Where Ohio K-12 dollars actually come from.
Half a century of revenue mix in one chart. The local share has bounced inside a narrow band around 50%. The state share has spent the last decade falling, on track to land below where it was when the Ohio Supreme Court declared the system unconstitutional. The federal share spiked during the pandemic and crashed back. The story is structural, not accidental.
Chart 01 · Stacked time-series
Bottom band is local revenue (mostly property taxes). Middle band is state revenue (foundation formula plus categorical aid, lottery profits, casino profits, TPP replacement). Top band is federal revenue (Title I, IDEA, school lunch, plus the FY20–FY24 ESSER pandemic surge). Every band sums to 100%. Annotations mark the laws and rulings that produced the visible inflections. The faded FY27–FY30 zone shows the projected trajectory if the HB 96 freeze of the Fair School Funding Plan continues — state share to roughly 32% by FY27 (Honesty for Ohio Education / Policy Matters Ohio).
Chart 02 · Anchor-point bars · qualitative
The federal annual data that drives the chart above begins in 1980. Pre-1980, Ohio K-12 revenue lived in a different federal survey (the U.S. Office of Education's Statistics of State School Systems, 1958–1980, and the Biennial Survey of Education before that), with revenue categories that aren't strictly comparable to the modern series. Pre-1976 is also a structurally different system — HB 920 hadn't yet frozen voted-millage revenue. These five bars are approximate, drawn from secondary-source ranges, not annual federal data. They show the qualitative arc.
The story before the modern data series begins, in five anchor points.
Ohio's school funding has been a constitutional question since the moment the state had a constitution. Article VI, Section 2 of the 1851 Ohio Constitution — unchanged in 175 years — instructs the General Assembly to "make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state." The 1853 Ohio School Law (the "Akron Law" extended) authorized property taxation for school operations and consolidated common schools. The 1923 Miller v. Korns decision interpreted Article VI §2 as imposing statewide responsibility for adequacy, not merely permitting local funding — a holding that sat largely dormant until DeRolph counsel resurrected it 70 years later.
Despite that constitutional language, for the first 80 years of the state's modern history Ohio K-12 was essentially 100% locally funded through property taxes. The state's contribution was symbolic — distributions from the Common School Fund (proceeds from the federal land-grant Section 16 lands granted at statehood). Federal funding was effectively zero. By 1900, the funding mix was approximately 97% local / 2% state / 1% federal.
1935 · The Foundation Program
The Depression collapsed local property tax bases, and rural districts in particular faced insolvency. Ohio responded with the School Foundation Program: a state-set per-pupil base, minus a "chargeoff" representing the district's expected local contribution at a uniform millage rate, with the state paying the difference. The architecture — base minus chargeoff equals state aid — persisted in various forms until 2011, when Strickland's Evidence-Based Model briefly replaced it before HB 153 returned to a residual approach.
Through the 1940s, 50s, and early 60s, the Foundation base and chargeoff were updated through legislation roughly every 4–6 years. Inflation routinely outpaced updates, meaning the state share eroded between updates and partially recovered after each. This pattern of reactive, episodic state-share adjustments — rather than an automatic mechanism tied to costs — is itself a continuity from the 1940s to the present. By 1955 the local share had fallen to roughly 73%, with state share around 25%.
1965 · The federal entrance
The Elementary and Secondary Education Act of 1965 (Title I) introduced significant federal funding for high-poverty districts for the first time. Federal share of Ohio K-12 revenue jumped from low single digits to roughly 5–7% over the late 1960s as ESEA flowed through. The 1975 Education for All Handicapped Children Act (P.L. 94-142, later renamed IDEA) added federal special-education funding starting in the late 1970s. By 1970, the funding mix was approximately 57% local / 36% state / 7% federal — the closest Ohio's funding mix has come, in the entire 175-year history, to a balanced three-source structure.
