made in recent years, but "instead of putting my head in the sand, I said "Let's see if we can take this one step further in the road,' " Mr. Voinovich said.
Those changes have included more spending on school repair, and requirements that districts allot certain portions of their budget to maintenance, textbooks and building a rainy-day fund. The state has also revised many academic requirements, among them a new, 10th-grade exam required for graduation.
"I would hope that the court would look at this in the context of the other moves that the General Assembly has made over the last few years, including what they put into the '98 and '99 budgets," said Robert Wehling, a senior vice president at Procter & Gamble Co., who has played a major role in the pro-Issue 2 campaign.
"Look at it as a package and say, "Does that get us most of the way toward where we want to be or not?' My personal guess is, yeah, it would."
But opponents of the state's efforts say they fall far short of meeting the court's mandate for change and improvement.
Sales taxes place an unfair burden on the lower and middle classes because larger percentages of their incomes go to pay the higher costs. The state still won't provide enough for needed building repair or special education, vocational and gifted-student programs. And there isn't enough new money for basic educational costs, say Issue 2 foes.
"They still haven't gotten to the root of the problem -- that school districts still have to rely too much on property taxes," said William Phillis, executive director of the coalition of school districts that successfully sued the state.
"Although the state didn't order it, what they need to do is look at systemic reform of the whole system, including property taxes," he said.
Property taxes remain the great concern for many school administrators. Property taxes provide more than half the general operating revenue for many school systems.
The inequities inherent in the property tax system -- in an area with a rich property base it is much easier to raise money -- were singled out for criticism by the Supreme Court justices.
"The evidence is overwhelming that many districts are "starved for funds' and lack teachers, buildings or equipment," Justice Sweeney wrote.
Reforms to Ohio property tax law were not considered by lawmakers during the flurry of changes in school funding. But fears about having to soon return to voters for property tax increases have prompted many districts to oppose Issue 2.
"I hate to turn down money, but this isn't going to do it in the long term, and that's where I have to look," said Cincinnati Public Schools Treasurer Richard Gardner.
Because of recent state changes in school funding, his district will receive $9.8 million more next year, a 10 percent increase. But CPS has property tax levies that raise more than $65 million annually expiring over the next few years. District officials and school board members say they're worried voters who support a sales tax increase won't be willing to pass needed property tax renewals.
In the Jackson City Schools in south-central Ohio, the concern is that even with the state's reforms and promises of new money, the district will still be in an inextricable financial hole. Property values are low, and state funding is inadequate to meet even state-mandated spending, said Treasurer Ernie Strawser.
"The main thing is still inequity -- I haven't seen anything that shows this is an answer to inequity," he said.
The district, with 2,750 students, is like many in the state. Low property values make it difficult to raise much locally. Recent academic mandates, including offering new high school requirements, will cost the district $300,000 more next year.
The state will give Jackson schools a 3.9 percent increase next year, equal to about $300,000. That's not enough to cover past unmet needs, take care of new state mandates and deal with inflation, Mr. Strawser said.
Opponents of Issue 2 say the sales-tax plan is inadequate because this is a once-in-a-generation chance to formulate a school funding system that will meet the needs of poor districts like Jackson and urban district like Cincinnati. The state needs to reconsider its entire budget and come up with a plan it can afford and that will provide a quality education, Mr. Phillis said.
"The state needs to sit down and define the problem," he said. "Let's decide what's a fair and equitable tax system."
