From the Statehouse

Report points to districts’ “potential fiscal strain”

A new state report spotlights the financial pressures that have prompted some school districts to tap their reserves in order to offset state budget cuts. Among them is Jefferson County, the state’s largest.

Cindy Stevenson and Leanne Emm
Leanne Emm of CDE (right) makes a point while Jeffco Superintendent Cindy Stevenson (left) listens.

The annual “Fiscal Health Analysis of Colorado School Districts,” presented to the Legislative Audit Committee on Monday, found that nine of the state’s 178 school districts have two of the five “warning indicators” that state auditors look for when compiling the report. Another 39 districts had one warning indicator.

“The presence of one or more fiscal heath warning indicators may not mean that a school district is experiencing financial stress,” the report noted. Rather, indicators are “signs of potential fiscal strain,” Crystal Dorsey of the state auditor’s office told committee members.

The two largest districts with two indicators are Jefferson County, which joined the list with the 2013 report, and Adams 12-Five Star, which went on the list last year.

In many cases, the warnings were triggered by deliberate district actions, primarily drawing down reserves in order to soften the impact of state budget cuts.

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The five indicators

  • Ratio of general fund assets to liabilities
  • Adequacy of revenue available for debt payments
  • General fund ending balance
  • Amounts added to reserves
  • Annual change in general fund balance

State auditors review three years of individual district audits to compile the report. This year’s document covered to 2009-10 to 2011-12.

The report said, “Districts have been spending down their fund balances for various planned expenditures, and districts have offset reductions in state school finance funding with reductions in fund balance rather than a corresponding decrease in expenditures.”

Leanne Emm, assistant state education commissioner for school finance, said the report demonstrates how some districts plan for financial downturns, not that districts are having problems.

“The prudent thing is to spend down fund balances slowly so you are not gutting programs,” Emm said.

Jeffco Superintendent Cindy Stevenson told the committee, “The spend-down in our reserves was planned. … We spent down our reserves over a period of three years to sustain the quality of our programs. … We are in the process of rebuilding those reserves.”

In a written response included in the report, Adams 12 officials said, “The underlying causes of the two negative indicators are a planned spend down of district fund balance due to declining state revenues. The district had budgeted to spend down fund balance in order to mitigate the reductions necessary to balance the budget.”

Colorado school districts have experienced four years of budget cuts because of declines in state revenues. It’s estimated districts have lost more than $1 billion in funding they would have received otherwise. With an improving economy, the 2013-14 state budget includes a 2.7 percent increase in K-12 spending, with a statewide average per-pupil spending of $6,652.

Looking ahead, Emm told the committee, “I also expect to see more districts have more indicators as we get the 2012-13 financial reports,” adding, “2013-14 may be a different story, with a little bit of extra funding going to schools.”

The other districts with two warning indicators are Bethune, Elizabeth, Liberty, Montezuma-Cortez, Park County, Trinidad and Walsh.

More grades?

Schools with lots of transfer students say A-F labels don’t fit

PHOTO: Alan Petersime

Schools with large numbers of kids who transfer in or out should get an extra grade from Indiana’s A-F system, a legislative committee said Thursday.

The proposal, backed by both Democrats and Republicans on the House Education Committee, would give schools a second A-F grade based just on the scores of students who have attended for at least a year.

The goal is to account for schools with “high mobility,” common in poor neighborhoods where families move frequently and kids sometimes change schools several times in a single school year. When kids change schools, their test scores often sink. Lawmakers argued the schools where they end up on test day can be unfairly saddled with a low grade that doesn’t necessarily reflect the quality of teaching at the school.

Even so, the schools will still be judged the same as all schools in Indiana on their first A-F grade.

The proposal was added as an amendment to House Bill 1384, which is mostly aimed at clarifying how high school graduation rate is calculated. The bill passed out of committee today, 8-4. It next heads to the full House for a vote, likely later this week.

The amended bill would require the Indiana State Board of Education to first define a “high-mobility” school. Then, starting in the 2018-19 school year, the board would assign those schools both the typical grade based primarily on state tests and a second grade that only considers the test and other academic data of students who have attended the school for one year or more.

The second grade could not be used by the state board to make decisions about state sanctions, the bill says. But it would help parents and others better understand the circumstances at the school, said Rep. Bob Behning, the bill’s author and chairman of the education committee.

“Especially in our urban centers, there are several schools … that have very high mobility rates,” Behning said. “We could all recognize that if you’re being moved from school A to school B to school C to school D in a year, it’s going to be very difficult for your performance to be where it needs to be.”

