1)  127th Ohio General Assembly:  Governor Strickland signed into law Am. Sub. HB 119
(Dolan), Ohio's FY08 and FY09 operating budget, on June 30, 2007 after vetoing thirty-eight
items.  (For a list of vetoed items see #3 below.)  The $52.3 billion state budget was
approved overwhelmingly by the House and Senate on June 27, 2007 after both chambers agreed to
provisions worked out by a conference committee led by Representative Dolan.  The House and
Senate leadership now must decide whether or not to attempt an override of the vetoes.  A 3/5th
vote in both chambers is needed for lawmakers to override the vetoes, and the House must initiate
the action.  A 3/5th vote in the House would require 60 votes, and there are currently 54
Republicans and 45 Democrats in the Ohio House. "If needed" sessions are scheduled by the House
and Senate on July 10th and 11th, and then lawmakers are not scheduled to return to Columbus
until September 4, 2007.

In addition to the state's budget bill, lawmakers were very busy last week completing work on
several other education related bills.  The House and Senate concurred on June 26, 2007 on SB 143
(Padgett) - Speech Language Pathology Interns, which establishes a limited student permit
category for speech language pathology interns. Governor Strickland signed the bill into law on
June 30, 2007.  The House also approved on June 26, 2007 HB 190 (Hite), which allows school
districts more flexibility in scheduling elementary achievement test dates for special
needs pupils, and HB142 (Batchelder).  This bill increases the penalty for inducing panic at a
school or institution of higher education to a felony of the second degree.  It was also amended
to permit school districts to make up excess calamity days by adding extra hours to the
remaining days in the school year.

2)  Final Touches to Am. Sub. HB 119 (Dolan):
Ohio's FY08 -09 state budget was sent to Governor Strickland after the Ohio House and Senate
concurred with a conference committee report that resolved differences between the different
versions of the bill and a $167 million deficit that had been identified earlier this month.
Conference Committee managers eventually presented to both chambers the 1865 page budget
with $16.9 million more than needed for a balanced budget.

Many of the provisions included in Governor Strickland's executive budget proposal were
retained by the Republican led House and Senate, including the components of the state's formula
for distributing state funds to schools; securitization of the tobacco settlement funds;
expansion of the Homestead Exemption; the Early Childhood Initiative; extended health care
coverage for uninsured children; increased funding for higher education; and more.

The House and Senate also added their own touches to the budget bill, such as a new pilot voucher
program for children with disabilities (vetoed by Governor Strickland); restoration of the EdChoice
voucher program; changes in a moratorium for opening new community schools; support for new
Science, Technology, Engineering and Mathematics (STEM) schools for grades 6-12; and changes in
the campaign finance law (126-HB694) approved last year.

Some funding levels in the Senate version of the bill were also changed by the conference
committee.  For example, the conference committee added funding to line items for Special Education
Enhancements and Alternative Education Programs, and decreased funding for Literacy Improvement
Professional Development and Student Assessment. Budget totals from selected state agencies and
departments are included below, but may be subject to change as a result of certain vetoes
of earmarks by Governor Strickland.

Main Operating Budget Appropriations for Ohio
Total for FY07 $26.082 billion
Total $25.4 billion in FY08 and $26.9 billion in
FY09 for a total of $52.3 billion for the biennium
Total All Fund Groups $52,624,233,164 in FY08 and $54,775,629,368 in FY09

Ohio Arts Council
Total for FY07 $11,238,161
General Revenue Funding - $12,488,161 in FY08 and $12,488,161 in FY09
Total Funding All Groups - $13,659,527 in FY08 and $13,659,527 in FY09

Department of Mental Health
Total for FY07 $573,705,486
Total Funding All Groups - $1.15 billion in FY08 and $1.19 in FY09

Department of Mental Retardation and Developmental Disabilities
Total for FY07 $354,795,421
Total Funding All Groups - $1.17 billion in FY08 and $1.25 billion in FY09

