COLUMBUS — Just before punting its proposed budget to the Senate, the Ohio House added $80 million in hopes of easing some of the pain the plan holds for school districts.

But spreading roughly $40 million more a year across Ohio’s 613 districts amounts to little more than an aspirin, with the vast majority still facing painful budget cuts, school leaders say.

“It did not ease our pain. Absolutely not,” Port Clinton Superintendent Patrick D. Adkins said. The Ottawa County district fares only slightly better under the two-year plan passed by the House. Port Clinton faces an overall state funding cut in the two-year budget’s first year of 26.7 percent, compared to a cut of 27.9 percent under Gov. John Kasich’s proposal.

The district, which has about 1,800 students and an annual budget of nearly $20 million, is looking at a cut of about $1.4 million next year and then an additional $83,668 in the second year, according to figures from the Ohio Legislative Services Commission.

These numbers reflect the loss of federal stimulus dollars that temporarily shored up school budgets, as well as stepped-up efforts by the Kasich administration to wean school districts off state money that compensated for the loss of revenue for a pair of business and utility taxes that have been phased out.

Mr. Kasich has urged school districts not to turn to local taxpayers to make up the difference, arguing that a tax increase would hurt the business climate regardless of whether it happens at the state or local level. But Mr. Adkins said the state cuts leave the district with little choice.

How Toledo fares

For Toledo Public Schools, the added funds from the House translate into a 6.9 percent cut in the first year, just 0.1 percentage point better than what Mr. Kasich proposed. The difference in the second year is barely detectable.

By comparison, the largely residential, wealthier Ottawa Hills is a rare case of a district that could see a nearly 5 percent bump in its state funding in 2013 after an 18.7 percent cut in 2012 under the House plan. Despite its faring better than most districts in northwest Ohio, Superintendent Kevin Miller said the district is struggling to keep its head above water.

“We passed a 7.6-mill operating levy last November,” he said. “But when I look at the numbers, we are wiping out over the next couple of years a huge percentage of that. Almost 75 percent of that is lost already. Obviously, this community does what it needs to do locally but, boy, the bar is set higher and higher.”

If state funding levels hold, he said, the state should give districts more flexibility in how they spend the money they do receive.

He said the House’s adding a provision to the budget to require districts to maintain funding for gifted education programs, without adding money specifically for that purpose, is a “perfect example” of an unfunded mandate.

Schools are banking that the Senate will pick up where the House left off in adding funds to schools.

Statewide, Mr. Kasich’s budget of $6.8 billion in direct basic subsidies to schools for next year represents a cut of 9 percent from what districts now receive, once basic state aid, one-time federal stimulus dollars, and tax reimbursements are factored in. The House proposal, in comparison, reduces that cut to 8.5 percent.

The plan for 2013

In 2013, both proposals include an additional cut of roughly $6.7 billion, or 2.5 percent.

The House-passed plan also dangles $50 million a year in incentives before districts to share services and costs, although it’s unclear how many districts would take advantage of the offer.

Schools hope that larger-than-expected tax collections seen so far this year will mean lawmakers will have a larger pot of funds to work with before a final plan reaches Mr. Kasich’s desk before the fiscal year ends on June 30.

Toledo Superintendent Jerome Pecko said he doesn’t expect the budget numbers to change dramatically because the governor and General Assembly leaders are of the same party. But he said K-12 schools should be first in line for any additional revenue that becomes available.

“Absolutely,” he said. “We’ve taken a big hit. We know other entities out there have as well, but for us this has been going on for a couple of years. … We should be at the of the top of list.

“The last few years we’ve been living off of [federal] stimulus dollars,” Mr. Pecko continued. “We’ve been using those dollars to keep our budget balanced. Since those are dropping off, to have the state continue to cut our foundation revenue is really Mission: Impossible for districts to try and operate.”

Increasing revenue

Through the end of April, Ohio had collected nearly $841 million, or 6.1 percent, more in tax revenue than had been projected.

If the trend continues over the remaining two months of the fiscal year, lawmakers could have $1 billion more to play with than the House anticipated when it passed its $55.6 billion, two-year budget.

However, competition for those added funds will be fierce. Social service advocates and schools say they should be first in line.

