Ohio State Budget: How School Funding Proposals Impact Urban vs. Suburban Districts

As Ohio legislators race to finalize the state budget before the June 30 deadline, one issue has taken center stage for educators and families across the state: the fairness and equity of school funding allocations.

An analysis of current funding proposals from Governor Mike DeWine, the Ohio House, and the Ohio Senate reveals a concerning trend: urban school districts with high poverty levels and large enrollments stand to receive less support compared to their suburban counterparts, especially under the Senate’s plan.

Unequal Gains: Urban Schools Left Behind

Urban districts like Cleveland Metropolitan School District (CMSD) face a net loss or minimal gain under the proposed budgets. CMSD, which currently receives $307 million in state aid, would lose $225,000 under the Ohio Senate’s plan. Even though the House plan offers CMSD an additional $625,000 and the governor’s proposal includes a more generous $8 million increase, these amounts remain insufficient when considering the challenges urban schools face.

Suburban districts, by contrast, such as Shaker Heights City Schools, are poised to gain significantly more, despite having lower poverty rates and higher local tax bases. Shaker Heights is on track to receive an additional $557,000 under the Senate plan, $86,000 more from the House, and $628,705 under DeWine’s budget.

This disparity has prompted critics, including Ohio Education Association President Scott DiMauro, to raise alarms about the state’s approach. “You have different public schools that are being, essentially, pitted against one another,” said DiMauro. “Rather than taking some money from an already underfunded system and reallocating it to districts that are already doing well… why don’t we instead fully fund the formula and direct resources where they’re needed the most?”

The Performance Incentive Dilemma

The Senate’s budget includes a new provision to reward “high-performing” or “improving” school districts, those with four- or five-star ratings on state report cards. Finance Chair Jerry Cirino (R-Kirtland) argues that this reward system encourages academic excellence.

“This was a necessary addition to the funding formula as we expect more and more out of our school districts,” Cirino stated.

However, the structure of this incentive inherently favors wealthier, suburban districts. Of the 68 schools rated five stars by the Ohio Department of Education and Workforce, 56 are suburban, 11 are rural, and only one—Steubenville City Schools—has a mixed urban-suburban classification.

Urban districts like Cleveland, Columbus, and Cincinnati typically fall below the four-star threshold. Cleveland holds a three-star rating, while Columbus and Cincinnati come in even lower, at two and 2.5 stars respectively. Critics argue that tying funding to performance punishes districts already grappling with chronic underfunding, concentrated poverty, and systemic challenges beyond the classroom.

The Fair School Funding Plan

The Fair School Funding Plan (FSFP), passed with bipartisan support in 2021, was designed to inject an additional $2 billion into K-12 education over six years, addressing historic inequities in how schools are funded. Both the Governor and the Senate claim to follow this formula in their budgets, yet neither appears to significantly increase overall investment in the plan.

By contrast, the House version of the budget deviates from the FSFP, opting instead to guarantee that every district receives at least more than it did last year, regardless of changes in enrollment or need.

The proposed Senate plan adds approximately $100 million more than the House version in public school funding—but restricts that increase to “high-performing” districts, widening the funding gap between well-resourced and under-resourced communities.

Wealth and Performance

A close look at a district like Orange City Schools, located in affluent suburbs like Pepper Pike and Moreland Hills, illustrates the inequity. These areas boast median household incomes exceeding $200,000 and recently passed a school levy, showing strong local financial support. The district also enjoys a five-star rating, qualifying it for additional funds under the Senate plan.

In contrast, urban districts rely far more heavily on state aid due to limited local tax revenue. The proposed cuts or modest increases leave them struggling to fund basic services, let alone invest in enrichment or innovation.

To make matters more complex, both the House and Senate are considering penalizing districts that maintain “excessive” carryover balances—30% and 50% of their annual operating budgets, respectively—by issuing tax rebates. While legislators view this as discouraging hoarding, school officials argue that maintaining reserves is essential for fiscal stability, especially amid unpredictable funding cycles and rising costs.

Conclusion

The proposed budget has exposed a fundamental conflict in Ohio’s education policy: Should funding reward performance, or should it address need?

While supporting academic excellence is important, doing so at the expense of struggling districts only deepens inequality. The data is clear: suburban, wealthier districts may be benefiting more under the current budget drafts.

Source of image: Getty Images