Indiana school funding lacks effort

The second annual “The Adequacy and Fairness of State School Finance Systems” report is out. And if it were awarding grades, Indiana could expect a D-minus for effort.

The report, produced by researchers at the Albert Shanker Institute and the Rutgers University Graduate School of Education, builds on the growing scholarly consensus that spending more money on schools leads to better results.

“In other words,” it says, “the evidence is clear that money does, indeed, matter.”

“Effort” is a measure of whether states try hard, considering their available resources, to fund K-12 schools. It is one of three core indicators that the report uses to evaluate funding systems.

And it’s on effort that Indiana falls short. Indiana spent only 2.85% of its economic output on K-12 education in 2016-17, the most recent year for which data were available, according to the report. That was the sixth lowest in the U.S., and it was well below the national average of 3.53%.

If Indiana matched the national average for effort, Hoosier schools would be getting at least another $2 billion in funding each year, by my calculation – easily enough to meet Gov. Eric Holcomb’s goal of making Indiana teacher salaries competitive with surrounding states.

The report’s other core indicators measure whether states spend enough and whether they distribute the money fairly, and Indiana is about average in those categories. The report adjusts for local labor markets, district size and other factors to ensure the comparisons are apples-to-apples.

States spend “enough” if their spending is adequate to boost student test scores to the national average. Indiana does spend enough in low-poverty school districts, the report finds. But in high-poverty districts, Indiana spends only about 70% of what’s needed, which is near the national average.

To assess fairness, the report evaluates whether state school funding formulas are progressive: that is, whether they allocate more to poor school districts, which need more help, than to affluent districts.

Indiana used to do OK in this category, but it has slipped. According to the report, Indiana’s adjusted spending in high-poverty districts was less than 1% more than in low-poverty districts. Again, this was in 2016-17, and Indiana’s funding has grown less progressive since then.

Indiana’s Republican legislative leaders like to boast that they approved “historic” increases in K-12 funding in 2019. But this report suggests they still haven’t broken a sweat.


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