COLUMBUS - Gov. Bob Taft's State of the State speech this week stands as a critical point among the governor, legislative leaders and an Ohio Supreme Court insistent on redoing the way the state's schools are funded.

        Last year the court flunked the state's first attempt to reform school funding and sent the General Assembly back to the blackboard with stern orders to try again.

        Eight months later, Gov. Taft says he has a plan that would dramatically improve the education Ohio's 1.8 million students receive - and it won't raise taxes. He promises to unveil his ideas Wednesday, during his annual State of the State address.

        Mr. Taft and his staff declined to discuss details of the plan.

        But a proposal that would have pooled school property taxes in a statewide fund blew apart weeks ago after lawmakers rejected it. Another, featuring expanded kindergarten and special education programs, also faces criticism.

        Now many lawmakers appear poised to push their own plan.

COMPETING PLANS

Here is a look at two proposals intended to reform the way the state funds public schools. Gov. Bob Taft and the Ohio General Assembly face a Supreme Court-imposed June 15 deadline to fix the funding system.   LEGISLATIVE PLAN   This proposal was created by a joint committee of legislators formed to examine school funding solutions. It would:   • Increase schools' minimum per-student spending from $4,294 this school year to $4,556 in 2001-2002. The minimum spending level would increase again to $4,694 in 2002-2003.   • Ensure school districts spend no more than .03 percent of property taxes on special education, transportation and vocational training. The state pays any difference above the .03 percent level.   • Create a fund that would let school districts spend money above and beyond per-student minimums. Poor school districts would get the lion's share of these funds.   Cost to state: up to $800 million in the first year.   DEPARTMENT OF EDUCATION   The state agency outlined its reforms in its budget request. The agency would:   • Increase minimum per-pupil spending from $4,294 this year to $4,583 in 2001-2002 and raise it again to $4,873 in 2002-2003.   • Increase funding for special education services and personnel by $168.3 million over the next two fiscal years.   • Spend $57 million in two years to help schools create all-day kindergartens.   • Spend $90.6 million over the next two years to expand summer schools and “extended learning” classes for at-risk students.   Cost to state: $1.3 billion over the next two fiscal years.   Sources: Final Report of the Joint Committee to Re-Examine the Cost of an Adequate Education. The State Board of Education's FY 2002-FY 2003 Policy and Budget Recommendations.

        “The governor can say what he wants and what he thinks we'll need, but we're the ones who have to go ahead and craft the policy,” said Sen. Doug White, R-Manchester, chairman of the Ohio Senate's Finance Committee.

        Nonetheless, the governor's speech will start the process.

        “We may come at things from a different perspective,” said Brian Hicks, Mr. Taft's chief of staff. “But at the end of the day, we're going to have a plan all parties agree to.”

        The political stakes are seldom higher than this.

        Mr. Taft and legislative leaders face a Supreme Court-imposed June 15 deadline to end serious funding inequities between the state's rich and poor schools.

        A 4-3 ruling issued in May orders the state to spend millions to eliminate property taxes as schools' main source of funding. Lawmakers also must try again to redefine the cost of an adequate education, provide funding for new academic standards and improve a plan to fix crumbling school buildings.

        This tough challenge comes at a time when the state is struggling with its own finances. Spiraling Medicaid costs and sluggish tax revenues have budget officials warning of an impending cash crunch.

        Caught between the court and the economy, Mr. Taft and legislative leaders are embroiled in a political struggle that already has destroyed one plan the governor favored.

        An administration proposal floated weeks ago would have funded public schools by swapping a portion of the property taxes collected from homes and businesses with a statewide property tax.

        The plan withered under criticism from suburban lawmakers and school officials who didn't want to lose revenues to other schools.

        “I hated it,” said Mr. White, who called the idea an attempt to shift control of local school policy to the state.

        Mr. Hicks said the governor now favors elements of a different plan drafted by the Ohio Department of Education.

        The agency would increase funding in a formula designed to ensure all schools provide a minimum amount deemed necessary for an adequate education for each student. This year that amount equals $4,294 per pupil.

        The agency would increase that to $4,583 per student in the 2001-2002 school year and raise it again to $4,873 in 2002-2003.

        The proposal also calls for a $168.4 million expansion in special education services over the next two years. Another $57 million would be spent to start creating all-day kindergartens in Ohio schools.

        Some lawmakers wonder how all-day kindergartens and special education services would satisfy the high court's demands. Education officials also admit many schools do not have classroom space available to install all-day kindergartens.

        Meanwhile, Senate Republicans have their own plan, created by a joint committee of lawmakers Dec. 31.

        Like the Department of Education's plan, lawmakers favor similar increases in schools' per-pupil spending levels.

        This plan, however, would ensure that school districts pay no more than .03 percent of property taxes on special education, vocational training and transportation costs.

        It also would create a separate fund all school districts could tap to pay for things that go beyond what's needed to provide a basic and adequate education. Poor schools would get the lion's share of this money.

        One of the architects of the Senate plan, Sen. Jeff Jacobson, R-Brookville, said it does more to address the Supreme Court's concerns.

        “It reduces over-reliance on the property tax,” he said.

        In the House, Speaker Larry Householder, R-Glenford, has been relatively quiet. Mr. Householder would not say whether he will offer his own plan or try to work out a compromise between the governor and the Senate.

        “We're just trying to make sure we'll be in a position to have a plan that will be widely acceptable in the House,” Mr. Householder said.

        One big problem is money. The Department of Education's plan would cost more than $1.3 billion over the next two fiscal years. Some estimates of the Senate plan put the first year cost at $600 million to $800 million.

        Mr. Jacobson, however, described the Senate plan as a framework that can be changed depending upon how much money legislative leaders are willing to spend.

        The public won't know for certain how much the governor's plan will cost until he unveils his budget plan Jan. 29.

        Whether any one of these proposals will actually put an end to the lawsuit before the Ohio Supreme Court is another question.

        Bill Phillis, leader of a coalition of schools and teachers that have twice successfully sued the state over funding did not sound happy with lawmakers' ideas so far.

        “The (budget) numbers will eventually determine if education is a priority,” Mr. Phillis said. “That doesn't mean the court will automatically declare the system constitutional.”

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