Smaller IPS budget reflects changes following phantom deficit

Superintendent Lewis Ferebee called the budget he proposed to the Indianapolis Public School Board today the district’s first real budget in years.

The general fund for the upcoming year, which pays most of the district’s day-to-day bills, is much smaller it was — just $233 million for 2015. That’s down $30 million from the last budget, which was for $263 million. The difference is the exact amount Superintendent Lewis Ferebee said the budget was inflated by in March when he shocked even the district’s own board members by announcing he had discovered the district’s frequently cited budget deficit actually did not exist.

It’s not a coincidence.

“I think it’s definitely more realistic,” Ferebee said. “This is a better alignment of our revenue and expenses.”

Ferebee, who came to IPS from North Carolina last September, said in March that he had spent part of his holiday break studying the district’s budget numbers and was stumped by how the district managed to claim for years that it had large deficits, often blaming cuts in state funding, when he calculated it would end 2013 with a small surplus of $8.4 million.

Ferebee said his investigation showed the district significantly over-budgeted every year for expenses including teachers, desegregation efforts, contract services and certified coaches. Subsequent audits performed by the Indiana State Board of Accounts and a national urban school advocacy group, the Council on the Great City Schools, agreed. Those groups found IPS had shoddy budget practices and failed to provide the school board with even the most basic financial data it needed.

In 2009, then-school board member Kelly Bentley had been denied a request to see more detailed budget documents by then-Superintendent Eugene White. Bentley has announced a campaign to regain a school board seat this fall.

In the wake of the audits, Ferebee named a new budget committee and charged it with helping find solutions to looming fiscal problems, which include steadily eroding state funding and a desire to raise salaries for teachers and other district employees who have seen few pay raises the past five years.

Ferebee cautioned tonight that the surplus was a bit misleading: most of it came when the district won a lawsuit against the state, which required IPS to be returned about $6 million in what the court determined were over payments to to outside companies the Indiana State Board of Education hired to run four failing IPS schools independently. The other $2 million of the surplus, he said, came primarily from job cuts, many of them in the central office.

With the Indiana legislature aiming to make state per student aid more equal, large city districts like IPS are getting less aid each year. Given that, and the narrowness of the gap between income and expenses last year, Ferebee cautioned that the district needs to stay in cost-cutting mode.

“In 2015 we know we have some reduced funding but we’ve made moves to reduce personnel,” he said.