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Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights OACTS Presentation by BASA June 25, 2013
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Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Feb 25, 2016

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Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights. OACTS Presentation by BASA June 25, 2013. GRF Revenues – Actual $ Received Comparing 05/13 with YTD Estimates. $ in thousands. GRF Revenues – Actual $ Received Comparing YTD 05/13 with 05/12. $ in thousands. - PowerPoint PPT Presentation
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Page 1: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Substitute HB 59 (as passed by the Ohio Senate) Highlights

And The Lowlights

OACTSPresentation by BASA

June 25, 2013

Page 2: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

GRF Revenues – Actual $ Received Comparing 05/13 with YTD Estimates

CategoryActual FY13

per 05/31/2013Estimated FY13 per 05/31/2013 Difference

Non-Auto Sales $ 6,705,630 $ 6,706,700 $ (1,070)

Auto Sales & Use $1,007,424 $ 980,600 $ 26,824

Subtotal - Sales $ 7,713,054 $ 7,687,300 $ 25,754

Personal Income $ 8,630,559 $ 8,110,797 $ 519,763

Corporate Franchise $ 273,977 $ 145,000 $ 128,977

Commercial Activity Tax $ 786,949 $ 847,300 $ (60,351)

Public Utility, KWH, MCF Tax $ 442,451

$ 457,400

$ (14,949)

Foreign/Domestic Insurance $ 471,589 $ 412,700 $ 58,889

Other Business $ 34,463 $ 14,100 $ 20,363

Sin Taxes $ 856,476 $ 835,800 $ 20,676

Estate $ 100,527 $ 64,100 $ 36,427

Total Tax Receipts $19,310,046 $18,574,497 $ 735,549$ in thousands

Page 3: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

GRF Revenues – Actual $ Received Comparing YTD 05/13 with 05/12

CategoryActual FY13 per

05/31/13Actual FY12 per

05/31/13 Difference

Non-Auto Sales $ 6,705,630 $ 6,411,493 $ 294,137

Auto Sales & Use $1,007,424 $ 965,715 $ 41,710

Subtotal - Sales $ 7,713,054 $ 7,377,208 $ 335,847

Personal Income $ 8,630,559 $ 7,593,799 $1,036,760

Corporate Franchise $ 273,977 $122,360 $ 151,617

Commercial Activity Tax $ 786,949 $ 409,595 $ 377,354

Public Utility, KWH, MCF Tax $ 442,451 $ 445,329 $ (2,877)

Foreign/Domestic Insurance $ 471,589 $ 445,318 $ 26,270

Other Business $ 34,463 $ 11,381 $ 23,082

Sin Tax $ 856,476 $ 858,908 $ (2,433)

Estate $ 100,527 $ 63,701

$ 36,826

Total Tax Receipts $19,310,046 $17,327,598 $ 1,982,447

$ in thousands

Page 4: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Tax Reform in HB 59

• Increasing the state sales tax from 5.5 to 5.75%• Expanding sales tax to include electronically

delivered products and collection of the tax on items purchased through a catalog or over the Internet

• Indexing the Homestead Tax Exemption to income (rather than providing it for all senior citizens)

• Eliminating all state subsidies for local property taxes enacted, beginning with local issues effective in or after TY 2014 (but not renewals and substitute levies)

Page 5: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Tax Reform in HB 59 (continued)

• Indexing the $20 personal exemption credit on the state income tax

• Lowering the Commercial Activity Tax threshold from $1 million to $500,000

• Initiating a small business 50% tax cut on the first $250,000 in net business income

• Reducing the personal income tax rate by 8.5% in FY 2014, 9% in FY 2015, and 10% in FY 2016

Page 6: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Tax Reform in HB 59 (continued)

• Total cost of tax reforms estimated to be a little over $2.5 billion over next three fiscal years

• To be paid with:– Current excess revenue (after reserving maximum

in Budget Stabilization Fund)– Expansion of sales tax– Reduction in exemption from Commercial Activity

Tax

Page 7: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Overview of Funding Formula

• Increases per pupil from $5,732 to $5,745 in FY14 and to $5,900 in FY15

• $717MM increase in FY14 and FY15 from FY13• Caps: 6.25% in FY14 and 10.5% in FY15– 242 districts on caps by end of FY15

• Guarantee districts: 176 by end of FY15• $207MM for Third Grade Reading Guarantee• Transportation subsidy inside formula

Page 8: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

House LSC Updated vs. Senate Proposed FY14-15 Funding Comparison by 2013 Typology

