Here’s a little secret about school choice in Indiana: Public schools lose more students to other public school districts than to charter schools or private school vouchers.
According to the Indiana Department of Education’s fall 2020 Public School Corporation Transfer Report, 70,394 Hoosier students transferred from one public school district to another this year. That compares with 44,569 who attend charter schools and 35,150 who attend private schools using state-funded tuition vouchers, the options we think of as “school choice.”
Until a few years ago, Indiana didn’t see so many public-school transfers. School district operations were partially funded by local property taxes. Students could transfer from one district to another, but they were expected to pay “transfer tuition” to cover the costs.
Faced with questions about state funding for schools that are operating online because of the COVID-19 pandemic, Gov. Eric Holcomb came up with an answer: Kick the can down the road.
Gov. Eric Holcomb
Holcomb, together with leaders of the Indiana House and Senate, proposed delaying the “count day” for recording school corporations’ official fall enrollment from September until at least December. That means schools will continue to receive complete state funding through the fall semester.
But it doesn’t address what happens beyond that. Neither does it ensure that schools will get their get the funding they expected for the 2020-21 school year, without having it reduced because some students attend virtually. That will be up to the legislature.
“The key in this discussion is a one-time adjustment to the virtual funding portion of the school formula. That is the solution to the issue,” Denny Costerison, executive director of the Indiana Association of School Business Officials, told me by email.
Unemployment is at record levels in Indiana, with hundreds of thousands of Hoosiers out of work. A recession is coming, likely to be deeper than the last one. It seems like a bad time to call for a tax increase.
But voters in 12 school districts approved referendums Tuesday to raise money for school operating expenses and building projects. Yes, they said, raise our property taxes. Because we want to support our students.
Four of the districts passed both operating and building referendums. In all, 16 of the 18 referendums that were on the ballot won approval.
State Rep. Vernon Smith made a good point Thursday when the Indiana House was discussing legislation to regulate virtual charter schools. The Gary Democrat suggested state funding for the schools should be based on how many students they enroll throughout the school year, not just in the fall.
Rep. Vernon Smith
Indiana schools receive state funding according to the number of students they enroll on a designated count day in September. If students leave after that day, the schools keep the money but no longer incur the cost of serving the students. And that happens a lot – especially at some of the virtual schools.
We know this because the Indiana Department of Education has schools report their enrollment on a second count day in February. The spring semester count doesn’t affect funding; it’s for information purposes only.
In the 2017-18 school year, one online charter school, Indiana Virtual School, reported enrollment of 3,381 students in the fall but only 1,836 students in the spring. That’s a loss of 46 percent of its students.
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.
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.
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
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