The start of the biennium budget process in Ohio has brought concerning news for our district. Once again, the budget plan seeks to eliminate state TPP reimbursements to school districts like ours for lost local revenues.
The Tangible Personal Property tax was a business tax that was removed as part of overall tax reform in 2005 as a way to improve the business climate in Ohio. The TPP taxes were local dollars that were paid directly to schools.
To lessen the severe economic impact for schools in the face of losing those local revenues, the legislature created hold harmless reimbursements, directing state funds to school districts to make up for the business tax breaks. School districts like ours supported positive changes in the taxing structure to help businesses. However, the intent was never for school districts and residents to have to shoulder the entire responsibility of making up those losses.
Although it has not been easy, our district has already absorbed millions of dollars in annual lost revenue as the state cuts back on these reimbursements during the economic downturn. In fact, we are now collecting $6 million less a year, or about $392 per student less each year in lost TPP reimbursement revenues.
We have adjusted to those cuts over the years. We have done our part locally to adapt to the cuts in TPP reimbursement revenues and help stretch our levy cycles as long as possible. We have stretched the 2011 levy past the three-year commitment, but we cannot accept the further gutting of these necessary reimbursements. These were local dollars the state eliminated in the name of tax reform. This has further shifted the tax burden on residential property owners.
In response, our district is already at work through our membership in the Alliance for High Quality Education. Work is being done to share easy-to-understand and meaningful data surrounding the TPP issue and its impact on Ohio school districts.
As we cautioned following the state’s FY 2012-13 budget process, when state law finally included permanent TPP reimbursement for districts like Hilliard, our fight to maintain this critical funding would likely continue. This is where we are now – ready to work with other excellent school districts take whatever action is necessary to protect this reimbursement revenue during the current state budget cycle.
We are still early in the budget process and believe we can influence the process as we have done so effectively with your help in the past. As the budget is scrutinized first in the Ohio House, we will continue to update you and make sure you ready to step up and engage in the process when the time is right.