Typology Group FY13 Base Total $ Change

FY14 Total $ Change

FY14 $/Pupil Change

FY15 Total $ Change

FY15 $/Pupil Change

1. Poor Rural Low ADM -$5,856,366 -$368,899 -$2 $11,043,403 $68

2. Rural Very Low ADM -$5,984,859 $24,049 $0 $5,683,588 $55

3. Small Town, Low ADM -$3,154,498 $195,994 $1 $8,642,627 $50

4. Small Town High Poverty $58,732 $407,690 $2 $24,080,652 $122

5. Suburban Districts $2,631,221 $1,119,906 $3 $22,327,344 $70

6. Wealthy Suburban, Larger $635,565 $1,036,894 $4 $14,903,641 $62

7. Urban Districts -$3,626,007 $2,793,175 $11 $53,152,640 $212

8. Major Urban $8,630,492 -$4,696,991 -$19 $15,553,247 $62

0. Islands, College Corner $1,264 $59 $0 $1,187 $7

Total -$6,781,919 $511,878 $0 $155,388,328 $92

Page 9: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Payment in Lieu of Transportation

• Parent can request subsidy regardless of whether student is impractical to transport.

• Amount of payment in lieu of transportation would be the state average cost of transportation (and not amount limited by appropriation).

• Retains current law for eligibility and reduces minimum payment from $233 to $225– Districts begin paying half in FY 15

Page 10: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

EdChoice Scholarships

• Beginning in 2016-2017 school year, qualifies students in kindergarten through third grade if enrolled (or will enroll) in a district-operated school that has received a grade of "D" or "F" in "making progress in improving K-3 literacy" in two of the three most recent state report cards and has not received an "A" in "making progress in improving K-3 literacy" in the most recent report card issued prior to the first day of July of the school year for which the scholarship is sought

Page 11: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

New EdChoice Scholarships

• Beginning with 2013-2014, expands the EdChoice scholarship program to qualify students with family incomes at or below 200% of the federal poverty guidelines, regardless of the academic rating of the school

• Scholarships for students from low-income families to be funded through an appropriation by General Assembly, rather than through deductions from resident school districts' state education aid

• Must use regular EdChoice if school is eligible

Page 12: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

New EdChoice Scholarships

• Limits number of low-income scholarships to amount appropriated for that purpose

• Phases in EdChoice expansion by qualifying only kindergartners for the scholarship in 2013-2014 school year, with the grade higher added in each subsequent year

• Prioritizes awarding of scholarships if applications exceed number of scholarships that can be funded by the appropriation, as follows:

Page 13: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

New EdChoice Scholarships

• First, to students who received scholarships in the previous year;

• Second, students with family incomes at or below 100% of federal poverty guidelines;

• Third, students with family incomes between 100% and 200% of federal poverty guidelines

Page 14: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

New EdChoice Scholarships

• If student's family income is above 200% but at or below 300% of the federal poverty guidelines (FPG), student may receive scholarship in the amount of 75% of the full scholarship amount

• If student's family income is above 300% but at or below 400% FPG, student may receive a scholarship in the amount of 50% of the full scholarship amount

• If student's family income is above 400% FPG, student is no longer eligible to receive an EdChoice scholarship.

Page 15: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

All EdChoice Scholarships

• Requires each chartered nonpublic school to administer the state achievement assessments to all of its students if at least 35% of its total enrollment is made up of students who are participating in the EdChoice Scholarship Program, Autism Scholarship Program, Jon Peterson Special Needs Scholarship Program, or the Cleveland Scholarship Program.

Page 16: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Special Needs Scholarships

• For fall 2013 application period for the Special Needs Scholarship Program, ODE may not accept applications from students who have not received scholarship from the program in previous or current school year

• In FY 2014 Ohio to reimburse districts for Special Needs Scholarship deductions for students that did not attend a public school in their resident district in the previous year

Page 17: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Preschool Special Education Funding

• Currently, preschool education for students with disabilities funded on a unit (per class) basis based on previous teacher salary schedule without local share.– New formula is: ($4,000 X number of preschool students

with disabilities) plus (number of students in each category X weighted amount for that category X state share index X 0.5)

• Currently, there is no state share index multiplier, but approximately one-third of all units currently in operation have no state funding. (Serving these students is required by federal law.)

Page 18: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

All Day Kindergarten Tuition

• Only school districts that may charge fees or tuition for all-day kindergarten are those districts offering all-day kindergarten for the first time or that charged fees or tuition for all-day kindergarten in the 2012-2013 school year

• Requires ODE to adjust a district's ADM certification by one-half of full-time equivalency for each student charged fees or tuition for all-day kindergarten.

