What’s next for Indy ‘turnaround academies’?

It seemed like a victory for Indianapolis Public Schools when the Indiana Charter School Board voted Dec. 13 to reject charter applications for three Indianapolis “turnaround academy” schools.

But it’s not over till it’s over. The fate of the schools – Emmerich Manual High School, T.C. Howe School and Emma Donnan Middle School – is still in the hands of the State Board of Education. And the board has already turned a cold shoulder to the idea of returning the schools to IPS.

The State Board of Education will consider what happens next at its Jan. 15 meeting.

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What a tangled web …

In 2012, the Indiana State Board of Education and Superintendent of Public Instruction Tony Bennett chose Charter Schools USA to run three Indianapolis schools that the state had taken over after years of low test scores.

Thus began a complex tale replete with politics, money and head-spinning networks of relationships – with the fate of the schools, T.C. Howe Community School, Emmerich Manual High School and Emma Donnan Middle School, still in the balance seven years later.

The saga took another turn last week when the state board rejected an appeal by Indianapolis Public Schools to let the schools return to its fold as “innovation network” schools. Instead, it called for Charter Schools USA, through a nonprofit affiliate, to keep running the schools, now as charter schools.

The Indiana Charter School Board could decide Friday whether to award charters to the CSUSA affiliate, called ReThink Forward Indiana. If it does, ReThink will have yet another CSUSA-connected group, Noble Education Initiative, manage the schools.

Tax caps cost schools hundreds of millions

It seemed like such a good idea at the time. Indiana legislators enacted property tax caps over a decade ago. Then, in 2010, we added them to the state constitution by a referendum vote of 72% to 28%. I don’t recall much talk at the time about consequences for school funding, but we’re seeing them now.

In some school districts, the consequences look to be devastating.

According to data from the Indiana Department of Local Government Finance, public schools are losing about $268 million in revenue this year as a result of caps. That’s over one-tenth of their total levy, the amount of property tax revenue the districts would otherwise be able to raise.

The impact of the caps varies widely, with big losses for some large and urban school districts: $18.3 million for Indianapolis Public Schools, $17.7 million for Gary Community Schools and $12.3 million for Wayne Township (Indianapolis) schools.

School districts with the largest losses from property tax caps. Source: Indiana Department of Local Government Finance.

Gary schools are losing almost half of their potential local property tax levy.

When it comes to lost revenue per pupil, the biggest losers include Gary Community Schools, $3,535; Muncie Community Schools, $,1,620; Beech Grove School Corp., $1,450; Anderson Community Schools, $1,298; and Westfield-Washington School Corp., $1,134.

It’s probably no accident that Gary and Muncie are the two Indiana districts to be labeled financially “distressed” and taken over by the state. Muncie was later transferred to Ball State University.

School districts that lose the most money per pupil from property tax caps. Source: Indiana Department of Local Government Finance.

Terry Spradlin, executive director of the Indiana School Boards Association, noted that the state’s 290 school corporations have lost nearly $1 billion to tax caps in the past four years. The legislature has provided districts some flexibility for managing the losses, but it’s still a struggle.

“These are significant issues that are long-term, and there are no easy solutions,” Spradlin said.

Under Indiana’s school funding system, the state pays most school operating costs, including salaries and benefits for teachers and other school employees. But school corporations rely on local property taxes to pay for transportation, capital projects and construction debt.