Saturday, May 13, 2000
Taft searches for tax solution
Court order on schools a dilemma
By Spencer Hunt and Michael Hawthorne
Enquirer Columbus Bureau
COLUMBUS — Faced with an Ohio Supreme Court order to improve public school funding, Gov. Bob Taft and legislative leaders are preparing for an epic tax struggle by saying as little as possible.
Gov. Taft
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The high court ruling that the state must level funding between rich and poor schools pushes the governor and the General Assembly to spend billions of tax dollars they don't have. On Friday, Mr. Taft and Senate President Richard Finan echoed House Speaker Jo Ann Davidson's pledge not to raise taxes to get the money they need.
“The tax burden on Ohioans is already high enough,” said Mr. Taft, who took a day to read over the decision before responding.
However, the state's top three policy makers left a door open to proposals that would reduce school property taxes by increasing state taxes on income or sales.
If a family's total state and local tax burden does not increase, politicians could argue they are swapping taxes, not raising them.
Recognizing that any shift in taxation will be difficult to pass, the governor and Mr. Finan tiptoed around the issue. Instead of offering specific plans, they made promises to work together.
“I'm not sure where we'll be or what the solution is,” Mr. Taft said. “It's a complex problem.”
“I don't know if a swap is a tax increase,” said Mr. Finan, R-Evendale. “As far as I'm concerned, there's not
going to be any tax increases.”
The political stakes could not be higher. The Supreme Court's decision effectively orders the state to reduce school property taxes to narrow the funding gap between rich and poor districts.
It also pushes officials to try again to define the cost of an adequate education, provide funding for new academic and financial standards, improve plans to fix school buildings and to eliminate a loan fund for districts in financial trouble.
The overall cost could be several billion dollars a year, far more than the $1 billion cash surplus in the state budget. Mr. Taft and Ms. Davidson said all attempts to increase funding for schools would begin with surplus money.
The last time lawmakers made a serious attempt to reduce school property taxes, they failed.
In 1998, voters rejected 4-to-1 a penny-per-dollar sales tax increase that would have raised up to $1.1 billion a year. Championed by then-Gov. George Voinovich, the proposal would have raised school funding by $550 million, while committing the same amount to property tax relief.
Political leaders still argue about why the issue sank. Some think it reflected a general aversion to tax hikes. Others note that voters approved more than half the local school levies on the same ballot.
The sales tax increase also was opposed by the people it was intended to help — school officials — who argued it wasn't enough to fix the problem and would have forced them to return to skeptical voters for property tax increases.
Despite state leaders' anti-tax talk, they grudgingly concede it's unlikely they can fix the problem without finding new sources of money.
After the last school-funding decision three years ago, Mr. Finan scolded then-Ohio Treasurer Ken Blackwell for suggesting a no-tax alternative.
Mr. Blackwell, a Cincinnati Republican who was considering a bid for governor at the time, said the state could have raised $3.7 billion for schools by dipping into reserves, restricting spending and earmarking unexpected tax collections.
“A man in your position does not have the luxury of making what appear to be fiscally irre sponsible generalities without providing that alternative plan in detail,” Mr. Finan wrote in a caustic letter to Mr. Blackwell.
Mr. Finan had his staff review the state budget for possible cuts. He said 86 percent of it is effectively off-limits because it funds schools, federally mandated programs such as Medicaid, and debt payments.
Of the 14 percent left, the Senate GOP staff found nearly $800 million in potential savings. But it would require that university branch campuses and the state departments of agriculture and development shut down, Mr. Finan said in the letter.
Other cuts would have abolished veterans' subsidies and forced the Department of Natural Resources to sharply increase fees for state parks and hunting.
“I presume you would not want to eliminate all funding in that list,” Mr. Finan wrote.
On Friday, the governor pledged to work with a joint House/Senate committee that Mr. Finan and Ms. Davidson will form in response to the court decision. The State Board of Education already had consultants working on the issue and plans to come up with a set of school funding options this summer.
Like the governor and the legislative leaders, State Superintendent Susan Tave Zelman would not say if she or the board would ask for a tax increase.
“I believe we all have to come to the table and work out a stable, reliable and adequate solution for our schools,” Ms. Zelman said. “We look forward to serving as a resource to state leadership.”
Mr. Taft and Ms. Zelman also offered an olive branch to the Ohio Coalition for Equity and Advocacy, the group that represents more than 500 of the state's 611 school districts.
Both said the coalition, which successfully sued the state for changes, should be a part of any future discussion about a funding solution. Neither would say how much of a role the coalition would play.
Those comments echo similar statements from William Phillis, the coalition's director, who on Thursday demanded to take part in the latest school reform effort.
Said Mr. Phillis: “We are willing and ready to help with that task.”
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