Department of Job and Family Services
Total for FY07 $10,880,877,212
General Revenue Funding - $9.76 billion in FY08 and $10.59 billion in FY09
Total Funding All Groups - $16.7 billion in FY08 and $17.69 billion in FY09

Ohio Board of Regents
Total for FY07 $2,550,632,969
General Revenue Funding - $2.77 billion in FY08 and $2.86 billion in FY09
Total Funding All Groups - $2.79 billion in FY08 and $2.88 billion in FY09

Department of Rehabilitation and Correction
Total for FY07 $1,514,281,251
General Revenue Funding - $1.53 in FY08 and $1.58 in FY09
Total Funding All Groups - $1.75 billion in FY08 and $1.81 billion in FY09

Ohio School Facilities
Total for FY07 $256,514,700
General Revenue Funding - $307.4 million in FY08 and $339.6 million in FY09
Total Funding All Groups - $315.2 million in FY08 and $347.4 million in FY09

Ohio Department of Education
Total for FY07 $7,658,577,679
Total General Revenue Fund - $7.748 billion in FY08 and $8.092 billion in FY09  (Biennium $15.8
billion)
Total Federal Special Revenue Fund Group - $1.66 billion in FY08 and $1.57 billion in FY09
Total All Fund Groups - $10.8 billion in FY08 and
$11.2 billion in FY09 (Biennium $22 billion)
Selected Line Items for the Ohio Department of Education
-Foundation Funding (GRF-200-550) $5.761 billion in FY08 and $6.034 in FY09
-Pupil Transportation (GRF-200-502) $424.78 million in FY08 and $429 million in FY09
-Auxiliary Services for chartered nonpublic schools (GRF-200-511) $131.7 million in FY08 and
$135.69 million in FY09
-Gifted (GRF -200- 521) $47.608 million in FY08 and $48 million in FY09
-Ohio Core Support (GRF-200-536) $7.7 million in FY08 and $15.1 million in FY09
-Special Education Enhancements (GRF-200- 540) $138.8 million in FY08 and $140 million in FY09
-School Improvement Initiatives (GRF-200-431) $21.5 million in FY08 and $21.9 million in FY09
-Career Technical Education Enhancements (GRF-200-545) $9.29 million in FY08 and $9.37
million in FY09
-Property Tax Allocation (GRF-200-901) $794.5 million in FY08 and $850.8 million in FY09
-Tangible Tax Exemption (GRF-200-906) $21.4 million in FY08 and $10.7 million in FY09
-Early Childhood Education (GRF-200-402) $31 million in FY08 and $36.5 million in FY09
-STEM Initiatives (GRF-200-457) $10 million in FY08 and $10 million in FY09
-School District Property Tax Replacement - Business (047-200-909) $611.5 million in FY08 and
$763.3 million in FY09
-School District Property Tax Replacement - Utility (053-200-900) $91 million in FY08 and $91
million in FY09

3)  Governor Strickland Vetoes 38 Items:  Before signing Am. Sub. HB 119 (Dolan) into law on June
30, 2007 Governor Strickland issued a statement that included 38 vetoed items in five areas:
Health and Human Services; Education; Environment and Public Safety; Technology; and Governance,
Management, and Administration.  According to Governor Strickland's veto message,

"This budget represents a historic consensus. But long after our agreement is forgotten, the people
of Ohio will be benefiting from what we agreed upon.

This budget makes a commitment to education from pre-schools to universities. Instead of spiraling
tuition costs, we will have a two year tuition freeze. We make a substantial investment in our
primary and secondary schools. And as we strengthen our schools we will also reduce the
property tax burden on every senior and disabled homeowner through an expansion of the Homestead
Property Tax Exemption.

This budget makes a commitment to provide health care coverage to the uninsured children of Ohio.

