Let’s get the facts straight on public school funding
By Scott DiMauro, Ohio Education Association President
As a high school social studies teacher, I was always struck by what the then-future US President John Adams said during the criminal trial following the Boston Massacre: “Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”
The fact is that Ohio’s public schools serve nearly 90 percent of students in our state. And, despite recent claims that attempt to twist the truth around public school funding in Ohio, the evidence is clear: More work must be done to finally fully and fairly fund our public schools, so that every child – regardless of where they live, what they look like, or how much money their parents make – can receive the excellent education they deserve.
The fact is that Ohio’s public schools are funded from the same line item in the state budget as private school vouchers. The last state budget did provide “record funding” for that line item, as indeed, anytime there’s an increase, that would set a new record. As noted in recent news coverage, the Ohio Department of Education and Workforce doesn’t yet know how much the state’s new universal voucher program will cost this year. But, with the explosion in the number of wealthier families taking public taxpayer dollars to pay for private school tuition for students who were already attending private schools in the first place, it is clear the state’s spending on the universal voucher program will far exceed the original budget estimates.
So, the fact is, when it comes time to pass the next state budget in 2025, that leaves less money in that line item for Ohio’s public schools. Exactly how much less and how will that impact public schools? It’s unclear. But, the uncertainty around those questions is causing school districts across the state to hold onto larger reserves to weather future state funding shortfalls, and in some cases, has prevented districts from feeling comfortable spending down the soon-to-expire federal pandemic-relief money that is currently inflating some of the figures. In the end, that uncertainty is hurting our students, as money that should be used to recruit and retain public school educators, address students’ mental health needs, and make up for lost ground remains unspent.
The Fair School Funding Plan, when fully implemented with updated formula components, should remove that uncertainty. Based on years of work and input from stakeholders across the board, the Fair School Funding Plan, which the state began phasing in in the FY 2022-23 budget, is meant to accurately account for how much it costs to educate a child and how much a local community can actually afford to pay toward that. And, it provides a predictable funding model, so school districts can accurately plan ahead. If the Fair School Funding Plan is fully phased in in the next state budget, as it was always intended to be, Ohio would finally have a constitutional school funding formula for the first time since the state supreme court started telling the legislature to stop chronically underfunding our public schools and truly fix the problems back in 1997.
Our lawmakers need to fulfill Ohio’s promise to our kids and commit to fully adopting the Fair School Funding Plan. They need to ensure that public tax dollars spent on private school vouchers come with the same academic and financial accountability as the dollars we spend on our public schools. They need to focus on providing the supports and resources our students need to succeed in a 21st century economy, because in Ohio, public education matters.
February 2024 OEA Retirement Systems Update
STRS Board Maintains Current Economic Assumptions
During its February meeting, the STRS Board elected to maintain the current economic assumptions for the upcoming actuarial valuation. The Board’s actuarial advisor, Cheiron,
recommended maintaining the assumptions of a 7.0% discount rate, 2.5% for inflation, and 3.0% for payroll growth.
The discount rate is similar to an expected rate of return. This is a key assumption because it helps to project the cost of future liabilities and the rate at which they can be paid off. There was discussion among the Board of increasing the discount rate to 7.25%. This change would have reduced the unfunded liabilities of the system by approximately $2.5 billion. However, the actuarial consultant reported that the majority of public pension plans have a 7.0% assumption, that the trend is lowering investment assumptions, and that only one plan in the last 10 years had raised their assumption. Further, the Board’s investment consultant has a 10-year projected rate of return of 7.04% and other investment projections are trending down amid economic uncertainty.
These economic assumptions will be used, not only for the actuarial valuation at the end of the fiscal year, but also in a March Board discussion about possible benefit changes. State law allows the Board to make certain plan changes if the Board’s actuary determines such changes do not “materially impair the fiscal integrity” of the system. Last year, Cheiron developed a method of providing the Board with a benefit enhancement budget. At that time the budget was $0. However, in that instance, the actuary determined that a de minimus change could be made. This resulted in the Board electing a 1% cost-of living adjustment (COLA) and a five-year period of retirement eligibility with 34 years of service.
