Kettering Treasurer Says Local Cost Of Voucher Plan, HB136, Is $2.5+ Million Yearly — 2+ Mills Of New Taxes

Kettering School Treasurer, Steve Clark, estimates that, if Ohio House Bill 136 is approved, Kettering Schools will lose at least $2.5 million in state funding and, in order to recoup this lost revenue, the school district eventually will need an increase in local property tax of at least 2 mills.

HB136, also known as the Parental Choice and Taxpayer Savings Scholarship program (PACT), allows all of the state tax money allocated to a public school district to be spent on “vouchers,” to finance tuition to private schools. See my post: “Ohio’s Proposed Voucher Law HB136 — Should Tax Money Be Used To Fund Religious Education?”

HB136 has been approved by the House Education Committee and now will be debated by the entire House. Jim Butler, Kettering’s representative to the Ohio House, serves on the Education Committee and voted “Yes” to approve the legislation.

In a memo to the Kettering Board of Education, Mr. Clark explains that for every Kettering student who receives a voucher, $5,783 in state funding will be subtracted from funds that Kettering Schools would otherwise receive from the state. Parents would receive a fraction of this amount — depending on their family income. He explains, “Parents of voucher students would receive 40% to 80% of the $5,783 withheld from KCSD. The state would pocket the rest!”

Clark estimates that 443 of the 652 Kettering resident-students currently attending nonpublic schools in the district would be eligible for a PACT scholarship and warns that, because he has no data of how many KCSD resident-students attend nonpublic schools outside of the district, the financial lost could be higher. All of the resident-students would be eligible to apply for PACT scholarships, and each scholarship would subtract funds from Kettering Schools.

In addition, because of the prospect of receiving free tax money, a whole new set of students may decide to leave Kettering Schools and enroll in a private school. If all of the state money allocated to Kettering Schools would be diverted to PACT scholarships, Kettering Public Schools could lose 20% of its student population.

Mr. Clark concludes his memo: “It might be a good idea to contact your state representatives and let them know how you feel about this proposed law, before the full Ohio House of Representatives votes on it.”

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4 Responses to Kettering Treasurer Says Local Cost Of Voucher Plan, HB136, Is $2.5+ Million Yearly — 2+ Mills Of New Taxes

  1. Rick says:

    Don’t forget that loss of state contributions does not mean loss of tax money from local leves; it doesn’t. Let’s supppose that the kettering school get $20 million in state contributions and get $30 million from local levies. If all the students but one leave for vouchers, that leaves $30 million for one student. Thus, students leaving for vouchers means more per student. That is a win-win situation.

  2. Mike Bock says:

    Rick, you make a good point, if students leave a school district, then for those students who remain, the amount of money available per student might actually increase.

    But, the situation that the Kettering Treasurer anticipates is that state money that the district is receiving will be allocated to students who are already in private schools. The voucher system will mean a transfer of funds from public schools to private schools, regardless if there is no decrease in the number of students in the public schools. Mr. Clark is estimating that, in Kettering, there will be a transfer of $2.5 million from the public system to the private system, to pay for tuition of current private school students, and to maintain the current funding of the public system, local property taxes will need to be increased by 2+ mills in order to recoup this lost revenue.

  3. Rick says:

    Mike, the article itself states: “HB136, also known as the Parental Choice and Taxpayer Savings Scholarship program (PACT), allows all of the state tax money allocated to a public school district to be spent on “vouchers,” to finance tuition to private schools.”

    It is clear from the article that only state educational money will be “transferred” to private schools. It that amount is $2.5 million, so be it. That means more money for the students that remain in the Kettering City Schools. Thus, my comment stands because the local levy money would remain the same.

  4. Mike Bock says:

    Rick, this article tells correctly that, if HB136 is approved, there will be a transfer of tax money from public schools to private schools. The article focuses on the fact that Kettering resident-students who are already attending private schools will be eligible to receive vouchers, and, $5783 will be subtracted from the public schools for each voucher. As I write here the payment to students already in private schools will be phased in over several years, and not until the 2015-2016 school year, will all current private school students be eligible. But, according to the Treasurer’s estimate, by 2015-2016, Kettering public schools will lose $2.5 million each year to pay for vouchers to students who are not now enrolled in the public schools. This means there will be less money for those students in the public schools.

    You raise a good point, however, that in order to fairly analyze the question of how HB136 impacts per public funding in a district, it is necessary to look at the whole picture.

    According to HB136, students who are already enrolled in Kettering public schools will be eligible for vouchers starting next year, and, again, for every student who receives a voucher to attend a private school, Kettering public schools will lose $5783 per student. As it is, the district is spending about $12,000 per year per student. Each voucher student will take $5783, but will leave 12,000 – 5783 = $6327. You could argue that for each voucher student, causing a drop in the district’s enrollment, the district would gain $6327 to spend on remaining students.

    It’s hard to predict exactly how HB136 will impact the per pupil spending because it is unknown how many current students in Kettering public schools, if given the opportunity of receiving a voucher, will choose to attend private schools. It looks like an argument could be made that if 400 students ($2.5 million divided by $6327), or so, already enrolled receive vouchers to attend private schools, then this drop in enrollment would offset the $2.5 million needed for students already in private schools, and the amount of money per student for those students who remain would stay constant. School financing is so convoluted, however, I wouldn’t be surprised if there are other factors I’m not considering that might make this argument invalid

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