“There’s nobody that’s going to become an expert on school funding by doing a Google search, I can guarantee you that,” said Ohio Rep. Don Jones, R-Freeport. “The school funding formula is sophisticated, it’s hard to understand even for those that are in the business … It is difficult to understand if you don’t understand the parameters that are used and the formulas.”

Jones, representing the 95th state district in southeast Ohio, joined the legislature after retiring from public schools in Harrison County.

Now, he sits on the special committee tasked with addressing an 18-year delayed response of the state to determine a constitutional way to fund operational budgets of school systems.

In 2002, the Ohio Supreme Court determined that the existing operational funding mechanism of Ohio public schools, which relies on the property values of the parcels within a given school district to determine both applicable state and local revenues, is unconstitutional.

It automatically provides more affluent areas with greater funding for the basics — supplies, curriculum and personnel — and leaves less populated districts or ones with land that does not provide tax revenue with a disadvantage (Frontier Local Schools only saw an income of $40,000 from the federal government as a payment in lieu of taxes for undevelopable land within the Wayne National Forest in the past year).

According to The Fordham Institute, Ohio schools receive approximately $14,000 per student, with 43 percent of that funding provided by the state, 42 percent provided through local revenue streams, 7 percent provided by federal funds and 8 percent defined broadly as “other non-tax.”

That’s not reflective locally.

This month, Fort Frye Local Schools’ leadership learned of a drop in one major valuation in Waterford Township, which according to District Superintendent Stephanie Starcher, shows the vulnerability of schools under the present funding mechanisms fueling operations of public schools.

“When it’s good, it’s good,” she explained Tuesday. “If that district is doing great or their taxes are high, we are in good shape. But if (a large tax contributor) is not doing well or their taxes aren’t high, we struggle. Even with this drastic cut, we are phenomenally dependent on this one plant … They’re 50 percent of our operating budget each year. So we are so dependent on them and that’s the danger, we are vulnerable.”

The natural gas-fired/steam-fired energy plant in Beverly (Luminant), has taken advantage this year of environmental tax credits that it has qualified for since 2015, dropping the tax bill for 2020 (to be paid in 2021) by approximately $1.559 million.

But the district’s residents and property owners, by state formulas, are already responsible for supplying 54.2 percent of its schools’ funding locally, instead of the 42 percent the state reports.

Pre-coronavirus, the state provided for Fort Frye Local Schools only 29.7 percent of its funding.

Now, with the projected loss of $1.6 million (including other valuations which also lowered) locally-sourced revenue annually, the school district is facing personnel cuts in order to keep its track record of balancing its budget.

But neither the district nor Jones assign blame to the company for utilizing the tax exemption legally available to it.

“There is a methodology behind these pieces,” explained Washington County Auditor Matthew Livengood on Friday.

But it’s not just one formula in a singular office at the Ohio Department of Education, the Ohio Department of Taxation, or the county auditor’s office that determines what funds ultimately arrive within school district coffers.

Formulas at the state level determine the value of residential property, agricultural property, tangible business property and public utility property.

Then those calculations are sent to county auditors to apply the local tax rates (including school levies, senior service levies, library levies, county home levies, fire and EMS services, etc.) annually.

In the case of public utility property tax, a preliminary assessment of all of the electricity lines, substations, power-generation plants, operating railroads and pipelines is determined through a state formula to arrive at the taxable property value.

Then, Livengood, and the other 87 county auditors respectively, provide each district with a “values and income estimate” in December.

What happened this month?

Livengood’s office flagged the drop a valuation early, to aid in the planning process for Fort Frye Local Schools preceding their state-required forecasting exercise next month.

“The five-year forecast serves as a tool to assess the financial health of a school district,” reads the Ohio Department of Education website, summarized from Ohio Revised Code 5705.391 and Ohio Administrative Code 3301-92-04. “City, local, exempted village and joint vocational school districts are required to submit five-year forecasts twice annually to the Ohio Department of Education.”

According to ODE, the semi-annual exercise offers the following three opportunities:

1. To engage the local board of education and the community in long-range planning and discussions of financial issues facing the school district.

2. To serve as a basis for determining the school district’s ability to sign the certificate required by O.R.C. 5705.412, commonly known as the “412 certificate.”

3. To provide a method for ODE and the Ohio Auditor of State to identify school districts with potential financial problems.

Now, in preparation for that exercise at Fort Frye’s next district business meeting, officials await answers from the state on how much of the tab ODE can pick up in the short term with such a significant drop in revenue.

Janelle Patterson may be reached at jpatterson@mariettatimes.com.