STRS Seats New Board Member Amid Continued Legal Battle
Governor Mike DeWine has named Brian Perera to the STRS Board replacing G. Brent Bishop who resigned earlier this month. Mr. Perera is a consultant, former lobbyist for Ohio State University, and former Finance Director for the Ohio Senate. Mr. Bishop was initially appointed to the seat after Governor DeWine removed Wade Steen, his prior appointee, from the Board. Mr. Steen’s removal is the subject of an ongoing lawsuit about the Governor’s authority to remove his appointed Board members.
Recently, 10th District Court of Appeals Magistrate Thomas Scholl stated that the Governor lacked legal authority to remove Steen. However, that decision is not final or binding. It now goes to a three-judge panel to adopt or reject it. That panel’s decision could also be appealed to the Ohio Supreme Court. The Attorney General advised STRS to seat Mr. Perera on the Board and he participated as a voting member in the February meeting.
The STRS Board also announced that Executive Director Bill Neville will remain on leave until at least May. Neville was placed on leave in November in response to an anonymous letter alleging harassment and threats. Attorney General Dave Yost hired outside attorneys to investigate the matter. A statement by STRS said the Board reviewed the investigation’s summary before voting to keep Neville on leave. Lynn Hoover, Chief Financial Officer, will continue as acting Executive Director
SERS Board Discusses Definition of Compensation
The SERS Board is discussing potential changes to the pension contribution compensation definition. The current definition was originally adopted in the 1980s and has been largely
unchanged. However, compensation practices used by employers have changed with more bonuses and lump sum payments being used—not just standard salaries and wages. Some of
these payments are subject to pension contributions, others are not, and it can be unclear which is the case.
This matters because what types of pay meet the definition of compensation for SERS determines how much funding goes towards members’ pension benefits and ultimately determines how much they receive in retirement. The Board’s expressed goals for the discussion are to identify which payments should be pensionable, clarify the rules so they are easier to understand and administer, and to understand how decisions might impact the pension plan, employers, and members of SERS.
On Thursday, February 15, the SERS held a special meeting to discuss the issue with stakeholder groups. OEA, other labor unions, and employer groups were represented. There was consensus among the labor groups that the current definitions are murky and that as bonuses and lump sum payments become more prevalent, it would have real and lasting impact on members in retirement if left unchanged. OEA Secretary-Treasurer Mark Hill made the point that the purpose of a pension is to replace a portion of your earnings you had while employed. If the pension benefits do not reflect your true income during employment, it undermines members’ economic security.
The Board discussions on this matter are ongoing. Depending on what changes are approved by the Board, they might require changes in administrative rules or legislation to be passed.
OPERS Posts Positive Investment Returns for FY 2023
Preliminary investment reports for 2023 found that OPERS had double-digit investment returns which exceeded their assumed rate of return. OPERS reported a preliminary return of 11.34% for the defined benefit pension plan. This return is above the assumed rate of 6.90% and beat the benchmark return by 0.87%. The OPERS health care fund is invested with a different asset allocation and has a lower assumed rate of return (6.0%). The health care fund posted a preliminary return of 13.96% for the year, beating the benchmark by 0.32%. All returns are reported net of fees
Click here to download a copy of this February 2024 Report to the OEA Board of Directors. Previous Retirement Systems Updates can be viewed under the Affiliate Resources tab on the OEA website.
OEA, EGCCEA call for transparency, path forward for Eastern Gateway students, staff
“Eastern Gateway Community College has been an invaluable resource for our community, our students, and their families for nearly 60 years. Despite the challenges stemming from mismanagement and the changing landscape of this institution over the last several years, the 138 members of the Eastern Gateway Community College Education Association have remained steadfast in their commitment to providing all students – on campus and online – with the best education possible to prepare them for their future lives and careers,” said EGCCEA President Jim Corrin. “We want nothing more than to continue providing excellent education in this community, but we need answers from the Board about whether our positions will continue to exist after the spring semester, how long this “pause” in enrollment may last, and whether there will eventually be a college to return to here.”
