Big money

Indiana schools credit rating at risk: Move could cost districts millions

A national credit rating agency is threatening to downgrade Indiana school debt, in a move that could costs districts millions of dollars.

In a statement issued yesterday, the national credit rating agency Standard & Poor’s said that it has placed a 90-day watch on the rating for loans to all Indiana school districts. If the state does not resolve S&P’s concerns, the ratings for school corporations across Indiana could be lowered, forcing districts to pay higher interest rates on debt.

Wayne Township Superintendent Jeff Butts said the watch from the S&P could cost the district more than $1 million in additional interest on bonds it plans to issue in the coming months.

“Anytime you are talking about credit, it’s always very concerning,” Butts said. “Being able to take advantage of lower interest rates … is the only thing really that allows us right now, with our current (tax) cap, to maintain the facilities that our community has invested in.”

The warning was sparked by a new interpretation from S&P of a state statute designed to ensure creditors receive payments on loans to districts. The law allows the state to divert aid meant for schools to pay debt if the districts do not make their debt payments. By ensuring that creditors are paid, the law improves credit ratings for districts across the state.

It is unclear whether the state has recently changed how it handles intercepting state aid. S&P said in a statement that the watch was issued because analysts have new concerns about the process.

“As part of a routine portfolio review, we learned that the Office of the Treasurer of State would administer the intercept of state aid under IC 20-48-1-11 differently than we had understood,” S&P said in the statement. “There is a possibility that Indiana could revise current procedures resulting in an intercept of state aid that provides for timely payment of debt service in full. … In the event such revisions are made in a timely manner, the rating could be affirmed.”

The Indiana Office of Management and Budget Director Micah Vincent said in a statement that the state is working to ensure the watch is removed.

“We are looking at possible solutions to address S&P’s newfound concerns,” Vincent said. “It is our goal to ensure that S&P removes the Indiana State Aid Intercept rating from CreditWatch and affirms the intercept program’s excellent credit rating, which supports Indiana’s schools and taxpayers.”

promoting choice

Betsy DeVos defends vouchers and slams AFT in her speech to conservatives

U.S. Education Secretary Betsy DeVos rallied a conservative crowd in Denver on Thursday, criticizing teachers unions and local protesters and defending private-school vouchers as a way to help disadvantaged students.

“Our opponents, the defenders of the status quo, only protest those capable of implementing real change,” DeVos told members of the American Legislative Exchange Council, an influential conservative group that helps shape legislative policy across the country. “You represent real change.”

DeVos delivered the keynote speech at the ALEC meeting, where she reiterated her support for local control of schools and school choice. Citing the conservative former British Prime Minister Margaret Thatcher, she said education should be about individual students and families, not school systems.

“Lady Thatcher regretted that too many seem to blame all their problems on society. But, ‘who is society?’” DeVos asked, quoting Thatcher. “‘There is no such thing!’”

The American Federation of Teachers, she said, has exactly the opposite idea.

“Parents have seen that defenders of the status quo don’t have their kids’ interests at heart,” she said.

AFT President Randi Weingarten threw punches of her own Thursday, calling private school vouchers “only slightly more polite cousins of segregation” in a Washington, D.C. speech.

DeVos highlighted states that have introduced vouchers or new school-choice programs including North Carolina, Kentucky and Arizona. Indiana — home to the nation’s largest voucher program — also won praise.

Data from existing voucher programs may have sparked the one critical question DeVos faced, during a brief sit-down after her speech. Legislators want to know how to respond to complaints that voucher programs only help wealthy families, the moderator, an Arizona lawmaker, told DeVos.

In Indiana, for instance, vouchers are increasingly popular in wealthy school districts and among families whose students had not previously attended public school.

“I just dismiss that as a patently false argument,” DeVos said. “Wealthy people already have choice. They’re making choices every day, every year, by moving somewhere where they determine the schools are right for their children or by paying tuition if they haven’t moved somewhere.”

Earlier this year, DeVos criticized Denver as not offering enough school choice because Colorado does not have private school vouchers. Still, presenters at the conference Thursday introduced Denver to ALEC members — conservative legislators, business leaders and lobbyists — as “living proof” that charter schools and competition work.

A local Denver school board candidate, Tay Anderson, and state union leaders held a protest Wednesday ahead of DeVos’s speech. Attendees said they were concerned that ALEC’s efforts, and DeVos’s focus on vouchers and school choice, would hurt public schools.

DeVos didn’t make mention of Denver or Colorado in her speech Thursday, but she briefly referenced the protest.

“I consider the excitement a badge of honor, and so should you,” she said.

New Partner

Boys & Girls Clubs coming to two Memphis schools after all

PHOTO: Marta W. Aldrich
Principal Tisha Durrah stands at the entrance of Craigmont High, a Memphis school that soon will host one of the city's first school-based, after-school clubs operated by the Boys & Girls Club of Greater Memphis.

Principal Tisha Durrah says her faculty can keep students focused and safe during school hours at Craigmont High School. It’s the time after the final bell rings that she’s concerned about.

“They’re just walking the neighborhood basically,” Durrah says of daily after-school loitering around the Raleigh campus, prompting her to send three robocalls to parents last year. “It puts our students at risk when they don’t have something to do after school.”

Those options will expand this fall.

Craigmont is one of two Memphis schools that will welcome after-school programs run by the Boys & Girls Club of Greater Memphis following this week’s change of heart by Shelby County’s Board of Commissioners.

Commissioners voted 9-4 to foot the bill for operational costs to open clubs at Craigmont and Dunbar Elementary. The decision was a reversal from last week when the board voted down Shelby County Schools’ request for an extra $1.6 million to open three school-based clubs, including one at Riverview School. Wednesday’s approval was for a one-time grant of $905,000.

Commissioners have agreed all along that putting after-school clubs in Memphis schools is a good idea — to provide more enriching activities for neighborhood children in need. But some argued last week that the district should tap existing money in its savings account instead of asking the county for extra funding. Later, the district’s lawyers said the school system can only use that money legally to pay for direct educational services, not to help fund a nonprofit’s operations.

Heidi Shafer is one of two commissioners to reverse their votes in favor of the investment. She said she wanted to move ahead with a final county budget, but remains concerned about the clubs’ sustainability and the precedent being set.

PHOTO: Boys & Girls Club
The Boys & Girls Club provides after-school programs for children and teens.

“If we give (money) to something that’s para-education, we have less to give to education,” she said. “There’s only a limited amount of dollars to go around.”

The funding will help bring to Memphis the first-ever school-based Boys & Girls clubs opened through Shelby County Schools, the largest district in Tennessee, said Keith Blanchard, the organization’s Memphis CEO.

While the nonprofit has had a local presence since 1962 and is up to seven sites in Memphis, it’s had no local government funding heretofore, which is unusual across its network. Nationally, about 1,600 of the organization’s 4,300 clubs are based in schools.

Blanchard plans to get Dunbar’s club up and running by the beginning of October in the city’s Orange Mound community. Craigmont’s should open by November.

“We hope to maybe do another school soon. … A lot will depend on how this school year goes,” he said. “I certainly hope the county sees the value in this and continues to fund in a significant way.”

At Craigmont, the club will mean after-school tutoring and job training in computer science and interviewing skills. Durrah says the activities will provide extra resources as the district seeks to better equip students for life after high school.

“It looks toward the long term,” Durrah said of the program. “This really fits in with the district’s college- and career-ready goals.”