by Pamela Leist | Jan 14, 2016 | Board Policy & Representation, Construction & Real Estate, School Finance, School Management
On December 30th, 2015, the Ohio Supreme Court unanimously declared that real property owned by a public school district board of education is tax exempt regardless of whether it is currently used for school purposes. Ennis Britton Shareholder Gary Stedronsky represented the Talawanda City School District Board of Education at all levels of appeal, including before the Supreme Court.
The case involved a provision in Ohio law that generally exempts real property owned by a public school district from property taxes, which is codified in Ohio Revised Code section 3313.44. In this case, the Talawanda City School District Board of Education (the “Board”) purchased 154 acres of land to build a new high school. A portion of this land was not needed for the high school and was leased by the Board to a farmer.
In January of 2010, the Board filed an application to exempt all 154 acres from real property taxes. The Tax Commissioner approved the exemption application for all but the portion of the land that was leased to the farmer. The Tax Commissioner concluded that the pecuniary benefit realized by the farmer disqualified the land from tax exemption because the property was not being used for school purposes.
The Board appealed the Tax Commissioner’s decision to the Ohio Board of Tax Appeals (“BTA”), which affirmed the Tax Commissioner’s decision. The Board further appealed to the Ohio Supreme Court.
The Supreme Court was tasked with deciding whether the BTA decision was supported by the language in Ohio Revised Code section 3313.44. The applicable version of section 3313.44 simply states: “Real or personal property owned by or leased to any board of education for a lease term of at least fifty years shall be exempt from taxation.” The Board argued that this statute requires that a board of education merely own real property in order for it to qualify for tax exemption. In other words, there is no requirement in the statute that the property must be used for school purposes in order for the tax exemption to apply.
The Ohio Supreme Court agreed with the Board’s argument and concluded that the property that was leased to the farmer was exempt from taxation regardless of the specific use of the property. The Supreme Court acknowledged that past interpretations by the Tax Commissioner may have correctly interpreted an implied use restriction in the prior version of the statute. However, the Court recognized that the General Assembly chose not to include such a restriction when the statute was amended in 2010 even though it had authority to do so. Therefore, the Court held that the statute does not include an implied use restriction and the Board’s property is entitled to tax exemption even though it was leased to a farmer.
The Court also dismissed the Tax Commissioner’s argument that the Board’s request for tax exemption must be denied on grounds that the Board overstepped its legislative authority by leasing the land to a farmer for a commercial purpose. The Court held that a Board of Education’s property is entitled to tax exemption as long as it meets the conditions of the exemption statute in Ohio Revised Code section 3313.44, which merely requires ownership.
Ultimately, the Supreme Court decision clarifies that a board of education is entitled to a property tax exemption for all real property owned by the board of education regardless of how the property is currently being used. This decision is very favorable to school districts and will be used in the future to support applications for tax exemptions.
Talawanda City School District Board of Edu. v. Testa, Tax Commissioner (Ohio 2015), Slip Opinion No. 2015-Ohio-5450.
by Gary Stedronsky | Jan 12, 2016 | Labor and Employment, School Management
The U.S. Supreme Court heard oral arguments on January 11th in an important case that could eliminate union “fair share fees” and make every state in the country a “right to work” state.
The case was initially filed in California and involves a group of teachers who decided not to join the teachers’ union. It is interesting to note that the case has almost no factual record. This is because the teachers admitted that the lower courts did not have the authority to decide in their favor in light of the U.S. Supreme Court’s 1977 decision in Abood v. Detroit Board of Education, 431 U.S. 209 (1977). They requested that the lower courts rule against them so the case could be presented directly to the Supreme Court.
It was somewhat surprising that the Supreme Court even agreed to hear the appeal because it previously approved fair share fees in the Abood decision. We thought this might be an indication of the Court’s willingness to overturn its Abood decision and prohibit mandatory fair share fees. Our initial thinking was further bolstered yesterday by the tough questions posed by the Court to the union at oral argument. For instance, Justice Kennedy, who often serves as a swing vote, said:
“The union basically is making these teachers compelled riders for issues on which they strongly disagree. Many teachers think that they are devoted to the future of America, to the future of our young people, and that the union is equally devoted to that, but that the union is absolutely wrong in some of its positions. And agency fees require, as I understand it, correct me if I’m wrong, agency fees require that employees and teachers who disagree with those positions must nevertheless subsidize the union on these very points.”