The bill also makes a similar change to high school graduation rates, which would help Indiana better comply with new federal law, Behning said. The bill would alter the graduation rate calculation so that students who drop out would only count in a school’s rate if they attended that school for at least 90 percent of the school year. Otherwise, their graduation data gets counted at the previous school they attended for the longest time.

Melissa Brown, head of Indiana Connections Academy, one of the largest online schools in the state, testified in support of the bill. She said the graduation rate change and second letter grade better reflect the work they’re doing with students.

“We really believe that if we can keep a student, we can help them,” Brown said.

Virtual schools have performed poorly on state tests, which some school leaders argue is because they serve a challenging population of students, including those who frequently move and switch schools, come to school far behind grade level and have other learning difficulties that make them more difficult to educate.

Read: The broken promise of Indiana’s online schools

Indiana Connections Academy sees about 20 to 25 percent of students come and go each year, Brown said. Other virtual schools, such as Hoosier Academies, have reported more than double that rate.

Although the rates for individual schools could vary widely, Beech Grove schools had the highest district mobility rate in 2015 in Marion County, where 20.1 percent of students left a Beech Grove school to go outside the district, according to state data. Franklin Township had the lowest, with 8.5 percent. Generally, transfer within districts was much lower.

In IPS, the rate was 18.4 percent for students leaving to attend a school in another district, and 8.2 percent of students left their home school to attend another in IPS.

Brown said she thinks the second school grade could help all schools that see high turnover, but it also could dispel some misinformation about what virtual schools are for — it’s not a “magic pill” for kids who are far behind, she said, a scenario she encounters frequently.

“At the end of the day, it’s really about what’s best for the kid,” Brown said. “And it’s not best to send a student to another school with two weeks left in the semester expecting a miracle to happen.”

new plan

Lawmakers want to allow appeals before low-rated private schools lose vouchers

PHOTO: Shaina Cavazos
Rep. Bob Behning, chairman of the House Education Committee, authored HB 1384, in which voucher language was added late last week.

Indiana House lawmakers signaled support today for a plan to loosen restrictions for private schools accepting state voucher dollars.

Two proposal were amended into the existing House Bill 1384, which is mostly aimed at clarifying how high school graduation rate is calculated. One would allow private schools to appeal to the Indiana State Board of Education to keep receiving vouchers even if they are repeatedly graded an F. The other would allow new “freeway” private schools the chance to begin receiving vouchers more quickly.

Indiana, already a state with one of the most robust taxpayer-funded voucher programs in the country, has made small steps toward broadening the program since the original voucher law passed in 2011 — and today’s amendments could represent two more if they become law. Vouchers shift state money from public schools to pay private school tuition for poor and middle class children.

Under current state law, private schools cannot accept new voucher students for one year after the school is graded a D or F for two straight years. If a school reaches a third year with low grades, it can’t accept new voucher students until it raises its grade to a C or higher for two consecutive years.

Rep. Bob Behning, R-Indianapolis, the bill’s author, said private schools should have the right to appeal those consequences to the state board.

Right now, he said, they “have no redress.”  But public schools, he said, can appeal to the state board.

Behning said the innovation schools and transformation zones in Indianapolis Public Schools were a “perfect example” for why schools need an appeal process because schools that otherwise would face state takeover or other sanctions can instead get a reprieve to start over with a new management approach.

In the case of troubled private schools receiving vouchers, Behning said, there should be an equal opportunity for the state board to allow them time to improve.

”There are tools already available for traditional public schools and for charters that are not available for vouchers,” he said.

But Democrats on the House Education Committee opposed both proposals, arguing they provided more leeway to private schools than traditional public schools have.

“Vouchers are supposed to be the answer, the cure-all, the panacea for what’s going on in traditional schools,” said Rep. Vernon Smith, D-Gary. “If you gave an amendment that said this would be possible for both of them, leveling the playing field, then I would support it.”

The second measure would allow the Indiana State Board of Education to consider a private school accredited and allow it to immediately begin receiving vouchers once it has entered into a contract to become a “freeway school” — a type of state accreditation that has few regulations and requirements compared to full accreditation.Typically, it might take a year or so to become officially accredited.

Indiana’s voucher program is projected to grow over the next two years to more than 38,000 students, at an anticipated cost — according to a House budget draft — of about $160 million in 2019. Currently in Indiana, there are 316 private schools that can accept vouchers.

The voucher amendments passed along party lines last week, and the entire bill passed out of committee today, 8-4. It next heads to the full House for a vote, likely later this week.