Indiana ‘at-risk’ funding has declined

Indiana needs to spend more money on K-12 education. And it should target more of its spending to school districts that serve a large share of students from poor families.

Statehouse domeThose were key take-aways from a study presented Tuesday to a legislative committee examining Indiana’s complexity index, which channels extra money to schools to compensate for their enrollment of students who may require additional resources.

Robert Toutkoushian, a professor at the University of Georgia, produced the study, which found that Indiana’s per-pupil complexity index funding has declined by half in the past 10 years. As a share of overall state school funding, complexity funding fell from almost 20% to less than 10%.

Toutkoushian presented his findings via live video to the legislature’s interim study committee on fiscal policy. The study was commissioned by the Indiana School Boards Association, the Indiana Association of School Business Officials, the Indiana Association of Public School Superintendents, the Indiana Urban Schools Association and the Indiana Small and Rural Schools Association.

It recommended that lawmakers consider new ways to calculate the complexity index. The current system uses the number of students who receive federal Supplemental Nutrition Assistance Program (food stamps) or Temporary Assistance for Needy Families benefits or who are in foster care. Alternatives could include using tax returns or census data to measure school district poverty.

Indiana was once at the forefront of targeting additional spending to schools that need it most, Toutkoushian said. It adopted an at-risk index, the forerunner to today’s complexity index, in 1993.

Prior to 2015, the index was based on the number of students who qualified by family income for free or reduced-price school meals. But some legislators didn’t trust that measure, because the income data were self-reported. Thus the shift to food stamps, TANF and foster care.

The result is that Indiana is an outlier. A majority of states use free and reduced lunch numbers to calculate funding for at-risk students. Indiana is one of only a handful that use federal benefit programs.

After the shift, school officials say, came cuts on complexity funding. One factor is that the number of families receiving food stamps and TANF has declined. But it’s also likely that the current system undercounts poor students. Some families don’t apply for benefits because of the bureaucratic hassle. Immigrants, especially, may avoid submitting income information for fear of deportation.

For high-poverty schools, complexity funding cuts have come on top of years of anemic funding for Indiana’s overall public education program. According to a study that Toutkoushian produced in March for the Indiana State Teachers Association, Indiana has fallen far behind in school funding and teacher salaries and would have to spend nearly $1.5 billion more a year to catch up with neighboring states.

Toutkoushian said there is no agreement on the best way to allocate funding for at-risk students, and there’s no formula for how much money it takes to close achievement gaps. But there is a growing consensus among education researchers, he said, that money matters. Recent, high-quality studies have shown that spending more on schools can help students learn, especially students from poor families.

Legislators have said they will consider revising the complexity index formula, but they aren’t expected to make any changes before the next legislative budget session in 2021.

3 thoughts on “Indiana ‘at-risk’ funding has declined

  1. Pingback: No clear pattern to high- and low-spending school districts | School Matters

  2. Pingback: Indiana school funding lacks effort | School Matters

  3. Pingback: Funding cap would hurt high-poverty schools | School Matters

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