Message for legislators: School funding hasn’t kept pace

Indiana schools still haven’t recovered from the financial hit they took from the recession of 2007-09. And schools that serve poor children have fallen furthest behind where they once were.

Those are key findings from an analysis of school funding from the Center for Evaluation and Education Policy at Indiana University. The report, “Equity Analysis of the 2015-17 Indiana School Funding Formula,” was written by CEEP researcher Thomas Sugimoto for the State Board of Education.

Indiana Statehouse

Indiana Statehouse

The findings should be front and center for legislators as they put together a state budget for the next two years, including a funding formula that will allocate about $7 billion a year to schools.

Sugimoto said lawmakers shouldn’t see the report in isolation but should consider it in light of their efforts to create a fair and effective system for funding education. And the report should improve their understanding of the challenges facing schools where funding has declined, he said.

Indiana schools have been digging out of the hole left by the recession, the report shows, but they’ve not reached daylight. Adjusting for inflation, they operate on less money today than eight years ago. State leaders will say there’s only enough money to give schools a modest increase. But the state has $2 billion in reserves, some of which could be tapped. And tax cuts approved in recent years reduced state revenue by $650 million, according to Purdue agricultural economist Larry DeBoer. Investing that money in education would have put schools on much more solid ground.

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House budget shifts funding to schools in affluent areas

The Indiana House Republicans vowed to equalize school funding, and that’s what they are doing with the budget they put forward this week. They’re doing it by taking from the poor and giving to the rich.

Their state budget and school funding formula cuts 25 percent — $290 million – from the complexity index, the formula Indiana uses to steer extra money to high-poverty schools.

The result is predictable: more money for school districts with few poor students, and less money for districts with many poor students. The 10 lowest-poverty districts get per-pupil increases ranging from 4.4 percent to 6 percent. The 10 highest-poverty districts all get their per-pupil funding cut.

High-poverty school districts will still get more money, per pupil, than low-poverty districts. But the gap narrows. Schools with the most challenging demographics will do with less.

That said, the House plan would do better by public schools than Gov. Mike Pence’s budget proposal. It provides more money: Increases of 2.3 percent each of the next two years compared to Pence’s 2 percent the first year and 1 percent the second year. And under Pence’s proposal, fully 30 percent of the K-12 funding increase in fiscal 2016 would have gone to charter schools, which serve less than 3 percent of Indiana students.

The House plan keeps Pence’s $1,500-per-pupil grant program for charter schools. But unlike the governor’s it would fund the grant with a $20 million per year budget line – it wouldn’t take the money out of the pot for regular public schools. And the charter-school grants could pay only for buildings, technology and transportation, not for teacher salaries and regular operating expenses. Continue reading

Referendum results show caution

Indiana school officials remain cautious and conservative about asking voters to increase local property tax rates to fund schools – even though state funding for education continues to lag. Only seven school districts had school-funding referendums on the ballot last week, and five of them passed.

Terry Spradlin, director for education policy with the Center for Evaluation and Education Policy at Indiana University, said the numbers suggest district leaders have become strategic about asking for money. They’re learning when to ask and when not to ask.

Indiana’s current system of relying on voters for some school-funding decisions dates from 2008. School referendums come in two flavors: 1) general fund questions, which levy property taxes to supplement the state funding that’s supposed to pay for school operations; and 2) construction questions, which determine whether schools can borrow for construction or large-scale renovation projects.

Last week, there were four general fund referendums: Barr-Reeve, Munster and Union Township passed, and Boone Township failed (Union Township and Boone Township are small districts in Porter County). There were three construction referendums: Hamilton Southeastern and Noblesville passed and Knox schools in Starke County fell short.

The five-for-seven success beats the state’s historic average by a long shot. Since 2008, there have been 88 school funding referendums in Indiana. Forty-two have passed and 46 failed, according to the detailed scorecard on the CEEP website. Continue reading