This budget makes a commitment to investing in growth and development, both by expanding the
skills and education of our people, and by identifying and supporting emerging economic
opportunities.

The following sections detail 38 line item vetoes I have issued among five issue areas. These are
areas of honest disagreement. But in a budget document containing 1865 pages, and tens of
thousands of lines of text, I would say our differences are remarkably small in the face of
our larger common purpose."

Summary of Vetoed Items

Health Services
Item 1 - Provisions regarding the federally required Medical Care Advisory Council
Item 2 - Certain earmarks for Healthy Ohio and the prescriptive language of the Healthy Ohio
Assessment
Item 3 - Provisions that constrain the School Employees Health Care Board's duties
Item 4 - Provisions regarding the establishment of the Behavioral Health Pilot program
Item 5 - The Annual Review of the best practices of the School Employees Health Care Board, which
are outside the scope of the Ohio Department of Insurance and lack resources to support this
provision
Item 6 - Limitations on Restrictions of Coverage of Mental Health Drugs
Item 7 - Federal Abstinence Earmark
Item 8 - Provision that creates a General Fund appropriation for Abstinence Education and
Adoption Education.  Focusing "exclusively on abstinence is contrary to a comprehensive
educational approach."

Education
Item 9 - Ohio Choice Grant - Restrictions that limit the administration's right to transfer any
unused or lapsed funds from other state-funded financial aid or scholarship programs, including
the Ohio Choice Grant, to the Ohio College Opportunity Grant Program.
Item 10 - Distribution of the Innovation Incentive Program through a formula rather than
on a competitive basis.
Item  11 - Provisions regarding the Purchasing Consortium, which would prevent a statewide,
all-inclusive approach to purchasing collaboration and perpetuate inefficiencies and
comes at the expense of taxpayers.
Item 12 - Special Education Scholarship Pilot Program
"The administration believes that funding private schools with public tax dollars deprives the
state and its taxpayers of proper oversight and accountability of these programs. Further, by
draining funds that would otherwise be used to support public schools, such a program serves to
harm the vast majority of students, including disabled students, who attend public schools. The
administration is committed to working with the Department of Education and parents to review
alternative policies to best meet the needs of all children with disabilities. Indeed, the
administration has increased funding for special education by more than 8 percent in each year of
the biennium."
Item 13 - Disputed Enrollment between Community School and District
"This language creates an unnecessary burden for local school districts in instances where school
districts and community schools dispute enrollment figures and where the two parties are
not able to resolve the differences. The Department of Education has worked with affected
parties over the past several months to develop a set of business practices to address the concerns
related to this item. The business practices developed by the Department will more fairly
apply to both community schools and school districts. The creation of new statutory
provisions is unnecessary and would limit agency discretion to address the needs of stakeholders
and resolve disagreements."
Item 14 - Ranking of Expedited Local Partnership Program Districts
"This language would result in moving Expedited Local Partnership Program (ELPP) districts higher
on the equity list, and therefore move other districts lower relative to the ELPP districts.
This would increase the local share of education costs of some, potentially many, districts.
Additionally, this would increase the amounts and millages necessary for school district bond
issues. This violates the premise of which Ohio school facilities commission funds are allocated."
Item 15 - Literacy Improvement Professional
Development (Reading Recovery Training Network)
"This item would provide $900,000 in each fiscal year to fund the Reading Recovery Training
Network, provide pilot grants to other districts to implement other reading improvement programs,
and conduct an evaluation of the impact and effectiveness of the Reading Recovery program and
other reading improvement programs. Reading Recovery is a short term early literacy
intervention program. The program accelerates the reading ability of students that have difficulty
with reading. The program utilizes job embedded peer coaches and intensive literacy training for
the Reading Recovery teachers. The provisions in this item would divert valuable funds from the
Reading Recovery program to unproven, non-research based pilot projects."