1976 · The regime change
HB 920 was enacted in this period. Before HB 920, Ohio property tax revenue grew automatically with reappraisals — districts did not have to return to the ballot to capture inflation. After HB 920, they did. The post-1976 era is structurally different from everything before it. Splicing pre-1976 data onto a post-1976 chart on the same continuous axis would technically be possible but would obscure rather than clarify the story the chart tells. The full effects of HB 920 took several reappraisal cycles to compound: by 1980 the structural pressure was beginning to manifest as more frequent operating-levy ballots; by 1985, it was a defining feature of Ohio school finance; by 2000, it was producing the litigation environment that yielded DeRolph.
By 1980, Ohio had spent eighty years moving away from local-only funding toward a more balanced three-source mix. By 2027 — on current projections — Ohio will have spent fifty years moving back. The trend reversed precisely when HB 920 began to compound.
A note on the data. The federal Common Core of Data series begins in school year 1986–87, with NPEFS extending the modern series back to roughly 1980. Pre-1980, federal data lives in the Biennial Survey of Education (1869–1958) and the Statistics of State School Systems (1958–1980), with revenue categories that drifted across breaks and don't directly map onto the modern series. The five anchor bars are estimates drawn from secondary sources; the broad pattern is well documented but the precise year-by-year values are not. If extracting annual pre-1980 data is important, the primary sources are LSC's School Funding Complete Resource, the ODE Education in Ohio annual reports, and the DeRolph trial record (Perry County Court of Common Pleas, 1991–1994 expert reports going back to the 1950s).
HB 920 (1976) is the single most consequential statute in Ohio school finance history.
The local share of Ohio K-12 revenue has been roughly half of the total since at least 1980. That is not a coincidence. It is the predictable arithmetic of one statute, signed in 1976.
HB 920 introduced what Ohio calls a tax reduction factor. As property values rise, the effective rate on voted operating millage is reduced so the levy raises the same dollar amount it raised when first passed. A levy passed in 1985 raises the same dollars in 2025 — even if home values have quadrupled in the interim. Inside millage (≤10 mills, unvoted) is exempt. The 20-mill floor prevents the reduction from taking the effective rate below 2% of taxable value.
The mechanical consequence is that districts above the 20-mill floor must repeatedly return to the ballot to keep up with inflation. From 1976 through 2022, Ohio voters faced 12,560 school operating levies — more than any other state in the country. That is the structural backdrop to every "should we pass another levy?" conversation in every Ohio school district.
The "phantom revenue" problem
HB 920 interacts with the state funding formula in a perverse way. The formula uses current property valuations to compute "local capacity" — but HB 920 prevents above-floor districts from collecting on those valuations. As inflation drives valuations up, computed local capacity rises, and state aid falls. The district's actual revenue is statutorily frozen, but the state acts as if the district has more money. The canonical example is Centerville City Schools, whose state per-pupil aid fell from $1,540 (FY04) to $1,485 (FY06) even as the per-pupil base rose from $4,949 to $5,283. The arithmetic punishes valuation gains in above-floor districts.
The flip side is the "guarantee" mechanism, which holds districts harmless from formula-driven decreases. Guarantees frequently fund "phantom students" in declining-enrollment districts and distort the apparent state share in the opposite direction. Phantom revenue and guarantees together make Ohio's published state share a less faithful measure of substantive state contribution than the headline numbers suggest.
The Ohio Supreme Court ruled the system unconstitutional four times — and then walked away.
On December 19, 1991, Nathan DeRolph and the Ohio Coalition for Equity & Adequacy (550+ districts) filed suit in Perry County. The Ohio Supreme Court ruled four times. Each time the General Assembly responded with a partial fix. None of the fixes durably moved the local-state mix.
The Court held the funding system unconstitutional under Article VI, Section 2's "thorough and efficient" clause and ordered a "complete, systematic overhaul." State share at the time was approximately 43%. Per-pupil revenue between the wealthiest and poorest districts diverged by an order of magnitude.