“The Board’s vote to suspend EGCC operations and initiate another round of staff layoffs is truly a devastating blow to the college’s students and the faculty and staff who have dedicated their lives and careers to serving them. State leaders must rise to the challenge of this moment and provide meaningful support for the 40 EGCC staff who will need immediate job placement assistance, as well as for potentially countless others who have been left in limbo by the Board’s lack of transparency on its decisions and timelines,” OEA President Scott DiMauro added. “The Board’s vote on Wednesday started a countdown clock to the end of the spring semester. EGCC students and staff can’t afford to have leaders wait around or build layers of red tape and bureaucracy. They need a plan and a path forward today.”
Ask Your State Senator to Support HCR 6: Urging Congress to Repeal GPO and WEP
Federal legislation is needed to repeal the unfair Social Security offsets that reduce the earned benefits of public employees in states like Ohio. The Government Pension Offset (GPO) and Windfall Elimination Provision (WEP) are provisions of federal law that reduce the earned Social Security, spousal, and survivor benefits of those who also collect a public pension from states that do not pay into Social Security. Because Ohio is a non-Social Security state, many teachers, education support professionals and other public servants are adversely impacted by GPO and WEP.
The Social Security Fairness Act (HR 82 and S. 597) is pending before Congress and would repeal GPO and WEP, helping right this decades-long injustice. One way to help keep the pressure on Congress to act is for our state legislators to urge them to do so. House Concurrent Resolution (HCR) 6 is a resolution that urges Congress to repeal GPO and WEP. The resolution has already passed the Ohio House by a unanimous vote and is now pending in the Ohio Senate.
Write to your State Senator today and urge them to support this resolution. By doing so they will be standing up for Ohio’s public servants and help to improve their economic security in retirement.
Student Loan Forgiveness
If you are looking for information on eligibility for debt forgiveness, we recommend you visit : Student Debt Cancellation, PSLF & More: What Educators Need to Know | NEA. Also visit the NEA Student Debt Navigator, a powerful toll that can help manage student loan debt, find forgiveness options and the lowest payment options at no cost! To be best prepared, be sure you have created an account at NEA Member Benefits. Start here: www.neamb.com/start
Need help understanding what’s going on with student loans and loan forgiveness?
NEA Member Benefits will share the latest about student loans and loan forgiveness as we enter a time of great uncertainty.
No pre-registration is required. Simply join the session(s) most convenient for you:
- December 16 at 4:00 p.m. ET
- December 17 at at 6:00 p.m. ET
- December 18 at 7:00 pm ET
If prompted: MEETING ID is 823 2915 5910 and the PASSCODE is 815183
NEA Member Benefits will help make sense of loan repayment & forgiveness, the current administrative forbearance and options borrowers have, rule changes, what the future of loan forgiveness looks like under a new administration and learn about the NEA Student Debt Navigator and how it can help NEA members manage their student loans and forgiveness options at no cost.
February-March 2024 Ohio Schools
- Make 2024 a year of growth and strength (page 4)
- Springfield Local Schools staff join to advance awareness of diversity, equity, inclusion (page 5)
- Comic: A look at Teachers as the film marks its 40th anniversary (page 8)
- OEA, OAESP leaders continue commitment to ESP visibility, rights, and respect with launch of ESP web page (page 14)
- Meeting the needs of Ohio’s English Learners
- OEA members are advocating for the resources and supports their students need to succeed in the classroom and beyond (page 17)
- Support system
- OEA and its members are committed to advocacy that ensures mental health and wellness support for Ohio students and educators. (page 23)
- 2023 OEA Fall Representative Assembly delegates stand together to protect, promote, and strengthen public education (page 30)
Moved recently? Contact the OEA Member Hotline to update the address on file at 1-844-OEA-Info (1-844-632-4636) or email, membership@ohea.org. Representatives are available Monday-Friday, from 8:30 a.m. to 6 p.m. | OhioSchools — Past Issues
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