Ohio is now covering a smaller share of its public school funding formula than at any point in more than two decades, even as the state pours record total dollars into education. The state's contribution has tumbled from about 43.3% in fiscal year 2024 to roughly 32.2% heading into fiscal year 2027, according to figures cited by researchers tracking the formula's phase-in.
A Freefall Three Years in the Making
The decline unfolded in stages: 43.3% in fiscal year 2024, dropping to 38.4%, then about 35% in fiscal year 2026, and now a projected 32% of the formula's base cost in fiscal year 2027, as reported by NBC4 WCMH-TV. Howard Fleeter, a research consultant with the Ohio Education Policy Institute, said the state's share had never dropped below 40% before this three-year stretch dating back to 1999. The Fair School Funding Plan work group has called the current level a historic low, per the same report.
Fleeter explained the mechanics behind the slide: when the calculated cost of educating students stays the same but local property values and income figures rise, the local share of the burden increases while the state's share falls. That is effectively what has happened as Ohio updates local ability-to-pay figures, using a dual-indicator formula that weights assessed property values at 60% and resident income at 40%, according to Cuyahoga Falls City School District. Because property values have risen sharply since the pandemic, districts now appear wealthier on paper, shifting more of the formula's cost onto local taxpayers even where budgets haven't changed.
A Formula Frozen Mid-Phase-In
The Fair School Funding Plan itself traces back to 2017, when former Republican House Speaker Bob Cupp and former Democratic state Representative John Patterson began developing it. Ohio lawmakers began phasing the plan into the state budget starting in fiscal year 2022, after the Ohio House passed it in 2020, and the plan was designed to reach full implementation in fiscal year 2027 — the very year the state's share is now projected to bottom out near 32%.
Patterson told the outlet that the phase-in was built on an assumption: that lawmakers would keep updating the formula's cost inputs — covering salaries, benefits and other operating expenses — as actual expenses changed. Instead, the base-cost inputs have remained locked to fiscal year 2022 data even as property values were updated, and Patterson noted the requirement to refresh those cost inputs was never written into law. He recommended updating salaries, insurance costs and operating costs to the most recent available data, and said other elements — including funding for students with disabilities, economically disadvantaged students, English learners and transportation — still need updates or rely on older calculations, a point Fleeter echoed as well.
The Statewide Numbers Behind the Squeeze
The scale of the shift shows up statewide. An Ohio Education Policy Institute analysis found that 531 of Ohio's 609 public school districts saw their state funding share drop in fiscal year 2026, and 506 districts — 83.1% — are projected to see a further decline in fiscal year 2027, with zero districts gaining ground. Policy Matters Ohio has estimated separately that failing to update the base-cost inputs shortchanged Ohio districts by roughly $2.75 billion over the two-year budget cycle, a figure Hoodline previously reported in coverage of property tax relief proposals.
Meanwhile, total state education spending is climbing to record numerical highs — from $11.14 billion in fiscal year 2025 to an estimated $13.75 billion in fiscal year 2026 and $14.09 billion in fiscal year 2027, per the Ohio Department of Education and Workforce. Fleeter said that dynamic can coexist: total spending can rise even as the state covers a smaller percentage of the formula-calculated cost, because a growing slice of that spending flows toward things like private school vouchers rather than the traditional public school formula. Ohio's five voucher programs alone reached $1.09 billion in fiscal year 2025 following the state's move to universal EdChoice eligibility, according to the Ohio Capital Journal.
A Legal Fight That Never Fully Ended
Ohio's current funding structure exists in the long shadow of DeRolph v. Ohio, in which the Ohio Supreme Court ruled in 1997 that the state's school funding system was unconstitutional, finding that reliance on local property taxes created inequities between property-rich and poorer districts. The court continued to find the system unconstitutional in subsequent rulings before ending its oversight in 2003, as Education Week reported at the time, leaving enforcement of a constitutionally adequate system to the legislature without ongoing court supervision.
That legacy of legislative-only enforcement has left districts dependent on lawmakers voluntarily updating the formula. Because Ohio's House Bill 920 automatically scales down local property tax rates when home values rise, but includes a 20-mill floor that leaves two-thirds of districts vulnerable to inflation, Chardon Local Schools notes that Ohio holds more school levy elections than any other state, with only about 53% historically winning voter approval. That pressure has already played out locally: Hoodline has reported on Cleveland Heights job cuts and on Lake County districts pushing new income tax levies as state aid recedes.
What Happens Next
Patterson said the state needs to fund the formula so that no party — state, district or taxpayer — ends up losing. If lawmakers don't act before the next biennial budget, the earliest opportunity to update the cost inputs would come when they write the following two-year budget, since doing so sooner would require additional legislative action and new state funding. Patterson said all of the formula's categorical components need to be implemented now that the underlying studies behind them are complete.
Whether that happens remains an open question. Ohio's state contribution share had already fallen to between 30% and 32% by 2023, ranking the state 45th nationally, according to Liberty-Benton Local Schools — a steep drop from the roughly 40% to 44% share Ohio covered in the years just after the DeRolph rulings, when it ranked closer to 35th nationally. Whether lawmakers revisit the formula's frozen inputs in the next budget cycle, as Hoodline has noted in earlier Columbus funding coverage, will determine whether more districts turn to local levies and cuts in the years ahead.