HB 650 and HB 770 were still inadequate. The Court cited that one mill yielded $272.90 per pupil in the wealthiest district versus $13.34 in the poorest — a 20× spread. The disparity itself violated the constitutional requirement of a thorough and efficient system.
The Court did not order further compliance. After eleven years and four rulings, it walked away from the case. The legislature was left to comply on its own. It largely did not. Equity improved — the lowest-quintile districts went from 70% to 99.9% of highest-quintile per-pupil revenue between FY91 and FY19 — but the local-state share rebalance the court ordered never materialized.
The DeRolph window is the second of the three brief state-share rises visible in the chart — and the only one driven by a legal mandate. Like the lottery-dedication spike before it and the ARRA-stimulus pulse after, it reverted.
Three brief windows of state-share growth in fifty years. Each one reverted.
Read across the chart, the state share peaked three times — and only three times — above its long-run trend. In every case, a temporary mechanism produced a temporary rise; in every case, the mechanism wound down and the state share fell back.
Window one · 1987–89 lottery dedication
Voters approved the lottery by constitutional amendment in 1973; sales began in 1974. In 1987, voters approved a second amendment dedicating all lottery profits to education (Article XV §6(A)). For the only three years in the entire forty-year Policy Matters Ohio series, state share exceeded local share. Then the General Assembly began offsetting GRF appropriations against lottery profits — making the dedicated dollars functionally fungible — and the state share fell back below local.
FY24 lottery profits totaled $1.51 billion, roughly 12% of state K-12 spending. The dollars are real; the additionality is not. Lottery profits substitute for, rather than supplement, the General Revenue Fund education line.
Window two · 1998–2003 DeRolph base-cost window
HB 650 (1998) implemented the Augenblick base-cost methodology. HB 770 followed. HB 94 (2001) added more. The state foundation amount rose. State share peaked around 45–47% in FY02–FY05 — visible in the chart as the second hump in the state band. Then DeRolph IV relinquished jurisdiction, and the legislative pressure relaxed.
Window three · 2010–11 ARRA + TPP replacement
The American Recovery and Reinvestment Act of 2009 routed $933 million through Ohio's foundation formula across FY10 and FY11. Simultaneously, HB 66's (2005) Tangible Personal Property phase-out reached its peak replacement payment of $1.129 billion in FY11. TPP replacement is classified as state revenue, even though it functionally replaced local revenue that the state had eliminated. The combined effect produced the apparent state-share rise to roughly 47% in FY10–FY11 visible in the chart.
Both mechanisms then phased down. ARRA was one-time stimulus. TPP replacement fell to ~$510 million by FY15 and to $68 million by FY23 — a 94% reduction from peak. The apparent state share fell with them, illustrating that much of the post-DeRolph "state share" gain was bookkeeping rather than substantive new state commitment.
Three windows in forty years. None was structural. Each was a temporary mechanism — a constitutional amendment, a court order, a federal stimulus — and in each case, the underlying statutory framework reasserted itself the moment the temporary mechanism wound down.
The Fair School Funding Plan was a turning point. Then HB 33 and HB 96 closed the window.
Between 2011 and 2021, Ohio had no inputs-based base-cost methodology. Strickland's Evidence-Based Model (HB 1, 2009) — the first inputs-based formula in Ohio history — was scrapped by Kasich's first executive budget (HB 153, 2011). The Core Opportunity Grant + State Share Index that replaced it set the per-pupil base as a budgetary residual: a number the legislature picked, not a number derived from what schools actually need to run. By FY19, 163 districts (27%) had been on the gain cap, cumulatively losing $479 million.
The first inputs-based formula since 2011. Six-year phase-in beginning FY22 (16.7% per year). Direct funding of community schools, STEM schools, and EdChoice scholarships — eliminating the deduction method. State/local share calculated on property wealth (60%) and resident income (40%). Disadvantaged Pupil Impact Aid raised from $272 to $422 per pupil. Full phase-in scheduled for FY27 with a base cost of approximately $7,200 per pupil.
