Tuesday, September 19, 2006

 

$5 Billion in New Taxes or $5 Billion in Spending Cuts: Which Is It?

Secretary of State Ken Blackwell's proposal to increase the state share of the cost of K-12 education funding in Ohio to 57 percent caused me to ask two questions, how much would it cost and where would the new dollars go? I posed the question to my colleagues Rich Marountas and Dr. David Ellis. Rich, being the king of Excel spreadsheets and formulas that he is, built a district by district spread sheet in the time it normally takes me to open Excel. David formulated a method to understand where the new money was going and where it wasn’t going, or even who might lose money.

We've posted a new report on our website that reflects our answers to these questions and here are the two major conclusions of their work:

Increasing the state share of overall K-12 spending to 57 percent would cost nearly $5 billion a year.

Under each scenario we examined, in terms of distributing the money, we found that wealthier districts tended to do better, in some instances much better, and that low-wealth districts, particularly those in rural areas tended to do worse and in one scenario could actually see their funding drop.

Of course the $5 billion dollar question is how this proposal would be paid for, because that’s where the rubber hits the road. It's also where the proposal seems to come up short. As far as I can see there isn't a plan for where these dollars would come from. There have been suggestions that the funds might come from Medicaid, but to fund an effort of this magnitude you would have to eliminate the entire Medicaid budget (not a very likely scenario). It's also difficult to see how you could fund a proposal of this magnitude and still live within the state appropriation limitation that was adopted by the legislature just a few months ago.

For those of you who want to look at district level information, just check out the Marountas spread sheet, it's a marvel to behold.

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