Environment and Public Safety
Item 16 - Dredging the Grand River at the Village of Fairport Harbor
Item 17 - The impact of the Areawide Planning Agencies on the work of the Division of Surface
Water and 22 counties not covered by an areawide planning agency
Item 18 - Changes in the Fireworks Law that are not in the public safety
Item 19 - E-check program that employs only onboard diagnostic tests that are ineffective in
vehicles manufactured prior to 1996

Technology
Item 20 - eTech Commission Membership and Duties
(inadvertently left out of the enrolled bill), that would place an undue burden on the
Commission in fulfilling its duties, would inappropriately limit the decision making
authority of the commission, and unnecessarily limit the governor's ability to appoint the
Commission's chair
Item 21 - Limitations on NextGen/Third Frontier earmark
Item 22 - Digital/HDTV Earmark of $1 million to public broadcast stations to purchase and install
digital high definition conversion

Governance, Management, and Administration
Item 23 - Setting the Maximum Lottery Ticket Price of $20
Item 24 - Executive Order required for Sunday drawings
Item 25 - Controlling Board Notification GRF Subsidy Encumbrances
"In a typical fiscal year, more than 200 encumbrances occur that would be subject to
additional reporting requirements under this provision. This language imposes an undue burden
on the Executive Branch by establishing excessive red tape and duplicative reporting requirements
that could interfere with the flexibility of the administration to manage state finances on a
daily basis."
Item 26 -  5% Debt Service Limitation Calculation on obligations that are "avoided" (not issued) as
a result of the tobacco securitization authorized in ORC 183.51.
Item 27 - Restrictions that hamper the collection of Ohio sales tax from Nonresident Motor Vehicle
Sales
Item 28 - Transfer from Automated Title Processing Fund, which is prohibited by The Ohio
Constitution, Article XII, ×5a. Item 29 - Cuyahoga County Special Services District
"This provision allows multiple school districts from a county with 1.2 million people to form a
Special Services District to serve special education students. This provision would create
one special tax district in the state and empower the district to tax and issue debt. The impact of
granting the tax and debt issuance authority is unknown."
Item 30 -Managed Care Reimbursement Rates
Item 31 - Risk adjusted managed care rates
Item 32 - Controlling Board approval of transfers from the Medicaid Reserve Fund
Item 33 - Unfunded requirement for Electronic Submission and Maintenance of Applications by
county boards.
Item 34 - Electronic Submission of Medicaid Applications
Item 35 - Hospital Performance Data - insufficient funds.
Item 36 - Medicaid Provider Audits - duplicative of current audits.
Item 37 - Auditor of State Performance Audit of the Department of Alcohol and Drug Addiction
Services - duplicative of internal review process
Item 38 - Auditor of State Performance Audit of the Department of Mental Health - duplicative of
internal review process

4)  More on Ohio's State Budget:  According to a press release issued on June 29, 2007 by Governor
Strickland's office, Ohio's FY08 and FY09 budget "delivers" to Ohio families in the areas of
healthcare access, tax relief, support for local schools, access to affordable higher education,
and support for job creation.  The following details of the budget bill were highlighted in
the press release:

Healthcare Access for All Ohio's Children
The State Children's Health Insurance Program will provide children in families up to 300
percent of the federal poverty level access to healthcare, and families at incomes above 300
percent of poverty will be able to buy health coverage from the state for children with special
needs that prevent them from qualifying for private insurance.

Tax Relief for Approximately One in Four Ohio Homeowners
The expansion of the Homestead Tax Exemption for Ohio's senior citizens and disabled homeowners
will provide a tax cut to approximately one in four Ohio homeowners.

Record Investment in Public Schools
The state percentage of support for local schools will increase to nearly 54 percent when all
sources of state support are considered.