Universal voucher eligibility. Family income ≤450% FPL receives the full scholarship ($6,165 K-8 / $8,407 9-12 in FY24); above 450% FPL prorated to a floor around $650 (K-8) / $950 (9-12). Voucher participation jumped from ~23,000 students (2023) to over 88,000 (2024) — a 283% increase. FY24 scholarship allocation: $964.5 million; FY25: $1.05 billion. A Franklin County trial court ruled the universal program unconstitutional in June 2025; the ruling is stayed pending appeal.
Froze FSFP base-cost inputs at FY2022 cost figures, refusing to update the staffing-and-compensation inputs that were the entire methodological foundation of the Fair School Funding Plan. Net K-12 increase: $281.9 million over the biennium, versus the $3.04 billion the FSFP formula would have produced under updated inputs (Policy Matters Ohio analysis). 161 of 609 districts received more than they would under FSFP — most in low-poverty areas; high-poverty districts cumulatively lost $34.6 million.
State share is projected to fall to ~32% by FY27 on current trajectory — lower than it was when the Ohio Supreme Court declared the system unconstitutional in 1997. The FSFP, in the words of advocacy organizations, is effectively abandoned.
ESSER produced the cleanest federal-share spike in the entire series — and then the cliff hit.
Pre-pandemic federal share of Ohio K-12 revenue ran 7–8%. The peak was FY22 at 14.6% ($4.379 billion of $30.0 billion total). In the chart, the federal band — a thin ochre stripe across forty years — fattens dramatically at the right edge before crashing back.
ESSER I (CARES Act, March 2020): $489.2 million. ESSER II (CRRSA, December 2020): $1.991 billion. ESSER III (ARP, March 2021): approximately $4.5 billion. Plus $127.6 million in GEER discretionary funding.
The ESSER III obligation deadline was September 30, 2024; final liquidation by January 28, 2025 with extensions possible to March 2026. After that, federal share returned to roughly its pre-pandemic level. LSC projected total state primary/secondary spending to drop $1.6 billion in FY25 — a 10.4% fall — primarily from ESSER expiration.
For above-floor districts like Sycamore, these statewide failures land with disproportionate force.
Sycamore Community City School District in Hamilton County is structurally in the position the chart implies for above-floor districts: approximately 25.7 effective operating mills (above the 20-mill floor by roughly 5.7 mills), and approximately 85% locally funded in its General Fund. NCES data for SY2016-17 showed Sycamore at 79.4% local / 17.0% state / 3.6% federal on total revenue; isolating General Fund operating revenue (which excludes capital, food service, and federal grants) lifts the local share to ~85%.
The structural arithmetic matters. Roughly 478 of Ohio's 611 districts (78%) are at the 20-mill floor, meaning they capture inflationary growth on their voted operating millage automatically. Sycamore is in the minority that does not. Its only inflation-responsive revenue source is inside millage at 4.63 mills — the unvoted, statutory portion. A 22% Hamilton County valuation jump in 2023 produced almost no new operating revenue for Sycamore beyond the inside-millage share, because HB 920's reduction factor rolled back the voted millage. Meanwhile, the FSFP local-share calculation treats the higher valuation as higher local capacity, depressing Sycamore's already-low state share further.
The district's per-pupil expenditure (~$15,000–$17,500) is modestly above the Ohio average. Sycamore earned 5 stars on the 2024 Ohio Report Card — top 4% statewide. The combination — high performance, high local share, above-floor status, no significant new operating money in well over a decade, and reserves projected to fall below the board's 25%-of-expenditures policy by FY27 — is not a story of local profligacy. It is the predictable mathematics of the structural framework documented above.
Sycamore's predicament is not local mismanagement. It is the predictable arithmetic of HB 920 acting on a high-wealth, above-floor district while the state quietly sheds its share of the bill.
Three windows of state-share growth in fifty years. Each reverted. By FY27, on current projections, Ohio's state share of K-12 revenue will be lower than it was when the Ohio Supreme Court declared the system unconstitutional in 1997. The chart is the receipt.
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