Oregon City Schools Seeks Additional Money from Ohio Taxpayers

The Oregon Board of Education met in a special meeting on November 27, 2007 to discuss seeking additional funds from taxpayers following a failed levy attempt earlier in the month. After 2 1/2 hours of discussion and deliberation, the Board unanimously approved putting a 5.9 mil operating levy on the March 2008 ballot, the same millage as the failed November, 2007 levy sought. The Oregon City School District will not collect funds from the March, 2008 levy until the following year.

While the proposed levy is for the same millage amount as the recently failed levy, due to revised property valuations from the Lucas County Auditor's office, the March levy will generate about $227,000 less revenue. To collect the same dollar amount through the March, 2008 levy as the November,2007 levy would have generated, the millage would have had to been increased to 6.28 mils. According to school board member Jeff Ziviski, "As a board member, and having the voters express there desire by failing the 5.9 mil levy, I could not in good faith ask for more only 3 months later."

The new levy of 5.9 mils in March, 2008 will generate $3,516,813 and cost the owner of a $100,000 home $181 annually. Due to recent property re-evaluations, one mil will garner about $635,000 now. Just a few years ago, one mil would have brought the District about $800,000.

House Bill 66, signed into law by Governor Taft on June 30, 2005, has had a severe impact on school funding. According to the Ohio Department of Taxation, "Ohio Personal Property Tax Reimbursement," House Bill 66 phases out the tax on the tangible personal property of general businesses. In theory, school districts' lost revenue is replaced for the first five years. However, in the following seven years the reimbursements are phased out entirely resulting in a loss of revenue to school districts like the Oregon City Schools.

According to the District's Five Year Forecast for Fiscal Year 2008, the District's revenue for tangible personal property tax is expected to decline from $7.7 million in 2007 to $2.17 million in 2012. Tax abatement revenue is expected to decline from $1.3 million in 2006 to just $75,000 in 2010. Total revenue for the District is expected to fall from $40 million in 2007 to $38 million in 2012.

Information available on the Ohio Department of Education's website shows in its CUPP Report that the District's total expenditure per pupil in fiscal year 2006 was $10,979.47. The state revenue per pupil was $3,307.77 and comprised 29.30 percent of the District's total revenue. In Oregon, the District's local revenue comprises 66.70 percent of the District's total revenue.

Statewide, the revenue per pupil average is $3,963.09, or an average of 41.85 percent of a district's total revenue. Notably, under the state school funding formula Oregon City Schools receive substantially less aid from the state of Ohio than the average school district statewide because Oregon City is considered a wealthy district. The average district's local revenue is only about 50 percent of its total revenue. That means that taxpayers in the Oregon City School District carry more of the burden for providing revenue for their schools. As a consequence, the District has to work even harder if it intends to pass a levy.

The board discussed in detail different options for obtaining additional revenue, including several types of levies and several millage levels. "An emergency levy seemed most beneficial based on the current financial situation of the district," said Ziviski. "The voters are not used to emergency levies and it would generate the sense of urgency that we need. But from a financial standpoint, it did not make any sense.

An emergency levy can be for at most 5 years, so as the collections of the phased out property taxes continue, the emergency levy would be expiring at the same time that we are feeling the impact of the complete phase out which is about $7 million annually. It would be just a temporary band aid to the situation and put us in worse shape. In fact, if we wanted to put a levy on the ballot that would fix the problem and keep us on our normal levy cycle of 4 years, we would need to ask the voters for a 10 mil levy and that just isn't an option."

Even if the 5.9 mil levy is approved by voters in March, 2008, the district is going to have to cut and additional $1.2 to $1.5 million for fiscal year 2008, which begins July 1, 2008. These cuts are in addition to the $2.5 million in internal cuts that were implemented for the current school year and explained in the District's Five Year Forecast. According to Ziviski, the District is assembling a list of potential cuts that will be discussed and reviewed at a future board meeting.

Ziviski urges citizens to come to the monthly meetings and public forums and learn first hand the information the District can provide about its financial situation. Says Ziviski, "There is a lot of misinformation and rumors floating throughout the district, and I encourage people get off the couch and hear our message first hand so they don't get inaccurate information from someone else. Also, voters in our area need to contact their state representatives and let them know that they don't like what is happening to their schools as a result of the tax cuts from 2006." The City of Oregon is represented by Senator Teresa Fedor and Representative Matt Szollosi.

In light of the financial problems forecast by the District under existing law, Ziviski believes that it is necessary to turn to the voters to help. However, he knows the district faces opposition from some voters. "This time around, I envision the district to be more active in getting out its message as to the need of the levy to pass," said Ziviski. "Our volunteers worked harder than I have seen them work for any past levy, but we had trouble getting out message out to a large enough population. This time we will be more vocal, more visible. I hate to have to ask the voters for additional funds to run the district, but I also don't want to see the school district being to decline. We have made great strides the past several years and want to continue to build on that, but we need help from the voters. It will be hard for the public, come March, to not understand why the district needs this money and what the effect of a failed levy will be."

Sources:

Interview, Jeff Ziviski, Oregon City School District Board of Education.

Ohio Department of Education, "Historical CUPP Report," Center for School Finance, Simulation Unit.

Ohio Department of Education, "The New CUPP Printout," Center for School Finance, Simulation Unit.

Ohio Department of Education, "Oregon Five Year Financial Forecast for Fiscal Year 2008."

Ohio Department of Taxation, "Ohio Personal Property Tax Reimbursement," Division of Tax Analysis.