‘Distressed’ schools lost funding

No wonder Gary and Muncie community schools are distressed. Both Indiana school districts have had their budgets cut dramatically over the past decade. It’s not surprising they’ve struggled to pay the bills.

Muncie’s general fund, the part of the budget that pays educator salaries and most operating expenses, was reduced from $55.4 million to $42.5 million over the past six years, according to figures from the Indiana Department of Local Government Finance. That’s a 23 percent cut.

Gary’s decline has been even more stark. Its general fund budget dropped by more than half, from $104.4 million in 2011 to $50.1 million in 2017.

The state declared last year that the districts were financially distressed; oversight of the schools has been turned over to the state’s Distressed United Appeals Board, and they are being run by emergency managers. This year, legislation making its way through the Indiana House would put Ball State University in charge of Muncie Schools. In both cities, elected school boards are being marginalized.

A big reason for the loss of funding is that the districts have been bleeding students as residents have left cities and moved their children out of urban schools. Just from 2011 to 2017, Muncie lost about a quarter of its enrollment and Gary lost about half.

Gary is a special case. Once Indiana’s second-largest city with a peak population of nearly 180,000 people in 1960, it is now the ninth-largest with only about 80,000 residents. Blame the collapse of the steel industry.

Naturally, schools with fewer students should spend less money. But making dramatic spending cuts isn’t always quick and easy. It means closing schools, eliminating teachers and staff, and taking other steps that are likely to be unpopular with the public. They won’t always happen overnight.

But losing students isn’t the only reason Muncie and Gary lost funding. The legislature has also adjusted school funding to direct less money to urban schools and more to growing suburban schools. Gary Community Schools get over 20 percent less, per pupil, now than they did in 2011. Muncie also took a hit in per-pupil funding and only recently returned to its 2011 levels.

The loss of students has been exacerbated by state policy: the rise of charter schools and vouchers and the growth of district-to-district transfers since the state took charge of school funding in 2011. A story last fall in the Indianapolis Star explained the challenges facing many school districts.

In Gary, only 39 percent of school-age children who live in the district attend Gary Community Schools. Fifty-six percent attend charter schools or transfer to neighboring public school districts, and 5 percent attend private schools with help from state-funded vouchers, according to a state report. (The figures don’t include students who attend private schools without help from vouchers).

Gary’s public schools are struggling academically, based on Indiana’s test-based accountability system, so it’s not surprising students transfer. But so are many charter schools and private schools. Over 3,000 Gary students attend charter schools that received grades of D or F from the state.

In Muncie, 68 percent of children in the district attend Muncie Community Schools. Of those who don’t, a majority attend nearby public schools – not charter schools or voucher schools. Over 1,000 Muncie students transfer to neighboring Delaware, Wes-Del, Liberty-Perry, Cowan and Yorktown schools.

It’s quite possible that, as some legislators allege, Muncie and Gary schools have been mismanaged. That’s hard to judge from a distance. But there’s no doubt those school districts have faced challenges that the legislature, in recent years, has made worse.