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State funding gap still looms for schools
(by Sue Hoffman - November 18, 2009)
State funding gap still looms for schools
By SUE HOFFMAN
As the Solon School District prepares for an operating levy this May, district Treasurer Timothy Pickana is leading a statewide effort to fix what no levy can realistically cover: a significant gap in the budget caused by the phase-out of the tangible personal property tax.
"We need to rally the troops," said Mr. Pickana, who is serving as president of the new Coalition for Fiscal Fairness in Ohio. Last week, he took the opportunity while attending the Ohio School Boards Association capital conference to galvanize support of school districts around the state. He also talked to Gov. Ted Strickland about the problem.
Until the phase-out began in 2005, the Solon School District was receiving $11 million annually in tangible taxes paid by Solon businesses. The taxes represented 15.8 percent of the budget, said Mr. Pickana, who has been serving as the district's treasurer since Feb. 1.
Currently, school districts are being "held harmless" for the losses through the commercial-activity tax, but state reimbursement is scheduled to be phased out from 2014 to 2018, according to House Bill 1, the budget bill passed last summer. Originally, the phase-out of the hold harmless provision was scheduled to begin in fiscal 2011.
"We believe we had an impact on the budget language to delay the hold-harmless phase-out," Mr. Pickana said about the coalition. "There were plenty of organizations fighting for it and we were part of that."
The original language in the budget bill called for making the hold-harmless provision permanent. Mr. Strickland vetoed that language but delayed the phase-out.
"The governor said he didn't want a short-term fix that will create a long-term problem in Ohio," Mr. Pickana said. "I told the governor we were disappointed in the line-item veto, but we're hoping that his delay of the phase-out means that he recognizes there's a problem that needs to be fixed."
Solon was one of five school districts that formed the Coalition for Fiscal Fairness in Ohio earlier this year.
"Solon is taking a leadership role," school board member Julie Glavin, who attended the OSBA conference, said Monday.
Board member Dorothy Seibert expressed gratitude to School Superintendent Joseph V. Regano and Mr. Pickana for their leadership. Mr. Regano helped form and led for many years the Alliance for Adequate School Funding, which represents the interests of the wealthier school districts in Ohio.
"The Alliance and Coalition are both on the same track and are complementary," Mr. Regano said. "The Alliance has not lost the battle," he said, and the delay of the phase-out of the hold-harmless provision "has saved tons of tax dollars."
At the same time, he said, "We needed to have a group that is singly directed at achieving this goal."
Mr. Regano commended Mr. Pickana for his leadership. "The district has the ability to attract high-capacity people, and Tim fits in that mold. His knowledge base is second to none. We have the right person to help us go forward."
The new coalition aims to include the districts that are most impacted by the loss of the tangible taxes as well as geographical representation, Mr. Pickana said. After establishing it as a nonprofit organization, coalition leaders are now focusing on a membership drive.
"We're sitting down and contacting districts a couple at a time," Mr. Pickana said.
The coalition is starting with six members, which include, besides Solon, the Princeton district in Hamilton County, in which the taxes represent 21.82 percent of the budget; Marysville district near Columbus, 15.15 percent; Benjamin Logan district in Logan County, 10.85 percent; Madison district in Richland County, with 10.49 percent; and Ontario district in Richland County, with 10.21 percent.
Mr. Pickana said Cuyahoga Heights, which stands to lose 21.67 percent of its budget, has given verbal commitment for membership.
Other districts in Northeast Ohio significantly impacted include Cardinal, in which tangible taxes represent 15.23 percent of the budget; Mogadore, 13.53 percent; Twinsburg, 12.79 percent; Brooklyn, 12.92 percent; Beachwood, 9.17 percent; Berea, 10.84 percent; and Mayfield, 8.67 percent.
As it picks up members, Mr. Pickana said the coalition aims to raise awareness and educate the community and lawmakers about the problem "which could devastate many school districts. I'm also concerned about the effects on the communities and the taxpayers across the state."
When the phase-out began, "businesses were not aware that the commercial-activity tax would be lost to the community," Mr. Pickana said.
School board President Margo Morrow said that the letters and e-mails from Solon citizens to their legislators continue to help raise awareness of the issues.
Board members also discussed the need for legislators to meet with the board on this problem.
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