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%.

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Senate budget is better but not by much

UPDATE: The Senate budget bill now includes the same expansion to Indiana’s voucher program that the House approved last month. The Senate added the voucher provision as an amendment late Monday. It approved the budget today. Differences between the two versions will be worked out in a House-Senate conference committee.

The Indiana Senate took some modest steps in the right direction with the state budget that it approved last week. For education, it improves on the House-approved version on several counts.

  • The Senate budget bill allocates more money for K-12 schools: an increase of 2.7% in the first year of the biennium and 2.2% in the second year versus 2.2% each year for the House version.
  • It keeps more of the funding with public schools and brick-and-mortar charter schools, spending less on virtual charter schools.
  • It provides a little more money for “complexity,” the factor in the funding formula that gives more money to schools serving disadvantaged students.

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Poor schools neglected in funding plan

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.

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School funding formula takes complex path to simpler focus

If you followed the legislature’s recent school funding debate, you may have noticed that Indiana will be allocating money to schools based in part on the number of students who receive food stamps or welfare benefits or who are in foster case.

That’s the latest revision of the Complexity Index, the part of the school funding formula that gives more money to schools facing bigger challenges. It’s a change from the way Indiana has distributed the money in the past, but not as big a change as it might appear.

Here’s the story.

A complexity story

Indiana’s Complexity Index dates from 1993 – it was originally called the At-Risk Index – and it has unquestionably been a good thing. An attempt to level the playing field by offering more resources to needy schools, it’s the reason Indiana gets credit for a funding system that’s fairer than most.

The index has been revised several times, but in recent years it was based on the percentage of students who qualified for free or reduced-price school lunches. Students qualify for free lunches if their family income is no more than 130 percent of the federal poverty level; they qualify for reduced-price lunches if income is no more than 185 percent of the poverty level.

But some lawmakers grew uncomfortable with using the federal lunch program to calculate the index. They were concerned that families couldn’t be made to show proof of income to qualify. A U.S. Department of Agriculture study found significant error rates in the program.

“There’s very little verification of who is eligible,” Sen. Luke Kenley, the chief Senate budget writer, told Franklin College’s Statehouse File. “And in recent years the number of kids on free and reduced lunch have been going up dramatically.”

So the legislature initially voted to shift the basis of the Complexity Index to the number of students who participate in the state’s free textbook program, effective this year.

Hoosier students qualify for free textbooks if they meet the income guidelines for free or reduced-price school lunch. Unlike the lunch program, however, the state-funded textbook program could be subject to extensive audits. Families could be required to prove they qualified.

But an unexpected issue arose, thanks to a change in the federal lunch program.

Community Eligibility

Starting last fall, high-poverty schools in Indiana could participate in the lunch program through Community Eligibility, which means all students in the school get free lunch, regardless of family income. The idea is that it’s less costly, more efficient and fairer than tracking who qualifies and who doesn’t.

Indianapolis Public Schools implemented Community Eligibility in all of its schools, and 13 other districts adopted the approach in some schools. Nineteen charter schools also participate. Continue reading