In the wake of the Mansfield City Schools’ fiscal emergency, many questions about school funding have surfaced. While school funding and budgets is a complex issue, this is an exploration of the income and expenditures of the district to clarify the district’s finances.
In the United States, education is a state responsibility in terms of governance and funding. Roughly three percent of the federal budget is allocated for education. In the case of Mansfield City Schools, about 1.72 percent of the district’s income is from federal grants. The remainder comes from state grants, property taxes, loans and other sources.
Although the current funding structure for Ohio schools was ruled unconstitutional in 1997, the legislature has yet to craft or implement an alternative system that is constitutional and the matter remains unresolved in the courts. As it stands, school funding is governed by Article Six of the Ohio Constitution, but the interpretation of that article is in flux.
An additional wrinkle that has proven challenging for the district involves additional bureaucratic red tape in the form of policy and procedural shifts. The state has changed the reporting methodology for accounting five times in the last three years.
The largest source of income for the district is state grants. Between 2011-2013 the average amount of income from state grants was $41,102,585, which was 61.94 percent of the total income to the district, however, $12,117,468 was transferred out of the district. This leaves the district with 70.52 percent of their state funding to be utilized in district.
The second largest revenue stream is property taxes.
The three year average for property tax receipts was $18,948,579, which is 28.55 percent of the district’s income. The average annual revenue lost as a result of delinquent taxes is $5,971,508, which is a loss of nearly 24 percent. The additional loss of the renewal levy in 2011 further weakened this particular revenue stream.
Preschool tuition, casino revenue, donations, and open enrollment comprise the $2,588,813 categorized as “Other.” This figures accounts for 3.9 percent of the annual district income.
Revenues from loans amount to $2,581,385, which is 3.89 percent of the district income. These funds include the advance from the state solvency fund as well as borrowing against the levy and closure of a bond issue.
The last 1.72 percent of the district’s income comes via $1,141,351 in federal grants.
These percentages can vary drastically from district to district for a variety of reasons. In communities with higher property values, there is significantly more revenue from property taxes. The number of vacant properties and resulting delinquent taxes varies greatly as well. State and federal programs take many factors into account, which makes those allocations different from district to district.
Per pupil expenditures in the State of Ohio range from $4,616.00 to $28,927. In 2011, Mansfield City Schools spent $14,718.00 per pupil.
So how is that money being spent?
Typically, the largest line item on a district budget is salaries, and that is the case in Mansfield as well. Personnel comprise 39.47 percent of the district’s spending. The second highest expenditure is what’s called purchased services. This includes utilities, copier contracts, telephone and internet charges and other service related items.
The third largest expenditure are transfers. These are state funds allocated to the district that are transferred to other entities. Transfers account for 18.22 percent of the district’s expenditures.
Currently, 65.57 percent of the transferred funds go to community schools, also known as charter schools. Ed Choice Scholarships account for 15.89 percent, followed by 12.44 percent for open enrollment. The Educational Service Center receives 3.5 percent of transferred funds. The remaining 2.6 percent is categorized as “Other.”
Although reflected within various line items, the cost of busing students who do not attend Mansfield City Schools averages $484,636.00 per year.
Insurance, which includes healthcare, liability, workers compensation, and property insurance, comprises 17.88 percent of the district’s expenses. Supplies, equipment, loan payments, and “Other,” round out the remaining 2.47 percent of the budget.
It is unclear how these percentages will shift in the next year. Until the district and union finalize the reduction in force process that has been approved by both commission and the school board, projections for next fiscal year cannot be surmised.
