Do Ohio’s school choice scholarships defund public school districts? 

Most families in Ohio choose their public schools for their child’s education.  With that in mind, would it make sense to reduce funding for the largest educational option in our state?   Those in opposition to school choice would have people believe that educational funding is taking money from public education to fund scholarships for the richest citizens in our state.  Could that be true? 

HB110, Ohio’s biennial budget passed in 2021, established new funding formulas for education in Ohio.  Historically there were cases where students assigned to their resident school district would choose to use a scholarship to attend a private school and the district would see a loss in funding.  While this was not a widespread problem, state legislators worked to transform funding for education in Ohio and to protect funding for Ohio’s largest educational option:  public school districts.

Ohio’s Fair School Funding Plan (HB 1) aims to accurately account for the cost of educating a child and how much a local community can afford to pay for that. The plan includes new funding categories, such as special education, gifted education, English as a second language (ESL), and transportation. It also provides additional money to schools and districts that do not have capacity and wealth to raise revenues locally.

The plan also increases funding for schools in economically disadvantaged areas, and provides supplemental money based on student need and demographics. This includes funding for students with disabilities, English learners, gifted students, economically disadvantaged students, and those participating in career-technical education.

In addition to reforming educational funding, HB110 established separate funding for all school options in Ohio.  Each program is funded through separate line items in the state budget.  This is true for public and charter (community) schools as well as school choice scholarship programs.

In July 2023, Ohio passed HB33 into legislation which continued the implementation of the Fair Funding Formulas which included a baseline for public school districts so that funding for public school districts, regardless of student enrollment, would never fall below historical benchmarks.

Included in HB33 was the extension of school choice to all students in Ohio, creating universal school choice for K-12 students, regardless of their (assigned) resident school district.  However, this does not mean that a scholarship amount is awarded without regard to family income.  Each scholarship award is determined by the family’s household income.  Families whose income is at or below 450% of the Federal Poverty Level (FPL) would receive the full scholarship award:  $6166 for students in grade K-8; $8408 for students in grades 9-12.

Has the passage of Universal School Choice adversely affected funding for public school districts?

On the average, public school funding is broken down as follows:

• Local Revenue – 44%
• State Revenue – 36%
• Federal Revenue – 15%
• Other Revenue – 5%

It is important to note that local revenue, through sources like levies and property taxes, is not affected by student enrollment.  School districts continue to receive that funding…even if student enrollment decreases.

Funding for public education, both revenue (income) and per-student spending has gone up consistently in Ohio.  Please refer to the chart below to view Ohio’s public education revenues and per-student spending since 2017. 

For more information or a detailed breakdown of funding and expenditures for each school district in the Ohio Department of Education & Workforce District Profile Reports at https://education.ohio.gov/Topics/Finance-and-Funding/School-Payment-Reports/District-Profile-Reports

How do Ohio’s scholarship programs work?

The premise of school choice is to allow families to find the educational option that works best for each individual student and, more importantly, make sure that all families can access that option.  Every child is unique and it would stand to reason that for some students, an alternate educational path might be critical in order for that student to succeed and thrive.  The argument for school choice is not about good vs. bad. It is about what is best for each individual student.

Ohio’s scholarship programs are funded through a separate line item in the state’s budget.  Students using a scholarship to attend a participating private school does not reduce funding for the public school district.

In order to qualify for a scholarship, families must submit an application for each student they wish to enroll at a participating private school.  The application, along with supporting documentation must be submitted to the Ohio Department of Education & Workforce for processing.  Families must complete the additional step of Income Verification to determine the student’s scholarship award level.

The maximum scholarship amount is $6166 for students in grades K-8 and $8408 for students in grades 9-12.  Students whose family’s household income is at 450% or below qualify for the maximum award.  Students whose family’s household income is 451% FPL or higher are awarded the scholarship on a sliding scale.  The minimum scholarship award is $616 for grades K-8 and $840 for grades 9-12.  School fees are not covered by scholarships.

For students whose family’s household income is at or below 200% of the Federal Poverty Level (FPL), participating private schools must waive the difference between the school’s tuition rate and the amount of the scholarship awarded to the family on the behalf of each student. 

Students whose family’s household income is above 200% of the Federal Poverty Level (FPL), the family is responsible to pay the difference between the school’s tuition and the amount of the scholarship awarded to the family on behalf of each student.  Ohio requires that providers make volunteer hours an option to help families cover the cost of the difference between tuition and scholarship amounts whenever available. 

In most cases, the scholarship amount does not cover the full cost of tuition at the participating private school.  For families choosing to utilize the scholarship program for their students, it requires an investment in order to do so.  Private schools who accept students through the scholarship program must rely on additional funding from donors and other sources to keep pace with the spending per student that public schools are afforded. 

Do you have questions about Ohio’s educational options?  We’re here to help!  Visit www.scohio.org for more information.