Ohio law (R.C. 4117.09) permits fair share fees if the public employer and union have agreed in a collective bargaining agreement to require fair share fees as a condition of employment. A ruling in this case against the union will have huge implications for Ohio’s public sector unions. If the Court rules in the favor of the non-union teachers, it would declare that it is unconstitutional for a state to allow public sector unions to charge a mandatory fair share fee to non-members. This would likely mean that non-members could not be forced to pay a fair share fee if they do not agree to pay the fee, which would obviously have a negative impact on the revenue of unions and could lead to more resentment from union members against non-members (or so-called “free riders” as they are often referred to).
A decision in this case is expected later this summer. We will continue to monitor any developments and will update our clients as soon as the decision is announced.
Friedrichs v. California Teachers Association (Case No. 14-915).
UPDATE:
The U.S. Supreme Court announced on March 29th, 2016 that it was deadlocked with a 4-4 decision on a case brought before it to challenge the practice of public employer unions collecting fair share fees.
Initially filed in California by a group of teachers who decided not to join the union, the case served as a direct challenge to a well-recognized U.S. Supreme Court decision from 1977, Abood v. Detroit Board of Edn., which declared fair share fees legal.
Many interpreted the Supreme Court’s decision to hear the case as an indication that Abood may be overruled given the Court’s more conservative composition. However, the death of Antonin Scalia, who presumably would have provided the swing vote to overturn Abood, passed away before the decision was rendered.
A split decision in this case means that, at least for now, Abood remains good law and the practice of fair share fees will continue. This is a decisive victory for unions across the nation, although representatives from both sides have indicated that they may request a rehearing on the matter.
by Pamela Leist | Nov 3, 2015 | Board Policy & Representation, General, School Management
The Ohio Attorney General’s office recently issued an opinion that concluded a deputy sheriff who is employed in classified service may simultaneously serve as a member of a city or local school district board of education with a few limitations. The opinion was released on October 27th, 2015. The question of law turned on an interpretation of Ohio Revised Code §124.57(A), which states that an officer or employee in the classified service of the state or a public municipality is prohibited from 1) receiving any contribution for a political party or candidate for public office; 2) being an officer in any political party; or 3) taking part in politics other than to vote.
In analyzing the issue, the drafter of the opinion relied on a seven-question test to determine whether the two public positions were compatible. The test includes the following:
1. Is either of the positions considered classified employment within the terms of R.C. §124.57?
2. Do the empowering statutes of either position limit employment in another public position or the holding of another public office?
3. Is one position subordinate to, or in any way a check upon the other?
4. Is it physically possible for one person to discharge the duties of both positions?
5. Is there an impermissible conflict of interest between the two positions?
6. Are there local charter provisions, resolutions, or ordinances which are controlling?
7. Is there a federal, state, or local departmental regulation applicable?
The first question about whether a deputy sheriff serves as classified staff was answered in the affirmative, unless the deputy is assigned special duties which alter his or her status as a classified employee. In analyzing the second question, since a board of education member is elected in a nonpartisan election, and no other laws expressly prohibit a sheriff from serving as a board member or vice versa, the Attorney General opined that a deputy sheriff may lawfully run for the position subject to a few limitations discussed more fully below. And, in review of the third question, the opinion concluded that the deputy’s position in particular was not really subordinate to the board of education even when that deputy served as the district’s DARE officer, since the county sheriff and not the board generally determined specific duties and assignments. The opinion quickly dispensed with any concerns about whether an individual could physically perform the duties of both jobs under the fourth question, again affirming there was no issue as long as the deputy was able to serve on the board through use of leave or some other means when he/she was simultaneously assigned to active duty as a deputy.
However, when analyzing the fifth question in the test, the opinion concluded there was the potential for a number of conflicts of interest to arise when the individual carried out his or her duties as deputy and board member. First, there is a potential conflict of interest in preparation of and submission of budgets to the county commissioner, since the county sheriff and the board of education may compete for limited funds. This conflict could be avoided as long as the member did not appear before the county commissioner for budget matters on behalf of either organization. Second, the attorney general also recognized a potential conflict in the event both the sheriff and the board of education sought levies. However, the opinion recognized that the chance for conflict was low, and further could be avoided as long as the individual did not participate in any board member discussions, deliberations, and votes concerning the levy. Third, the opinion notes there is a potential conflict when the deputy is required to investigate an employee or member of the board of education, which can be avoided by reassigning the investigation to another deputy or another law enforcement agent. Fourth, there could be a conflict when contracts are negotiated between the board and the sheriff’s office. Again as long as the deputy refrains from any board deliberations about the contract, and as long as the deputy is not assigned to serve the board through the contract, the conflict is avoidable. Finally, the deputy may avoid any conflict with regard to allocation of trust fund grants such as through the D.A.R.E. program as long as the deputy is not a part of the internal control policy that determines how money is allocated.
