Buckeye Local School District - How Schools are Funded

How Schools are Funded

ohio school funding - a state-local partnership

Ohio's constitution requires the state and local communities to share the cost of public education:

The state contributes money from Ohio's budget, which comes from income taxes, sales taxes and the Commercial Activity Tax.
Local communities contribute mostly through property taxes, and in some districts a voter-approved income tax.

The goal of this partnership is to make sure every student has access to a high-quality education, no matter where they live.

where buckeye's funds come from

Buckeye Local Schools’ General Fund pays for the district’s day-to-day operations, including staff, transportation, utilities, supplies and building upkeep. It is supported by three main sources:

State funding: Buckeye’s largest source of revenue. More than half of the General Fund comes from the State of Ohio, mainly through the Fair School Funding Plan. It also includes state reimbursements for property tax credits that lower homeowners’ tax bills.
Local property taxes: About one-third of the General Fund comes from local property taxes on real estate and public utility property in the district.
Other revenue: A small share comes from interest earnings, fees, tuition and other miscellaneous sources.

Buckeye does not have a school district income tax, so local support comes from property taxes. Because the district relies heavily on state funding, changes in state budget decisions and school funding laws have a significant effect on Buckeye’s finances.

how the fair school funding plan works

Since 2022, Ohio has funded schools through the Fair School Funding Plan, which works in three steps:

Base cost: What it costs to educate a typical student and operate a district. It's built from 22 cost components in five areas: teachers, student support, district leadership and accountability, building leadership and operations, and athletics and co-curricular activities.
Categorical aid: Additional funding for students with greater needs or specialized programs:
1. Special education
2. Disadvantaged Pupil Impact Aid (DPIA) (see our Student Wellness & DPIA page)
3. English learners
4. Gifted education
5. Career-technical education
6. Transportation
State and local share: How much of the base cost the community is expected to pay, based on its "capacity." That capacity is measured by local property values and residents' incomes. The state pays the rest.

WHY STATE FUNDING IS SHRINKING

Each year, the formula updates several inputs, such as property values, resident incomes and enrollment. However, the base cost inputs have been frozen at fiscal year 2022 cost levels. As property values and incomes rise, the formula assumes communities can pay more, while the cost of education it uses stays the same. The result is that the state's share goes down and the local share goes up.

Fiscal Year	Statewide State Share	Base Cost Inputs Used
FY2022	41.6%	FY2018 costs
FY2024	43.3%	FY2022 costs (updated)
FY2025	38.4%	FY2022 costs (not updated)
FY2026	35.0%	FY2022 costs (not updated)
FY2027	32.2%	FY2022 costs (not updated)

Source: Dr. Howard Fleeter, testimony to the Ohio House Education Committee, March 4, 2025

RECENT STATE PROPERTY TAX CHANGES THAT AFFECT SCHOOL REVENUE

In 2025, the Ohio General Assembly passed several laws that change how property taxes support schools. Most took effect beginning with the 2026 tax year:

HB 186: Caps revenue growth for districts at the 20-mill floor at the rate of inflation, and creates the new "Inflation Cap Credit" on tax bills.
HB 335: Caps revenue growth from inside (unvoted) millage at the rate of inflation.
HB 129: Counts emergency and fixed-sum levies in the 20-mill floor calculation, which can change whether a district stays at the floor.
HB 96: Allows counties to offer an additional homestead and owner-occupancy property tax reduction. Unlike the state programs, these amounts are not reimbursed to school districts.

How does this affect Buckeye? State aid is Buckeye's largest source of revenue, so decisions made in Columbus have a major effect on our budget. As property values in our community rise, the formula calculates that Buckeye can contribute more locally, which reduces state aid. At the same time, new state property tax laws limit how much local revenue can grow, especially for districts like Buckeye that are at the 20-mill floor. Together, these changes put pressure on the district's budget from both directions. That's why careful, long-term financial planning is so important.

how enrollment affects funding

State funding under the Fair School Funding Plan is calculated per pupil, so the number of students the district educates has a direct effect on how much state aid Buckeye receives. Like many districts across Ohio, Buckeye has experienced a gradual decline in enrollment in recent years.

To soften the impact of year-to-year changes, the state formula uses the greater of the prior year’s enrollment or a three-year average. This gives districts time to adjust, but over time, fewer students means less state funding.

Declining enrollment doesn’t reduce costs at the same rate. The district still operates the same buildings, runs bus routes across the same geographic area, and maintains the programs and services students need, whether a classroom has 20 students or 24. That’s one reason the district plans carefully and looks for efficiencies while protecting the quality of education.

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