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Republican state Sen. Matt Huffman is introducing a state-level bill that would allowing schools to place some employees on unpaid furlough in 2020-21 and address tangible personal property tax issues.
Seeking federal money
Last week, Democratic state legislators asked Congress to increase investment in the federal Education Stabilization Fund for K-12 schools nationwide by at least $100 billion. They cited the $300 million-plus in education cuts that Ohio has already made as an example of the need nationwide.
“In the midst of an unprecedented crisis, we should be increasing, rather than decreasing, our services in support of our communities,” the Democrats’ letter to Congress said. “… Failing to support public education at our time of greatest need will compound the effects of this recession on the next generation.”
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Ohio tax revenues have dropped significantly in recent months due to coronavirus-related shutdowns. Thousands of people were forced out of work and thus are paying less income tax, and with businesses closed for a stretch, sales tax receipts also are down.
The state of Ohio is required to operate on a two-year balanced budget, so when tax revenue shrinks, cuts have to be made. The federal government does not have to balance its budget, allowing it to send stimulus money to states in times like the Great Recession of 2007-09 and this year.
A first round of help came in the form of the federal CARES Act, which is providing more than $400 million to Ohio K-12 schools.
It’s still unclear how big Ohio’s 2020-21 budget cuts will be, but the legislators cited a “substantial budget shortfall.” The called for federal help with special education funding and Title I funding for low-income students.
Furloughs in state bill
Meanwhile, Huffman’s proposed Senate Bill 319 would have at least two financial impacts.
According to Ohio’s Legislative Service Commission, the bill would allow a school board to place any school employee on unpaid furlough in 2020-21 “if the employee is not needed during that period, or for financial reasons.” The furloughs could be “temporary, periodic or continuing.”
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Furloughed employees would be allowed to use accrued but unused leave to continue being paid during the furlough, and school boards could allow them to continue insurance coverage “to the extent permitted by the policy.”
Employees returning from furlough would resume their previous contract status but would not be guaranteed the same job assignment unless an existing union contract required it.
Also as part of Huffman’s bill, any school district where the value of certain taxable utility property dropped by 10% or more in recent years would receive a payment to offset the loss.
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