Photo: Ohiohouse.gov
School leaders urge against budget cap
- Published: May 13, 2025
Last week, the Ohio Senate began holding committee hearings on House Bill 96, the state’s budget for fiscal year 2026.
The bill slashes public funding in a number of arenas, including cutting $40 million from public libraries and $120 million from clean waterway program H2Ohio, while also putting up $600 million to secure bonds for the construction of a new football stadium for the Cleveland Browns. The budget bill is set to dismantle The Ohio Housing Trust Fund — a funding source crucial for affordable housing development. Local nonprofit YS Home, Inc. is set to testify before the Senate this week; see next week’s News for more.
As the News reported last month, the bill also reduces the share of state monies public schools can plan to receive in the next few years when compared to projected rising costs.
The budget bill — passed by the Ohio House in April — will, if passed by the Senate as written, affect Ohio’s public school districts by eschewing the Fair School Funding Act, which aims to address the state’s overwhelming reliance on local property taxes to fund public schools.
HB 96 increases funding for public schools by $226 million, but falls short of the $666 million increase needed to fully fund schools, as calculated by the Fair School Funding Plan and does not keep pace with projected rising costs — but increases private school voucher funding by $500 million.
The bill also introduces a provision requiring school districts not to carry over more than 30% of their operating budgets at the end of each fiscal year. The provision would force school districts to spend, rather than save, potential carryover or return it to taxpayers by reducing local property tax rates; at the same time, school districts are already required by Ohio law to create five-year forecasts that show they maintain a positive cash balance or plan to address operating shortfall by putting additional levies before voters.
Superintendents and school boards around the state have been lobbying their local senators to vote against the budget bill as written, citing both its underfunding of public schools and the critical need for school districts to save unspent budget funds in planning for the future.
Locally, Superintendent Terri Holden entreated District 10 Sen. Kyle Koehler not to support the bill in early April, when she and other area superintendents met with Koehler to discuss how the budget would affect public schools.
Both Holden and school board member Dorothée Bouquet have corresponded with Koehler to reiterate those sentiments; the News was copied on emails to Sen. Koehler that laid out the district’s position that the bill, if passed, will cause pronounced harm to YS Schools.
A document prepared by Holden and Treasurer Jacob McGrath and sent to Sen. Koehler states that the bill — and, in particular, its carryover provision — “discourages responsible financial management,” “makes long-term planning difficult,” “encourages risky or wasteful decisions,” “pushes schools into financial trouble faster” and “applies unfair rules to schools that aren’t used for other government agencies.”
“No other government entities are given operating fund limits besides public schools,” the document reads.
Via email with the News last week, Bouquet — not speaking on behalf of the board, but as an individual school board member — noted that 76% of the district’s budget relies on local property tax revenue rather than state funding; the schools would require about $4.4 million more than it currently receives from the state to be fully funded without property tax revenue.
As the Ohio Supreme Court ruled in 1997, placing the responsibility of public school funding on individual municipalities — which differ greatly from place to place in terms of size and property values — creates an inherent inequity from district to district.
Bouquet pointed out that the budget bill as written, by discouraging school districts from carrying over funds, would likely widen the gap of inequity by forcing school districts to ask local voters to approve property tax levies more often and risking the failure of those levies.
“Districts like ours will be forced to ask voters for more money, more often, placing even greater strain on local communities,” Bouquet said.
What’s more, she added, the bill flies in the face of the wishes of many local residents, who have communicated to district leaders that they “want schools to be able to save over time for capital needs without constantly going back to the ballot.”
“The 30% cap would prevent that entirely, forcing us to either spend or lose those funds, and making public school finance less efficient by design,” she said. “Instead of saving wisely to avoid cuts and keep levies rare, we’d be forced to either spend unnecessarily or risk being penalized for our surplus. That means higher costs over time and fewer safeguards for the unexpected.”
Sen. Koehler responded to appeals from Bouquet and Holden last week, saying he’s received “hundreds of emails” and had “numerous conversations” — including with more than two dozen area superintendents — focused on the 30% carryover cap provision.
“I plan on bringing up your concerns and the concerns of others when we begin our deliberation and budget hearings starting this week,” Sen. Koehler wrote.
Bouquet told the News that she appreciates that Sen. Koehler has been “open to listening,” but “listening must lead to action.” She encouraged local residents to contact his office directly and urge the Senate “to remove the cash balance cap from HB 96 before it becomes law.”
She added: “Taxpayers can also encourage [Sen. Koehler] to explore the one idea that has garnered support among financial professionals and county auditors by capping growth on the 20-mill floor to a reasonable threshold — something like a maximum of 9% over three years.”
The 20-mill floor is a provision of Ohio law that safeguards school districts from losing property tax revenue. Because millage rates for most voted school district levies are lowered when property values rise to keep levies at the millage established when they’re passed, their values could be effectively reduced to zero over time; the 20-mill floor establishes a minimum millage rate for combined effective millage. For districts whose combined property tax rate reaches the 20-mill floor, tax rates begin to rise with property values to maintain an effective tax rate of 20 mills.
Encouraging lawmakers to steer away from a cap on operating budget carryover and instead focus on placing a limit on how much tax rates could rise when a district reaches the 20-mill floor, Bouquet suggested, could “address concerns about unexpected tax increases without dismantling local fiscal responsibility or overturning the will of the voters.”
The Senate is tentatively scheduled to vote on the budget Thursday, June 12.
Sen . Kyle Koehler can be reached at 614-466-3780 and koehler@ohiosenate.gov.
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