The answers to the sixth and final questions in the test mentioned above were in the negative, since there were no applicable state or local regulations that applied in this case. Therefore, as long as the deputy avoided the potential conflicts mentioned above, the attorney general concluded that the positions of deputy sheriff and board of education member were compatible. In closing, however, the author of the opinion recognized that it may be impossible to consider all possible conflicts that could arise. Should the board member find that he or she must frequently refrain from deliberations, it is possible the member will eventually have a duty to resign from one position.
Click here to review the opinion in full.
Ohio Attorney General Opinion No. 2015-032.
by Giselle Spencer | Sep 25, 2015 | Board Policy & Representation, Construction & Real Estate, General, Labor and Employment, Legislation, School Finance, School Management, Special Education, Student Education and Discipline
As with most other provisions of the budget bill (Am. Sub. HB 64) some significant provisions impacting Ohio school districts go into effect on September 29, 2015, including the following:
- The maximum amount of a scholarship awarded under the Autism or Jon Peterson scholarship programs increases to $27,000 (up from $20,000).
- School districts must offer real property it intends to sell first to a “high performing community school,” then to other community and college preparatory boarding schools located in the district.
- ODE, in conjunction with an Ohio educational service center association and an Ohio gifted children’s association, must complete and submit a feasibility study for establishment of sixteen regional community schools for gifted children.
- The State Board must develop rules waiving any additional coursework requirements for renewal of an educator license for teachers who are consistently high performing.
- The duration of a pupil activity permit for individuals holding a valid educator license is changed from three (3) years to the same number of years as the educator license.
- The State Board of Education will develop a standards based framework for the evaluation of school counselors. Furthermore, all school districts must adopt a counselor evaluation policy by September 30, 2016, that conforms to the framework and will be implemented beginning in the 2016-2017 school year (will include annual evaluations with ratings of accomplished, skilled, developing, and ineffective just like OTES).
- The alternative teacher evaluation framework is revised to decrease SGM to 35%, maintain the performance rating at 50%, and authorize school districts to determine the appropriate measure or combination of measures for the remaining 15%.
- Exemplary community schools may now operate a preschool program for general education students.
- School districts may enroll under interdistrict open enrollment policies an adjacent or other district student who is a preschool child with a disability. ODE will deduct $4,000 from the resident district and pay that same amount to the enrolling district.
- School districts cannot appropriate monies to purchase an assessment developed by PARCC for use as the state elementary or secondary achievement assessments. Additionally testing for the 2015-2016 school year is reduced.
- Safe harbor provisions in effect during the 2014-2015 school year for state report cards are extended by two years.
- School districts may now enter into a contract with a health care provider for the provision of health care services for students.
- The new requirements for issuance of diplomas to home school students and students from non-chartered nonpublic schools are now in effect.
STEM schools can now enroll out-of-state students.
- Schools may install security doors or barricades as part of an emergency management plan.
- The filing date for financial disclosure statements with the Ohio Ethics Commission is May 15 (instead of April 15).
by Pamela Leist | Oct 30, 2014 | Board Policy & Representation, General, School Management
As districts transition to the new minimum school year reporting system, the Ohio Department of Education (“ODE”) recently released guidance about how it will allocate funding for students that attend school for less than a full day. In July of 2013, House Bill 59 became effective and mandated that the state funding formula for schools be based on annualized full- time enrollment (“FTE”). In order for a district to receive full per pupil funding, each student is expected to receive instruction for the entire day that the student’s grade level is scheduled to attend.
However, school districts typically have a number of students that do not attend for a full day, including students who participate in alternative school programs or who receive home instruction. Currently, districts are required to report in EMIS the percent of time that these students attend school as compared to the full day. In its guidance, ODE states that schools may experience a decrease in funding for part- time students as follows.
Alternative School Programs
Many students who are enrolled in alternative school programs are given the option to complete online modules independently. Often these students do not attend school for the entire day. According to ODE’s guidance, beginning this school year districts will be expected to provide an entire day of instruction for alternative school students unless they apply for and receive a waiver from ODE. ODE cites ORC §3313.533(B)(1), which states that an alternative school student must attend school or participate in another program named in the district’s plan for a period equal to the minimum school day mandated by state law. ODE states that a district may obtain a waiver if it can demonstrate that “the minimum hourly requirements are not workable for a particular student population.”
