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School officials say state breaking promises
(by Sue Hoffman - April 14, 2011)
School officials say state breaking promises
By SUE HOFFMAN
Forgotten promises by the Ohio Legislature were addressed by school officials at last week's town hall community meeting at Solon High School.
"You're here to help us send a message," Solon School Superintendent Joseph V. Regano told the audience of parents, city officials, teachers and community members. The message is that the state needs to permanently reimburse school districts, as promised, for local tangible personal property taxes that were eliminated by the legislature, he said.
Mr. Regano and district Treasurer Timothy Pickana told about a stream of promises from governors and legislators over the last six years that the district would continue receiving reimbursement for lost tangible taxes.
"Machinery, equipment and inventory used to be taxed," Mr. Regano said. That tax on Solon businesses amounted to $10.7 million in 2004, he said.
In 2005, state officials said businesses were having a difficult time competing, and they wanted to change the tax structure to encourage businesses to come to Ohio, he said. "We said we could understand that.
"We were promised that the state would take money from the commercial activity tax and make the districts whole," Mr. Regano said. "We were promised that we would always be reimbursed."
With the elimination of the tangible tax, the state has reimbursed school districts at the 2004 level, which undoubtedly would have grown, school officials said. State budget bills have included a phaseout of that reimbursement.
The state legislature's biennial budget bill of June 2009 was amended to include permanent reimbursement of the tangible tax. Former Gov. Ted Strickland vetoed that provision but postponed the phaseout of reimbursement from starting in fiscal 2012 to fiscal 2014. He had said the provision "contradicts the overall direction of the comprehensive education system reform established in this bill."
"Gov. Strickland acknowledged that something needed to be done, and he needed a couple years to straighten it out," Mr. Regano said.
With term limits and a continual change of legislators, school officials have said they continually must educate new legislatures about the promise.
"Legislators felt it was unfinished business," Mr. Pickana said. "Their intention was to permanently hold harmless those districts impacted by 10 percent or more."
The Solon district stands to lose 17 percent of its operating budget, said Mr. Pickana, who has led the Coalition for Fiscal Fairness in Ohio to seek permanent reimbursement of lost tangible property taxes. Solon is in the top 10 of the most impacted districts in the state.
Gov. John Kasich's budget proposal moves the phaseout back to fiscal 2012, which begins this summer.
The district stands to lose $1.2 million for the next school year and $54 million over the next eight years from the phaseout, Mr. Regano said. The loss is in addition to a $1.3 million cut in state aid next year and nearly $80,000 each year for the next four years in tangible tax reimbursement related to the permanent improvement levy.
The loss would be devastating to the district, Mr. Regano said.
Mr. Pickana said the district receives only 5 percent of its funding from the state. The rest is in local dollars. "Now we're cut from 5 percent to 2 1/2 percent," he said.
"The intent in Columbus is clear: shift the burden to you," Mr. Regano told the audience.
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