Bill proposes new revenue stream for Montgomery County Schools

School districts in Montgomery County could become the first in Ohio to explore new revenue streams — beyond relying on taxes, state and federal aid and donations — under a new bill that would allow them to earn profits on its facilities, services and merchandise.

State Rep. Mike Henne, R-Clayton, introduced the bill Friday that would amend current legislation and allow Montgomery County’s 16 school districts to pilot the new program. The bill would allow districts to earn profits off a variety of services, including rentals of classes to selling school merchandise, such as T-shirts, hats and sweatshirts, above costs.

“It’s not about redoing all the school funding formula,” Henne said. “It’s about giving (schools) the ability to make some additional money.”

For the next two years, operating funds for Ohio schools have been cut nearly $780 million in state funding.

As of now, a new approach to paying for Ohio’s public schools will not be complete until 2013, leaving school districts across the state to grapple with their budgets in the absence of a predictable school funding formula.

Henne said the pilot plan was suggested by Vandalia-Butler City Schools and its treasurer, Dan Schall.

“Dan thinks he can fill the gaps (with this bill),” he said. “It’s how creative and how much the school system decides to use it.

“Everything they do has to be within the mission of the school system. They can’t create something like how to make a widget better or open a restaurant. Maybe they come up with an online program how to learn French, whatever it is.”

Vandalia-Butler’s current operating budget is $35 million. Schall said if the bill passes, he projects his district could eventually generate 1 percent of new revenue of its total budget.

“Dan’s one of the more progressively thinking treasurers out there,” Henne said. “He’s always trying to think outside the box.”

Under the current law, only booster clubs — such as ones for marching bands and athletic teams — and not school districts can make profits off merchandise, concessions and other activities. Henne said the updated bill would allow school districts to charge beyond what it costs them to operate a particular venue, class or service.

Schall said passage of the bill creates “an additional revenue stream for us. (Currently) we can’t sell anything. We can’t rent for profit. That doesn’t help the taxpayers.

“If we can rent that facility or sell T-shirts or give art classes, we can get a revenue stream that won’t be taxes.”

Schall said the amended bill “is something, down the road, that could replace as much as 1 percent of our budget. It’s a first step in identifying new revenue streams.”

Henne said the bill will allow schools to “sell their brand, rent space (for a profit), sell educational services and sell technology.’

He noted how Vandalia-Butler has a new building, with many amenities that could be used by the public, including a nice home economics room. “Maybe they want to teach creative cooking classes?” he added.

Henne said his bill would also allow school systems to develop technology that they could sell to other districts.

“Vandalia has a payroll system they have created,” Henne said. “Employees love it. They would like to market it to other school districts.”

While the bill is in its early stages, if its passes it would be to allow Montgomery County school districts to implement it within 90 days of passage.