The House largely ducked the issue of nursing home funding, leaving in place for now the major Medicaid cuts that Mr. Kasich proposed. House Speaker Bill Batchelder (R., Medina) has said negotiations will take place with the Senate on that issue. Nursing homes are likely to be major beneficiaries of the higher-than-expected revenue.

But, with his first budget not even adopted yet, Mr. Kasich is already talking about a possible tax cut in the plan’s second year on top of the House-proposed elimination of Ohio’s estate tax beginning in 2013.

And then there’s the question of whether Ohio should at least use some of the excess to begin replenishing fiscal reserves that have been depleted over the last few years.

“We are all aware that the revenue numbers are improving, but we want to be prudent and do the responsible thing,” said Sen. Mark Wagoner (R., Ottawa Hills). “It’s fair to say there may be more money available than there was in the House. My preference, if we are going to spend additional dollars, is to try to spread it around, but the first priority should be investing in education.”

Challenges along lake

Although the House-passed budget helped their situation slightly, Mr. Wagoner said he is still concerned about the major cuts facing lakefront districts Port Clinton and Danbury.

“Danbury is the number-one impacted district,” Mr. Wagoner said. “It’s a hollowing effect. It’s a high-property-wealth district because it’s lakefront property, but that isn’t reflected in the actual wealth of the community. They have very difficult times getting levies passed.”

Maumee City Schools would receive $7.3 million from the state under Mr. Kasich’s proposal, an overall cut of 15.6 percent, in the first year of the biennium.

The House budget would increase aid to $7.4 million, but that would still represent a 15 percent cut. In the second year, the Kasich plan holds an additional 5.9 percent cut compared to a slightly better 5.7 percent under the House plan.

Superintendent Greg Smith said that after reduced property valuations are factored in, the district will lose about $2.2 million next year.

“We have for the last six years cut 46 staff positions to reduce the budget by approximately $3.8 million,” he said. “Next year we’re closing an elementary school and looking at reducing eight positions to come up with $1.3 million in additional cuts. But from what we’re losing and what we’re cutting, we will barely be balanced next year.”

In addition to adding cash in the next biennium, the House-passed plan offers schools additional hope because it would shelve, beginning in 2014, Mr. Kasich’s plan to accelerate the pace at which the state is weaning schools off state dollars that replaced revenue from a pair of business and utility taxes that have been phased out.

The plan, however, does nothing to deal with the two-year phaseout of that revenue in the current budget.

Port Clinton was heavily reliant on revenue from both taxes, and Mr. Adkins said the district did not see the acceleration of the phaseout coming when planning for state budget cuts.

Ohio schools are not alone in facing cuts.

As states plan for fiscal year 2012, many, including Michigan, have either enacted or proposed significant cuts to K-12 education, according to the National Conference of State Legislatures.

Cuts in Michigan

Michigan Gov. Rick Snyder initially proposed a 5 percent cut, but recent negotiations have worked to close that gap and, like Ohio’s, Michigan’s plan would offer incentives for schools to cooperate with one another.

South Dakota cut K-12 funding by 6.6 percent, according to the National Conference of State Legislatures. Idaho recently cut public schools by 1.3 percent, a cut that would have been much deeper if not for federal funding for a teacher jobs program.

“States are entering their fourth year of significant budget gaps, and everything and anything is truly on the table” said Todd Haggerty, a fiscal policy analyst for the conference of state legislatures. “K-12 is a large part of general fund budgets, often the largest component, so it is unfortunately one of the areas states are looking at.”

States including Ohio avoided major cuts in K-12 education subsidies earlier in the recession, thanks to a large extent to federal stimulus dollars that bolstered state and school budgets. But those dollars are now drying up.

“The federal stimulus funds, along with the maintenance-of-effort requirements that went with them, helped to protect education budgets to some extent,” Mr. Haggerty said.

“But now, with the stimulus gone and budget gaps in their fourth year, everything and anything is on the table, including new sources of revenue. When you’re feeling the prolonged effects from the recession, the cuts become increasingly more painful.”

Contact Jim Provance at: jprovance@theblade.com or 614-221-0496.

First Published May 23, 2011, 5:00 a.m.