COLUMBUS, Ohio (WDTN) – The Dayton Public School District was awarded more than $23.6 million after a judge issued a decision to award three Ohio public school districts $42 million plus interest due to the Ohio Department of Education’s unlawful reduction of school funding for fiscal years 2005-2007. 

Judge Gina R. Russo of the Franklin County Court of Common Pleas issued this decision on September 10, 2020. However, that decision could be appealed. At this time, none of the three school districts have received the money. 

The Dayton, Cleveland and Toledo city school districts each sought the recovery of funds that it was entitled to receive if ODE had calculated funding according to law. The trial court ruled that all three districts were found to have been unlawfully deprived of funding by ODE.

“Our students who lost educational opportunities because of the Ohio Department of Education’s failure to follow the funding formula, are likely long gone from our district,” said Dr. Elizabeth Lolli, Superintendent of Dayton Public Schools. “But the funding that flows from the court’s decision will provide an opportunity for students filling their seats today. We take comfort in knowing that our current students, parents, and staff will be the beneficiaries of the money awarded by the court.”

In a release, Dayton Public Schools explained how the funding miscalculations happened.

The underpayment to these districts was the direct result of ODE’s decision in 2005 to substitute an unlawful funding methodology for the methodology established by the legislature and specified by law. Prior to the litigation resulting in the recent award to these three urban school districts, a fourth district, the Cincinnati City School District, filed a lawsuit in 2006, securing a $6 million judgment in its favor based on the same unlawful underfunding by ODE. The Dayton City School District and ODE then negotiated a settlement of a portion of Dayton’s similar claims, pursuant to which Dayton was paid over $7 million by ODE. After ODE paid a total of over $13 million to Cincinnati and Dayton, the Ohio General Assembly enacted legislation that partially insulated ODE from further claims, doing so without public debate and for the sole purpose of limiting claims by other districts. The intent of this legislation was to relieve ODE of accountability for having unlawfully deprived Ohio school districts of tens of millions of dollars in funding.    

In the litigation recently decided, Dayton sued for the unsettled portion of its claims. Together with Cleveland and Toledo, Dayton challenged the legislation as unconstitutional, in violation of the Ohio Constitution’s prohibition on retroactive legislation and other provisions of the Ohio Constitution. Both the trial court and the court of appeals agreed that the legislation was unconstitutionally retroactive (and did not rule on the districts’ other arguments). But the Ohio Supreme Court, notwithstanding several prior cases to the contrary, found that the retroactivity clause does not protect political subdivisions such as school districts. The case was remanded to the Franklin County Court of Common Pleas for consideration of the districts’ other legal arguments.   

The districts prevailed. The court found that ODE failed to fully comply with its statutory duty to ensure that school district funding. The amount awarded Dayton is significantly greater than the amounts awarded the other two districts primarily because Dayton had a significantly greater number of resident district students who elected to attend a community school in 2005 for whom ODE did not properly credit the district for funding purposes.  

ODE’s intention to pay the judgment and stop the rapidly accruing interest on the judgment or file an appeal is unknown at this time. 

“The financial implications of continuing the litigation cannot be overestimated,” said Jim Hughes, an attorney with Bricker & Eckler representing the plaintiffs. “Post-judgment interest awarded by the court on the entire award is accruing from the date of the decision at a rate of over $100,000 per month. And, yet, while $42 million is a significant sum, it represents less than one percent of the state’s appropriations for Basic Public School Support education budget.”