Bexley City Schools
How Ohio Public Schools Are Funded
Ohio public schools receive funding from three primary sources: state funding, federal funding, and local funding through taxes – primarily property taxes. Some districts, like Bexley, also have a school district income tax. The state provides a foundation amount per student, supplemented by local property taxes and federal funds. As calculated by the state funding formula, local property taxes often represent the largest portion of school funding, especially in districts with higher property values per pupil.
The Role of Levies
Levies are a fundamental mechanism in Ohio’s school-funding model. A levy is a local property tax specifically approved by voters to fund schools beyond what is provided by state and federal funds. There are different types of levies, including operating levies for day-to-day expenses, bond levies for long-term capital improvements, or permanent improvement levies for ongoing maintenance. Ohio school districts often rely on regular levy approvals to maintain operations and accommodate growth or inflationary costs.
What Does a School District Funding Cycle Look like?
When a levy is passed, it does not take effect immediately. Depending on the timing of the levy's approval and the tax collection cycle, there may be a delay before the first revenues from the new levy begin to flow into the district. This means that school districts must budget carefully to manage the flow of cash. They must ensure there is enough money on hand to cover operational expenses throughout the year, not just when tax revenues are received.
Once collections start, they often come in as a lump sum twice a year, temporarily boosting the district’s cash balance. The initial boost in cash balance is not an indication of excess funding; rather, it’s part of a calculated influx intended to fund the district for the duration of the levy period. Districts plan their budgets around this cycle, allocating funds to cover expected increases in operating costs over upcoming years until the next levy cycle. This includes covering regular expenses such as salaries, benefits, utilities, maintenance, and other operational needs.
Levy revenue is fixed and does not increase with inflation or property value increases, due to Ohio’s House Bill 920. Consequently, cash from a levy must often stretch further each year. As costs rise due to inflation, the purchasing power of the originally collected amount can decrease, which can strain the latter years and eventually lead a district back to the ballot to make another levy request or make significant cuts.
Funding Sources
Ohio House Bill 920 Protects Taxpayers
Ohio law prevents school districts from automatically collecting more tax revenue when property values rise. House Bill 920, which passed in 1976, freezes tax revenues at the amount approved by voters at the time of the levy vote, meaning schools do not receive additional funds due to inflation or property appreciation. This means school districts must seek additional levies at regular intervals to keep up with rising costs.