Ross Local School District

Foundations of School Funding in Ohio

When Ohio became a state in 1803, no formal system for public education existed. Early families paid privately for schooling, which limited access for many children. In 1822, education advocate Caleb Atwater convinced state leaders to study the value of a public school system. Despite initial legislative resistance, citizen demand led to the creation of Ohio's common school system in 1825. This system was funded by a half-mill property tax and laid the foundation for public education in the state. The 1851 Ohio Constitution cemented the state’s responsibility by requiring the General Assembly to provide a “thorough and efficient system of common schools,” setting the legal expectation for equitable access to education.

Property Tax and House Bill 920

Ohio’s public schools have long relied on local property taxes for funding. However, in 1976, House Bill 920 drastically changed how property taxes support schools. The bill froze the amount of revenue a school district could collect from voted levies, even if property values increased. This means districts cannot benefit from inflation or natural growth in property values over time. As costs rise, schools must return to voters frequently for new levies just to maintain current services. This system disproportionately impacts communities like Ross that lack significant commercial tax bases, placing a larger funding burden on homeowners.

Impact of the Ohio Lottery

In 1975, Ohio introduced the state lottery with the promise that proceeds would support public education. While billions of dollars have been generated, these funds have not resulted in net new money for schools. Instead, lottery funds have often supplanted existing education funding in the state budget. As a result, the benefit to school districts has been marginal. In fact, the percentage of lottery proceeds dedicated to education has steadily declined over time—from 40% in the lottery’s early years to less than 30% in recent years—leaving districts no better off.

Impact of Property Tax Valuation

Ohio’s school funding formula is designed to consider a district’s “ability to pay,” which is largely determined by local property wealth. However, when property valuations rise, the state often reduces its share of funding to a district, assuming the district can now collect more locally. Because of House Bill 920, local revenue does not actually increase with rising property values, creating a funding gap. Districts are penalized for property value growth they cannot financially benefit from—resulting in greater reliance on local levies and a system that fails to reflect the real financial capacity of many districts.

An Unconstitutional System

In 1997, the Ohio Supreme Court declared the state’s method of funding public education unconstitutional in the landmark DeRolph v. State case. The court ruled that relying so heavily on local property taxes created wide disparities between districts, violating the constitutional requirement for a “thorough and efficient” system. Despite this ruling and several follow-up cases, the legislature failed to enact a truly equitable solution for more than two decades. As a result, many Ohio school districts—particularly residential and rural ones—continue to face significant funding challenges.

Decreased Funding with Increased Mandates

While funding from the state has failed to keep pace with educational needs, the number of state-imposed mandates has increased. Districts are required to provide a wide range of services—from special education and transportation to the Third Grade Reading Guarantee and College Credit Plus—often without sufficient funding. These “unfunded mandates” force districts to divert limited local dollars to meet legal requirements, further straining budgets. Additionally, tax policy changes, like the elimination of the Tangible Personal Property Tax and rollback reimbursements, have shifted even more of the funding burden onto local communities.

The Fair School Funding Formula

In 2021, Ohio began implementing the Fair School Funding Plan, a bipartisan effort to fix the long-broken funding model. The new formula is designed to more accurately reflect the cost of educating students and the financial capacity of each community. It prioritizes predictability, transparency, and adequacy of funding, and marks a significant step toward correcting decades of inequity. Now in its final phase of implementation, the plan faces continued scrutiny and political challenges. However, the Governor’s most recent budget proposal includes funding to complete the transition, signaling hope that Ohio will finally fulfill its constitutional promise to public education.

Conclusion

Ohio’s school funding history reflects a complex and evolving struggle to balance state support with local responsibility. While initiatives like the Fair School Funding Plan represent meaningful progress, significant challenges remain—particularly for districts like Ross that rely heavily on local support. As the funding system continues to evolve, Ross Local Schools remains committed to financial transparency, stewardship of taxpayer dollars, and ensuring that every student has access to a high-quality education.