Indiana’s $320 million mistake is an opportunity

Indiana Democrats were absolutely right to call for an investigation of how the Daniels administration managed to misplace $320 million in tax revenue. As the Indianapolis Star editorialized, without a reliable audit, how do we know that other funding streams are being accounted for properly? Republicans on the State Budget Committee didn’t seem too concerned, though — they rejected the idea on a party-line vote.

But going forward, the situation should be about more than finger-pointing. A report by Tom Lobianco of the Associated Press makes clear that this isn’t just the “bank error in your favor” that Gov. Mitch Daniels joked about. It’s a gift that keeps giving, to the tune of $120 million a year that the state wasn’t expecting.

What should we do with the money? Republicans seem enamored of two options: padding the state’s bank account or triggering automatic tax refunds that kick in if state budget reserves top 10 percent of expenditures – maybe $50 per taxpayer.

Here’s another idea: Let’s at least consider using the money to establish a state-funded pre-kindergarten program, something that 40 other states already have.

Democrats were pushing this idea before the accounting error was revealed. House Democrats, in their “Helping Hoosiers Now” agenda, called for a voucher program to help low-income Hoosiers pay for pre-school. Senate Democrats proposed creating an Office of Child Development and Early Learning and providing preschool grants to middle-income families.

These are modest proposals, but Democrats are minorities in both houses; they can’t do anything without Republican support. And early childhood education really ought to be a bipartisan cause.

The Center for Evaluation and Education Policy at Indiana University addressed the topic in a policy brief several years ago, pointing out that the Indiana Education Roundtable recognized the importance of pre-kindergarten with its P-16 Plan for Improving Student Achievement, adopted in 2003.

The CEEP policy brief estimated the cost of a high-quality, half-day pre-kindergarten program for children from low-income Indiana families at between $68.2 million and $96.1 million per year. Even assuming that costs – and the number of low-income Hoosier families – have increased since the brief was published in 2006, that’s still in the range of the state’s accounting windfall.

Tony Bennett, the Republican Superintendent of Public Instruction, was asked about pre-kindergarten at a speaking engagement two months ago in Bloomington. He replied that, yes, it’s something the state should pursue, but there’s just not enough money available to do it.

That may have been true then. It’s not true now. If Bennett really believes in “putting students first,” he should lead on this issue.

Recommended reading

Helene F. Ladd and Edward B. Fiske argue in a New York Times op-ed that class matters in education, and we ought to admit it and deal with it. “Since they can’t take on poverty itself, education policy makers should try to provide poor students with the social support and experiences that middle-class students enjoy as a matter of course,” they write.

The Times also had an extensive article about the growth of online charter schools as a for-profit business, focusing on the biggest provider, K12 Inc. Kyle Stokes of NPR’s StateImpact Indiana localized the story, reporting that Indiana gave two Fs and a D this year to K12’s Hoosier Academies online charter schools.

The Miami Herald is in the midst of a three-part series on charter school operators, focusing on the state’s lack of oversight, academic problems and cozy relationships between education entrepreneurs and the state’s politicians.