Page 19: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Special Education Exceptional Cost Fund

• Ohio House made positive change when it removed 15% transfer of additional school district special education dollars to the Special Education Exceptional Cost Fund – Budget had estimated needed amount to be

$111.6 million in FY 2014 and $119.5 million in FY 2015

– Appropriation in Sub. HB 59 is $40 million and state payments limited to appropriation

Page 20: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Certification of Average Daily Membership (ADM)

• Counts kindergarten students as true full-time equivalent (FTE) student in ADM instead of counting each kindergarten student as 1.0 FTE, regardless of time spent in school

• Requires two counts of students, one during the first full week of October and the other during the first full week of February

• Specifies that annualized periodic payments for each school district must be based on the district's final student counts, calculated as follows: 0.5 x October count + [0.5 x (0.5 x October count + 0.5 x February count)]

Page 21: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Educational Service Center Funding

• Requirement for deductions from local districts to educational service centers for $6.50 per pupil is reinstated

• If majority of a service center's districts approve higher amount, ODE must deduct the approved excess from all of the service center's client school districts

Page 22: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Extra-curricular Participation• Permits students enrolled in chartered or non-chartered nonpublic

schools and students receiving home instruction to participate in extracurricular activity at school of student's resident school district to which the student would otherwise be assigned

• Permits the superintendent of a school district to allow any student enrolled in a nonpublic school and not entitled to attend school in that district to participate in school's extracurricular activities if:– (1) nonpublic school in which student is enrolled does not offer the

extracurricular activity, and – (2) extracurricular activity is not interscholastic athletics or

interscholastic contests or competition in music, drama, or forensics

Page 23: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Extra-curricular Participation

• Authorizes, but does not require, the superintendent of a school district to allow student receiving home instruction who is not entitled to attend school in that district to participate in a school's extracurricular activities, if the activity is not offered by the student's resident district

Page 24: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Extra-curricular Participation

• Board of education may require students enrolled in chartered or non-chartered nonpublic schools & homeschooled students participating in an extracurricular activity in that district to enroll and participate in not more than one academic course (if there is room) at the school offering the extracurricular activity as a condition to participating in the activity

• Prohibits school district, conference, or association from imposing additional eligibility requirements that conflict with these new ones

Page 25: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Accountability for Subgroups

• School districts required to account for the expenditure of state education funds provided for services to subgroups of students

• Districts would be required to submit an improvement plan if ODE determines that a district or school has not reached satisfactory achievement and progress for a subgroup

• ODE would then be permitted to require that the plan includes partnering with another entity for services to that subgroup, apparently at the district’s cost

Page 26: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Teacher Evaluation Changes

• Prescribes that the student academic growth factor must account for 35% (rather than 50% as under current law) of each evaluation under the standards-based state framework – Permits a school district to attribute an additional

percentage to the student academic growth factor, not to exceed 15% of each evaluation

Page 27: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Teacher Evaluation Changes

• Specifies that, when calculating student academic growth for a teacher evaluation, students who have had 30 or more excused or unexcused absences for the school year must be excluded– rather than excluding students with 60 or more

unexcused absences as under current law

Page 28: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Guarantee and Caps

• Guarantee will be final FY 2013 foundation funding (including transportation and career-tech money)– Using May 2013 levels now but could change– FY 2013 guarantee based on FY 2011 PASS Report

which used TY 2009 property values (which in turn could have been influenced by 2007 update)

Page 29: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Career Tech Category “Weights”

FY 2014 FY 20151 $4,366 $4,4082 $3,907 $3,9443 $2,470 $2,4944 $1,781 $1,7985 $1,379 $1,392Associated services funding at $225 in FY 2014 and $227 in FY 2015All amounts subject to state share

Page 30: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Career-Tech Opportunity Grant

• (Formula amount X Formula ADM) – (0.0005 X three year average property valuation– Formula amount is $5,745 in FY 2014 and $5,800

in Fiscal Year 2015– If calculation results in negative number, then the

formula amount is 0• Spending requirement of 75% on costs directly

associated with career-tech programs and not more than 25% on personnel expenditures

Page 31: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Career-Tech Extended Programs

• Must involve direct contact with students or are directly related to student programs

• Instructional staff employed on hourly basis rather than for additional days– Rate = regular per diem rate or as negotiated– Not more than 8 hours in any day

Page 32: Substitute HB 59 (as passed by the Ohio Senate) Highlights And The Lowlights

Upcoming Events on Budget

• OASBO/BASA/OSBA Regional Meetings in July7/10 – Athens 7/11 in Columbus7/12 – Clayton 7/15 in Findlay7/17 – Wooster 7/18 in Brecksville– OASBO is handling registration

• Budget Analysis and Discussion (B.A.D.) Seminar in Columbus on Monday, August 12 at the Hyatt Regency (Columbus)– OSBA is handling registration