Historic Levels of Funding for Ohio's Public Colleges and Universities
Tuition for students attending Ohio's public colleges and universities will be frozen for two
years, and eligible students will receive increases in the Ohio College Opportunity Grants.
The newly created Accelerate Ohio Program will help adult workers pursue higher education by
providing college credit for appropriate work-related certificates and training programs.
Adult career technical education programs will be transferred from the Ohio Department of Education
to the Ohio Board of Regents, creating a seamless system of lifelong learning and higher education
opportunities for Ohio's workers.  A new Ohio Innovation Partnership will include two new
programs:   The Choose Ohio First Scholarship, a $100 million scholarship program, to be leveraged
by at least $100 million in private dollars or other support, to encourage Ohio students to
study science, technology, engineering or mathematics, or become teachers in those fields;
and The Ohio Research Scholars program, a $50 million effort to recruit world-class scholars
tied to job creation in Ohio's regional economies.

Programs to prepare Ohio's Young People for the Jobs of the Future
Five new STEM (Science, Technology, Engineering and Mathematics) schools for grades 6-12 will
also be created, and existing STEM Programs of Excellence will be strengthened, allowing charter
schools and school districts to enhance their current programs.

5)  More on Ohio's State Budget:  The Ohio
Republican Party issued a statement on June 27, 2007 phrasing the state's FY08 and FY09 budget
for focusing on the "....state's economic future by continuing the phase-in of a 21 percent income
tax cut and the overhaul of state business taxes to make Ohio more competitive for attracting jobs
and makes strategic investments in higher education."

"The budget also expands health care services for those most in need, provides more educational
opportunities for primary and secondary students and enacts the largest property tax cut in Ohio
history for seniors and disabled Ohioans."

"All of these priorities were funded while meeting the constitutional requirement of a
balanced budget and a commitment to restrained government spending."

The statement also highlights efforts in the budget bill that will improve math and science
education, reduce the cost of a college education, and efforts to revitalize Ohio's
economy and create new job opportunities for families.  Lawmakers increased funding for higher
education by more than $333 million over the next two years, including the $100 million Choose Ohio
First Scholarship program, and the newly-created James A. Rhodes Scholarship for students
attending Ohio's accredited two-year community and technical colleges.  The General Assembly
also invested $50 million into the new Ohio Research Scholars Program, to help state colleges
and universities attract highly-productive research scientists to Ohio.

The new STEM initiative will expand opportunities for students to prepare for the future.  The
budget includes $20 million in K-12 STEM programs, including funding support for programs
of excellence in existing public schools and funds to create new STEM-focused schools
throughout Ohio.

The budget also expands school choice options by retaining charter schools and the Educational
Choice Scholarship in Ohio, and the new Special Education Scholarship Pilot Program, an
educational voucher program designed specifically for special education students.

Quoting from the statement, "Perhaps there is no better endorsement of school choice in Ohio than
for the Ohio House and Senate to vote near-unanimously in support of a state budget
that continues the school choice programs that have provided essential educational options for
nearly 100,000 Ohio children," said Gene Schuster, president of the board for My School,
My Choice."

Support for early childhood education in the budget will put children first and ensure that
"Ohio's youngest citizens have access to education and health care services they need to
grow into productive adults".

HB 119 also includes the largest property tax cut in Ohio history - allowing one in every four Ohio
homeowners to take advantage of the Ohio homestead exemption.  Approximately 775,000
seniors will pay no tax on the first $25,000 of their home's values.

According to the statement, "In all, state legislators from both chambers of the Ohio
Legislature worked over the course of the past months to craft a bill that recognizes the needs
of all Ohioans - from the youngest child to the eldest senior - providing for those in need and
preparing for a strong economic future."

