School funding flexibility: One step forward, one step back

It turns out that Indiana’s new school funding flexibility law is providing only half a loaf for the Monroe County Community School Corp. Half a loaf may be better than none, but it’s not nearly enough.

And increasing MCCSC payments for employee insurance costs are taking a big bite out of that half-loaf.

Last weekend, I posted a story here that said the MCCSC should be able to transfer 10 percent of the local property tax levy from its capital projects fund to the general fund, to help cover teacher salaries and other personnel expenses. I was wrong.

The contract approved last week by the school board and the Monroe County Education Association met two of the criteria for a 10-percent capital-projects transfer: It froze teacher salaries at their 2009-10 level and capped “increment” raises at 2 percent.

But it didn’t meet the third requirement of the funding flexibility measure that the state legislature passed this spring: that the school corporation could not increase its proportional contribution to employee insurance premiums.

I spoke Monday with Tim Thrasher, the MCCSC comptroller, who pointed out that the new teachers’ contract calls for the MCCSC to contribute 70 percent of the cost of employee health insurance. Under the old contract, the MCCSC paid only about 55 percent of the premium cost for some of its family coverage plans, and just a little over 60 percent for some individual plans, he said.

The funding flexibility law allows all school corporations to transfer 5 percent of their capital projects fund levy to the general fund, without meeting any conditions. But the more generous option – up to 10 percent of the capital projects fund – was reserved for districts that crack down on personnel spending.

For the MCCSC, the decision to help employees with rising insurance costs makes the district ineligible.

Thrasher said the MCCSC does plan to transfer $532,000, or 5 percent of the capital projects fund revenue, to the general fund. It will also save an estimated $350,000 by capping increment raises at 2 percent a year. Under the 2009-10 teachers’ contract, some increment raises were as high as 6 percent.

The Bloomington Herald-Times reported that $750,000 in savings will come from the controversial MCCSC-MCEA agreement to stop paying coaches and other extracurricular and co-curricular positions. (More on that later).

Thrasher said the savings will help cover the increased insurance costs and the cost of retaining elementary and middle-school librarians – positions that had been slated for elimination until last week. And some may be needed, he said, if insurance expenses go up again in 2011.

Premiums increased by 20 percent in January 2010, and school employees were stuck with the cost.

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