Hardly anyone wins in the 2019-21 budget and school funding formula approved by the Indiana House, but some schools lose more than others. And high-poverty school districts continue to fall behind.
Legislators have boasted that the budget increases K-12 funding by over 2 percent each of the next two years. But allowing for inflation and increasing enrollment, that’s effectively no increase at all.
As Northwest Allen County Superintendent Chris Himsel tells the Fort Wayne Journal-Gazette, the key figure is funding per student. Statewide, that will increase by just 1.5 percent in fiscal 2020 and 1.7 percent in fiscal 2021, according to school funding calculations released by House Republications.
And the increase won’t be distributed equally. That’s because funding for the “complexity” category, which funnels additional support to neediest students, is being cut by over $100 million.
Let’s step back and look at how Indiana funds K-12 public schools. The lion’s share of state funding, about 90 percent of it, comes in two categories: a “foundation” grant that provides the same basic, per-pupil funding for every district; and a “complexity” grant that tilts the scale in favor of needy schools. There also are smaller amounts for special education, career education and honors programs.
Foundation funding has been growing, but complexity funding has shrunk. That trend continues under the House-approved budget, with complexity funding dropping by 14.5 percent while foundation funding increases by 4.3 percent in the first year of the budget cycle and by 2.4 percent in the second year.
Complexity funding is determined by a complexity index: the percentage of students in each district or charter school who receive federal benefits under the Supplemental Nutrition Assistance Program or Temporary Assistance to Needy Families or who are in foster care.
The number of Hoosiers receiving federal benefits has indeed declined by double digits since the last budget and funding formula were approved in 2017, according to data from the state Family and Social Services Administration. An improved economy is probably one reason, but there may be others.
For example, there is evidence that immigrant families may be reluctant to sign up for benefits that they or their children can legally receive for fear of government scrutiny and even deportation. (Some of the biggest drops in the complexity funding have been in school districts with large percentages of Hispanic students: for example, a 47 percent drop in Goshen, where over half of students are Hispanic).
Whatever the cause, the effect is that schools serving a lot of low-income families will take a hit. Indianapolis Public Schools will lose $7.2 million in complexity funding. Fort Wayne Community Schools will lose $5.5 million. Much smaller Gary Community Schools will lose $1.3 million.
The increase in foundation funding will help offset those losses, but not entirely. As a result, low-poverty districts will see modest gains in per-pupil funding under the budget, while funding for high-poverty districts will be flat.
Part of the problem is that the legislature has kept the target per-pupil complexity funding at the same level since 2016, and the current budget would keep it there. Per-pupil foundation funding, meanwhile, will continue to grow at a rate faster than inflation. It would make sense to increase both figures at the same rate, but lawmakers haven’t done that.