Sources of Revenue for Ohio Public Schools

The four main sources of revenue for Ohio public school districts are:

1. Local Taxes
   Local funds are collected primarily through Property Taxes collected by local governments on real property (land and buildings) for residential, agricultural, commercial, and industrial property. Except for a small portion of rates known as inside millage, property tax rates are primarily voted on by the community.
    
2. State Funds
   State funds are collected through income and sales taxes, lottery and casino profits, and other taxes. Ohio’s funding formula has moved to combining a Formula Aid (used for general purposes) and Categorical Aid (for specific state-identified purposes such as student identified needs and other needs such as transportation) into one formula.  Each district’s unique calculated amount is shared by local sources with an offset based on the amount of property wealth and income wealth per student where the wealthiest districts receive the least and the neediest receive the most.
    
3. Federal Funds
   Federal funds are collected through federal income taxes. This money is targeted for specific programs. Schools receive this funding only if they participate in these programs. Some examples include funding for disadvantaged families, students with disabilities, food service programs, and vocational and student learning options such as charter schools.
    
4. Other Revenue
   There is a growing popularity in non-tax funding sources, such as:

• Tuition from student learning options such as open enrollment and intergovernmental agreements
• Earnings from investments
• Community business/school partnerships
• Rental revenues from facility use
• Student fees
• Earnings on investments

Funding from each source tends to vary by district type. Urban districts tend to get a higher percentage from state sources. Suburban districts with higher property values get more from local sources. Rural districts fall somewhere in between urban and suburban districts, relative to the property and income wealth of the district.

In general, local property taxes and state aid make up the largest shares of a typical district's revenue. The specific percentages from each source are determined by factors like the wealth of the local tax base.