Funding cap would hurt high-poverty schools

The state budget being considered this week by the Indiana House would shift millions of dollars away from high-poverty schools and school districts.

That’s because it includes a cap on the complexity index, the calculation that Indiana uses to direct additional funding to schools that serve many low-income families. Lawmakers would impose the cap at a time when many Hoosier communities are struggling financially because of the COVID-19 pandemic.

The budget legislation, approved by the Ways and Means Committee and now before the full House, puts a limit on how much a district or school’s complexity index can increase. For the most part, the cap would not affect low-poverty schools and districts, but it could have a big impact on those that enroll large numbers of poor students.

Indiana’s complexity index is based on the percentage of students who receive Supplemental Nutrition Assistance Program, or SNAP, benefits; who receive Temporary Assistance to Needy Families, or TANF; or who are in foster care. In practical terms, you can look at SNAP, the largest program.

Figures from the state Family and Social Services Administration show that SNAP participation increased on the order of 20% in most counties when the pandemic started impacting the economy last spring. Normally, you would expect that to increase a school district’s complexity index by 20%, bringing more state funding. But the budget bill caps the complexity index, allowing it to increase by no more than 2.5 percentage points.

Low-poverty districts, for the most part, won’t see any effect. Carmel Clay Community Schools, for example, has a complexity index of about 2.5%. Even if that number doubled, it wouldn’t go over the cap.

Gary Community Schools, on the other hand, has a complexity index of 60%. Based on FSSA data for SNAP participation in Lake County, it might be expected to increase to nearly 70%. But with the cap, it would be only 62.5%. Gary schools would miss out on over $1 million as a result, according to my estimate.

Other high-poverty districts, both urban and rural, could see similar losses, as could many urban charter schools. Jeff Butts, superintendent of Wayne Township Schools in Indianapolis, told Chalkbeat Indiana that his district would lose out on 7.4% of its complexity funding.

The cap comes on top of longterm reductions in complexity funding that lawmakers have made in the past few budget sessions. According to a 2019 report, complexity index funding was reduced by half over the previous 10 years, falling from 20% to 10% of state K-12 funding.

Meanwhile, the same House Republicans are proposing a huge increase in the state’s private school voucher program, giving state-funded tuition benefits to a family of five making up to $170,000 a year. Capping complexity funding will make it easier to pay for expanding vouchers.

If this isn’t taking from the poor and giving the rich, it’s darned close to it.

1 thought on “Funding cap would hurt high-poverty schools

  1. Pingback: Senate budget would dial back voucher expansion | School Matters

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