The full statement is available at
http://www.ohiogop.org/News/Read.aspx?ID=1517

6) U.S. Supreme Court Rules on School Assignment Cases:  The U. S. Supreme Court issued on June
28, 2007 a 5-4 decision that limits the ability of school districts to assign students to keep schools integrated through "controlled school choice programs".  (Parents Involved in Community
Schools vs The Seattle School District) This is the first major decision issued on school
desegregation over the past twelve years.  The plaintiffs in the cases, Meredith v. Jefferson
County Board of Education and Parents Involved in Community Schools v. Seattle School District,
argued that there is no compelling government interest to treat children differently because of
their race.  Parents from the Jefferson County School District in Kentucky and the Seattle,
Washington School District argued that their children were denied access to a school of their
choice as a result of their districts' "controlled school choice program", which
considered race as a factor in student placement. The defendants argued that there is a valid
reason to keep integrated schools, because research shows that minority students perform
better in integrated schools.  The Bush administration supported the plaintiffs in these
cases, saying that "controlled school choice programs", that use race as a consideration in
student assignment, violate the Fourteenth Amendment.

The Justices ruled in a close 5 to 4 decision that even though the goal of integrated education
was a compelling interest, the districts had failed to justify their controlled choice program
for student placement.  Writing for the majority was Chief Justice Roberts.

According to the Civil Rights Project, Gary Orfield co-director, "This decision is another
step backward following the Court's three decisions limiting mandatory desegregation in the
l990's.  In a country which now has more than 40% nonwhite students and millions in segregated
schools that have been proven to be unequal in the statistics produced by the Administration's
own No Child Left Behind Act, the Court has taken the extraordinary step of rejecting modest
efforts that have produced desegregated education in two districts that have *voluntarily*
implemented such policies."

For more information about the decision please visit http://www.supremecourtus.gov/opinions/06pdf/05-908.pdfhttp://www.civilrightsproject.ucla.edu/policy/court/voltint.php): Joint Statement from Nine University-Based Civil Rights Centers:
http://www.civilrightsproject.ucla.edu/policy/court/voltint_joint_full_statement.php

7) Report Finds McKay Scholarship Program Wanting:  As lawmakers in several states,
including Ohio, are expanding voucher programs, a new report released on June 26, 2007 by the
Education Sector, "Information Underload: Florida's Flawed Special-Ed Voucher Program" by
Sara Mead, details the problems with Florida's McKay Scholarship Program, which has been
promoted by proponents of vouchers as a model program.  According to this report the McKay
Scholarships for Students with Disabilities Program provides parents a voucher to choose
alternative education options for their children, including the option to attend private schools.
The law was approved by Florida's legislature in 1999 and approximately 17,900 students (4 percent
of students with disabilities in Florida) currently participate in the program, costing the
state $108 million.  However, the lack of accountability and data on the effectiveness of
the program provide tax payers with no information about how public dollars are actually
being spent, and what outcomes are being achieved.

Sara Mead writes that, "Students with disabilities have long had the right, under the
federal Individuals with Disabilities Education Act (IDEA), to attend private schools at public
expense if the public schools in their community are unable to provide them with appropriate
special educational services. But less than 1 percent of students with disabilities have such
private placements, in part because these placements can be costly, complicated, and
time-consuming to obtain under the existing law."

Students participating in the McKay program are not required to take the annual state tests
administered by public schools and are not required to report information on student
outcomes, in contrast to the national effort through the No Child Left Behind Act to document
the progress of ALL students.

The lack of data makes it "....virtually impossible to say whether special-needs children
using McKay vouchers to attend private schools are faring better, worse, or about the same as
they had in their old public schools. It is also difficult to determine whether the McKay program
is improving existing special-education services, since, unlike public schools, McKay schools are
not required to provide these services at all."

In addition, "....taxpayers have almost no knowledge of how their money is being spent, and
neither taxpayers nor parents have access to solid information about the performance of
different McKay schools.  For parents, the stakes are very high, as they are required to give up
their due process rights under IDEA if they choose to participate in the McKay program.
Parents, taxpayers, and the state's special-needs children deserve better."

This research was funded by The Annie E. Casey
Foundation.  The full report is available at
http://www.educationsector.org/research/research_show.htm?doc_id=506895