How SB 89 Amends EdChoice and Impacts School Districts

On Friday, November 27, 2020, Governor DeWine signed Senate Bill 89 (“SB 89”) into law, overhauling Ohio’s EdChoice laws. The Governor’s signature comes after the General Assembly quickly voted to rewrite SB 89 with little time for public input.

Because of SB 89, EdChoice will evolve over a five-year period and will continue to impact public education negatively by removing funds from public education. It is particularly troubling that the new methodology will have a direct and adverse impact on school districts with low-income students.

Performance-Based

A student can be eligible for a “first-time,” performance-based scholarship based on his/her school building’s performance. Under current law, there are six ways a building’s performance can allow the student to obtain a scholarship to attend a private school. Under SB 89, those ways will be overhauled. For the 2021-2022 school year, there will be two ways. For the 2022-2023 school year and beyond, there will be one way. While the number of ways will be reduced, the criteria for each way will be broadened such that the pool of buildings is not expected to decrease.

2021-2022 Eligibility

For the 2021-2022 school year, a student seeking a “first time” scholarship can obtain scholarship to a private school in two ways:

1.The student satisfies all three of the following criteria:

During the 2020-2021 school year, the student was in grades K-12 and enrolled in a public school, private school or was homeschooled;
The student was eligible to receive a performance-based scholarship for the 2020-2021 school year; and
The student would be enrolled in a building that, in the 2019-2020 school year, met a condition under prior law to receive a scholarship.

2.The student satisfies both of the following criteria:

Over a three-year average, at least 20% of students entitled to attend the student’s district were qualified to be included in the formula to distribute Title I funds[1]; and
The student’s building is ranked in the lowest 20% of all buildings operated by school districts based on its performance index score (“PI Score”) for both the 2017-2018 and 2018-2019 school years.

As it relates to PI Score, SB 89 represents a substantial expansion of student eligibility. Under existing law, a student is eligible for a scholarship if his/her building is in the lowest 10% of all buildings (with certain exceptions). SB 89’s change expands this to the lowest 20% as long as it meets the new Title I criteria.

A student seeking to “renew” scholarship (i.e., the student was first awarded a scholarship in 2020-2021 or earlier) may continue to receive scholarships as long as the student meets certain criteria related to attendance, residency, and completion of assessments.

Performance-Based Scholarships have been–and will continue to be–deducted from a district’s state foundation funding.

2022-2023 and Beyond

Beginning with first-time scholarships issued for the 2022-2023 school year and thereafter, a student can obtain a first-time scholarship if the student meets both of the following criteria:

A. Over a three-year average, at least 20% of students entitled to attend the district were qualified to be included in the formula to distribute Title I funds; and

B. The student’s building is ranked in the lowest 20% of all buildings according to PI Score in certain school years:

For 2022-2023 scholarships: the 2017-2018 and 2018-2019 rankings;
For 2023-2024 scholarships: the 2020-2021 and 2021-2022 rankings; and
For 2024-2025 scholarships and beyond: two of the three latest rankings.

Income-Based Scholarship

SB 89 retains Income-Based EdChoice Scholarships and expands eligibility. Income-based scholarships allow students to obtain EdChoice scholarships based on family income regardless of building performance. The current family income eligibility threshold is 200% of the federal poverty line (FPL). SB 89 expands income eligibility to 250% FPL. SB 89 also will allow families with incomes between 250% to 300% FPL to qualify for a scholarship that is 75% of the full scholarship amount.

Income-based scholarships are not deducted from a district’s State foundation funds. Rather, the funds are paid directly by the State of Ohio.

Final Analysis

Throughout 2020, the General Assembly has proposed amending EdChoice at different times and in different manners. Ultimately, SB 89’s amendments to EdChoice will continue to adversely impact public education for years to come. In any given school year, 20% of public-school buildings will automatically meet one of the two criteria to become eligible. Alarmingly, those buildings only “avoid” eligibility status (i.e., students cannot obtain performance-based scholarships) if the district does not average more than 20% Title I students. Since Title I students are identified primarily by income, this exposes districts with a higher percentage of low-income students to the perils of EdChoice and the associated loss of funding.

Furthermore, for the 2021-2022 and the 2022-2023 school years, performance-based scholarships will be based on report card data from the 2017-2018 and 2018-2019 school years. This means that eligibility for the 2022-2023 school year will be based on “stale” performance data that is seven years old. This also means that Districts can already determine which buildings will meet the criteria for next school year (2021-2022) and the following school year (2022-2023).

As those that attended our presentation on EdChoice during the OSBA Capital Conference will recall, there have been ongoing concerns related to districts paying for “phantom” students as well as the lack of performance or financial accountability for private schools. SB 89 does not address these issues in any way.

[i] The Legislative Service Commission stated that this percentage is calculated as follows: “children aged 5-17 (1) below the poverty level, (2) above the poverty level but receiving Temporary Assistance for Needy Families (TANF) payments), and (3) in institutions for neglected or delinquent children in foster homes, divided by the age 5-17 population.)”