Ohio school districts were promised reimbursements for revenue lost under the sweeping property tax overhaul signed by Gov. Mike DeWine last year, legislation that saved homeowners roughly $3 billion.
But county auditors say the numbers aren't quite adding up, leaving Greater Cincinnati districts short by more than $2 million. That includes Cincinnati Public Schools, which was recently placed in fiscal precaution status after the state flagged a multimillion-dollar deficit in its financial forecast.
Other districts were overpaid. Monroe Local in Butler County and Lebanon City in Warren County each received more than $1 million above the value of the actual credit.
Here's how the error occurred and what districts and state officials are doing about
it.
Why school districts were overpaid, underpaid
School districts were notified in an August release by the Ohio School Boards Association that there had been an "issue" with the way the state doled out reimbursements to school districts that lost property tax revenue.
The reimbursements guaranteed in the recently passed House Bill 186 – which provided homeowners nearly $1.7 billion in property tax credits to offset large spikes in home values – did not align with the actual credit granted to taxpayers.
In short, the state calculated school reimbursements one way, while counties calculated taxpayer credits another way, accounting for the discrepancies, Cincinnati Public Schools Treasurer Mike Gustin told The Enquirer.
According to the school board association, the problem stems from how the law was written, not from how the Ohio Department of Education and Workforce or the Ohio Department of Taxation administered the payments.
Now, the association is working with county auditors to assess the impact to districts and find a legislative solution, the release stated.
Some districts, like CPS, say they have yet to hear from the state's tax department regarding the underpayments and overpayments. The Ohio Department of Taxation did not respond to questions about the discrepancy or how the state plans to address it before this story published.
Meanwhile, in Columbus, legislators are proposing amendments to House Bill 186 in the form of House Bill 1022, which was introduced Oct. 1.
The new bill would refund taxpayers who overpaid by more than $25. But it does not have any language addressing the reimbursement discrepancies affecting school districts.
Look up how much your district was overpaid, underpaid
Will this impact school budgets?
Several school treasurers said the error is unlikely to create immediate problems because districts had already finalized their budgets when the reimbursements arrived.
Southwest Local Schools' Treasurer Thomas Lowe said "there has been no communication from the state regarding an 'underpayment,'" which amounted to over $400,000 less than what the district was owed in Hamilton County.
Lowe said the district did not make any cuts directly due to the underpayment, but the ongoing downward trend in property tax revenue and the loss of state aid have motivated a whole other slate of cuts in Southwest Local. In recent years, the district serving about 4,000 students has had to cut 12 teachers and over a dozen support and athletics staff due to budget constraints.
Gustin said Cincinnati Public Schools' latest budget, which included more than 100 staff reductions, was not affected by the roughly $398,000 reimbursement shortfall.
Still, Gustin said it's difficult to measure "how much this underpayment hurts us" because the district's financial forecast changes as revenue projections are updated.
Nevertheless, "I'd love that money, for sure," Gustin said. "That's four teachers we can put in schools."
The dollars really boil down to "a reduction in projected available resources rather than as a reduction that by itself required ... program or staffing cuts," St. Bernard Elmwood Place City Schools' Treasurer Nicholas Hendricks said.
St. Bernard Elmwood Place City Schools, a small district in Hamilton County, anticipated a reimbursement around $207,000 and received slightly more than half that, at $130,000.
This article originally appeared on Cincinnati Enquirer: Ohio promised schools repayment. Why some got less than expected
