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Mistake affects funding for many area schools

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By MARC KOVAC

C-N Capital Bureau

COLUMBUS -- Mistaken enrollment estimates will cost nearly 200 Ohio school districts some of their state funding next year, while 100-plus others will receive more.

In total, 188 districts will see a decrease in the state hold-harmless payments they will receive in August, October and May, while 116 will receive increased funds, according to a spreadsheet compiled by the Ohio Department of Education. Another 309 districts will not experience any changes in their payments.

The situation stems from tax reforms implemented by lawmakers several years ago, including the phase out of the tangible personal property tax and the implementation of the commercial activity tax. The change meant an initial decrease in funding for school districts, so lawmakers put into place a hold harmless mechanism, through which the state reimburses districts for the revenues they would have received from tangible personal property tax collections, said Scott Blake, a spokesman for the Ohio Department of Education.

The hold-harmless payments have been based on estimated enrollment for a coming school year. But corrections included in the state's biennial capital budget, signed into law by Gov. Ted Strickland Tuesday, call for future payments to be based on actual enrollment.

And looking at actual enrollment, state officials realized that some districts received too much and others not enough for the 2007-08 school year, Blake said. The largest of the former were in Groveport Madison Local in Franklin County ($767,817), Lancaster City in Fairfield County ($618,353) and Zanesville City in Muskingum County ($338,489). Others, like North Central Local in Williams County and Clay Local in Scioto County, owe little, $245 and $335, respectively.

At the other end of the spectrum, Middletown City School District in Butler County, South-Western City in Franklin and Bedford City in Cuyahoga will receive $1.5 million, $1.2 million and $667,427, respectively.

Area districts affected included:

-- Four of five districts in Defiance County owe the state: Defiance City ($3,314), Hicksville Exempted Village ($4,689), Ayersville Local ($24,032) and Central Local ($1,093).

-- One district in Fulton County owes the state: Wauseon Exempted Village ($97,808). One other will receive additional funds: Pettisville Local ($14,810).

-- Three Henry County districts owe the state: Holgate Local ($2,374), Liberty Center Local ($2,168) and Patrick Henry Local ($1,200). One other will receive additional funds: Napoleon City ($491,380).

-- Two districts in Paulding County owe the state: Paulding Exempted Village ($2,622) and Antwerp Local ($395).

-- Three districts in Putnam County owe the state: Columbus Grove Local ($1,146), Leipsic Local ($424) and Pandora-Gilboa Local ($1,208). Three other districts will receive additional funds: Continental Local ($10,720), Miller City-New Cleveland Local ($9,162) and Ottawa-Glandorf Local ($91,701).

-- Four districts in William County owe the state: Bryan City ($72,189), Montpelier Exempted Village ($95,052), Edon-Northwest Local ($40,018) and North Central Local ($338). Two others will receive additional funds: Millcreek-West Unity Local ($4,495) and Stryker Local ($35,879).

"We got wind of this about six weeks ago, that something was amiss," said Marc Robinson, superintendent of Wauseon Exempted Village Schools. The district will receive $97,808 less from the state for the 2008-09 school year.

"Anytime you have money you're anticipating, you have to think about what you will have to give up," he noted. "It's not an enormous amount but it's substantial, equal to one and a half teachers' salaries or a bus. It will force us to dig deeper into the budget to do the things we need to do.

"We knew the phase-out would have an impact," added Robinson. "We're working had to trim back where we can and sharpen our scissors just a little more."

At Montpelier Exempted Village Schools, the coffers will have $95,052 less for next year due to the state's readjustment on the tangible personal property tax.

"Obviously anything like that will affect us," said Montpelier treasurer Homer Hendricks. "We have a $10 million budget and when you take nearly $100,000 out of it.... It's been tight lately. It's a blow and we're concerned."

Hendricks noted that the district receives the funds in three payments throughout the year -- in August, October and May. For the 2007-08 school year, Montpelier received $428,953 in reimbursement.

"When you take a chunk out of that, it's a difficult pill to swallow," he added. "But we're at the mercy of the legislators."

Stryker Local Schools is among a handful of area districts that will benefit from the readjustment based on actual enrollment. With a $5 million budget, explained treasurer Richelle Oberlin, "we're happy to have it. It will help us continue to have revenues over our expenditures."

Benefiting from the recalculation is Ottawa Glandorf Local Schools, which will receive an additional $91,701 for the 2008-09 school year.

"This will help us considerably, with the price of fuel," said treasurer Kathy Fruchey. "It will definitely help."

The district has a general fund budget of $11.5 million and is funded from the state based on an enrollment of 1,430.

Napoleon Area Schools officials were unavailable for comment this morning.

(Also contributing to this story was education editor Jenny Derringer.)