Districts that wish to apply for a waiver this school year are instructed to submit an email request to ODE at daystohours@education.ohio.gov.
Home Instruction
ORC §3323.12 requires a board of education to provide home instruction for children with disabilities who are unable to attend school. The statute further clarifies that for the purpose of determining formula ADM, five hours of home instruction is equivalent to five school days. Relying in part on this statute, school districts sometimes place students temporarily on home instruction, and provide five hours of instruction each week to ensure full funding. However, ODE notes that unless an IEP expressly requires home instruction, students who receive home instruction for less than a full day, including special education students, must be reported in EMIS as attending part-time. These students may trigger a percentage reduction in funding as a result.
Senior Late Arrival and Early Release
For years, school districts have rewarded seniors who have completed most of their graduation requirements early with the option to arrive late or leave early from school each day. Beginning this summer, ODE indicated to districts that these students must be reported as attending school part-time. ODE recognized in the new guidance that districts may lose funding for the percentage of time the seniors are out of school because of late arrival or early release.
However, ODE also indicates that districts may apply for a waiver from the state superintendent that would allow them to count certain seniors who miss one period of class as fully enrolled, but only if those students take sufficiently rigorous courses. The guidance includes several examples of what would be considered “rigorous” for the waiver, such as when a student 1) takes two or more AP classes; 2) takes two courses through a dual enrollment program, or 3) completes a certain number of hours in an internship or apprenticeship program. A district that wishes to request this waiver/exemption should send the request along with a draft policy to daystohours@education.ohio.gov.
Work Release Programs
For work release, a district may count a student’s work time as instruction time if he/she participates in an official work study program or an approved educational option. However, if a student has been released for employment due to financial hardship, a district has two options:
1) The district may report the student as part-time and include only the hours the student actually attends class (this is required if the absence is for more than ten days); or
2) Under certain circumstances, the district can count the absence as an excused absence if in accordance with board policy and approved by the district’s superintendent as an emergency or some other circumstance considered “good and sufficient cause” for an absence from school. Under this option, the absence will not impact the school’s funding but will affect the attendance rate.
Zero Periods
The last exemption for FTE that was included in the guidance involves zero periods. A zero period occurs when a district offers an additional period of instruction that is optional for students. With regard to the zero period exception, ODE will permit a district to report a student as attending full-time if he/she attends a district-created optional instruction period/zero period but is released from a period later in the day.
If you would like to view ODE’s guidance on Annualized Full- Time Enrollment, click here.
LEGAL REFS: ORC 3313.533, 3317.03, 3321.04, 3323.12
by Pamela Leist | Jul 31, 2014 | Labor and Employment, School Management
As July comes to a close, schools across Ohio have begun to gear up for another school year. Yet just when you think you have put the chaos of staffing buildings and assigning students behind you, inevitably a teacher who would be very hard to replace at this juncture approaches the district and provides notice that he or she plans to resign to accept a position elsewhere. The question becomes whether the district must release the teacher from his contract. Before you agree to such a proposal, keep the following in mind.
Ohio law places strict limits on when a teacher may terminate a contract of employment absent consent from the board of education. Under ORC §3319.15, a teacher must provide a district with written notice that he or she wishes to terminate an employment contract each summer by July 10th. The law prohibits teachers from terminating a contract beyond that date, or at any point during the school year. The law also states a teacher must provide at least five days’ notice to the board before voluntarily terminating any agreement.
Interestingly enough, a board of education cannot seek an injunction in court to force a teacher to return to work if he or she attempts to resign beyond the narrow statutory window, or simply refuses to show up for work after the July 10th deadline. Such an injunction would violate the state and federal Constitutions’ prohibitions against involuntary servitude (U.S. Constitution, Amendment XIII, and Ohio Const. Art. I).
However, a district is not without some form of recourse. A school district can challenge violations of ORC §3319.15 through the Department of Education. The State Board of Education adopted the Licensure Code of Professional Conduct for Ohio Educators in 2008. Under the Code of Conduct, the State Board of Education may terminate or suspend a teacher’s license for abandonment of a contractual agreement without consent from the employing Board of Education. A teacher’s failure to comply with the law could thereafter have a significant impact on the individual’s future teaching career.
Questions? Contact your district’s legal counsel for more information.
