Inequity found throughout state school funding systems has been a common problem infecting the Midwest.

Ohio is not the first state to address the issue of inequity of school funding, said Elaine Mills, school finance specialist at the Michigan Department of Education. Michigan recently overhauled its school funding system, she said.

Michigan was facing problems similar to those faced in Ohio.

"For years, people were complaining about a couple of things," Mills said. "They were frustrated with the outrageous property taxes that seemed to be continually growing. They were also upset with the disparity and inequity across the state in per pupil spending."

Ohio residents also are complaining of the reliance on property taxes. The Ohio Supreme Court mandated in DeRolph vs. the State of Ohio, the case in which Ohio's system of funding public schools was declared unconstitutional, that Ohio must give Ohio residents property tax relief.

Mills tried a different approach to property taxes. In August 1993, the Michigan legislation made a drastic move by eliminating the property tax-based system of funding, which the governor later supported, Mills said.

"It was a two-part plan," she said. "The plan was to increase the state sales tax from 4 cents to 6 cents. It also reinstated some property taxes."

After the system overhaul, every property had a tax base of 6 mills. Also, schools could only levy additional money for general school operation up to 18 mills, she said. A mill is one-tenth of 1 percent of the assessed value of property in the district.

Elaine Mills said the problem was that in the past when a vote to raise the state income tax was presented to the people, it was voted down. But, in March 1994, the Michigan legislature developed a back-up plan in which school funding would not die in the hands of the voter.

This plan said that if the states sales tax failed, income tax for Michigan residents would go up.

"No matter how the vote turned out, education would be funded," Mills said.

Michigan also revamped its formula for school funding, she said. Public schools receive money based on a per-pupil grant. Ohio's public schools are based on a Basic Aid formula that computes such factors as the cost of doing business and a charge-off rate.

"The amount of money distributed to each school district is different," she said. "Each district would get more than the year before. Those at the top of the list would get small increases in funding, while those at the bottom of the list would get much larger funding increases."

The idea behind this funding formula was to close the gap in disparity of school funding in state school districts.

Mills said she thinks the plan is working fine. "People are still concerned with property taxes," she said. "Each district has its own opinion."

West Virginia also is having problems with its school funding formula.

Joe Panetta, director of school finance for the West Virginia Department of Education, said a lawsuit, Tomblin vs. Gainer, is pending that addresses a Circuit Court decision made in 1983 in Paulay vs. Bailey.

A group of parents filed the second lawsuit. They claimed the state is not doing enough since the Paulay decision, Panetta said.

The Paulay decision called for a redesign of the school funding formula to make the distribution of state funds more equitable with all West Virginia school districts, he said.

The plan asked the state legislature to develop a master plan for education, he said.

"The parents are angry because the state has not yet fully implemented the master plan," Panetta said. "They have filed a motion to enforce the judgement."

The lawsuit is ironic because West Virginia was listed in Education Week as having the second most equitable school funding system nationwide. Hawaii is the first, with only one school district, he said.

Though not as recent, another Midwestern state has had to rethink its school funding system.

In 1989, Kentucky's system for school funding and its entire system of elementary/secondary education system was declared unconstitutional according to the state's constitution, said Susan Goins, branch manager in the Finance Department of the Kentucky Department of Education.

The state legislature was faced with a very large challenge on its hands. It instituted the Kentucky Education Reform Act.

"The legislature redid the whole nine yards," Goins said. "It started from ground zero."

The reform act adjusted what each district could produce locally. The local districts could raise money for the schools through the institution of property taxes and utility taxes, she said.

"The local districts are allowed to raise property taxes and to levy an occupational (payroll) tax," she said.

Kentucky residents also are faced with state level taxes for education. Education earns its money from a state sales tax increase from 3 cents to 6 cents, a property tax and an income tax.

Goins said the reform act has helped close the gap on inequity in the public schools significantly. "It's been cut in half," she said.

Many people support the change, Goins said. "There's still a lot of support, but people don't want to have to pay any more taxes."

The current Kentucky legislators are keeping the funding formula, but are discussing bills that would address other issues of the education system, Goins said.

"I hope they don't get anywhere," she said. "Our past legislators worked really hard and did a good job for education."