Funding fight

Student Success funding bill praised and panned

House Speaker Mark Ferrandino (at podium) touts the proposed Student Success Act.

Legislative backers of the proposed Student Success Act formally unveiled their spending-and-reform plan at an upbeat Capitol news conference Thursday, even as skeptics ratcheted up criticism of the proposal.

While legislators at the news conference promoted the bill as a balance between more funding and reform, people attending a school boards conference a few blocks away applauded a protest song that called on lawmakers to do more to reduce the state’s school funding shortfall.

The yet-to-be-introduced bill proposes spending more than $300 million — part to reduce the $1 billion funding shortfall, some to help districts pay for implementation of reforms already on the books, and part for a list of earmarked programs. (Chalkbeat Colorado first reported the details of the bill in this story.)

Around the Capitol, the bill commonly is called the “Son of 213,” a reference to Senate Bill 13-213, the comprehensive, $1 billion overhaul of the state’s school funding system that remains on the shelf because voters last year rejected the tax increase necessary to pay for it. (Sponsors of the new bill hate that nickname.)

More than a dozen House members from both parties flanked Democratic Speaker Mark Ferrandino of Denver as he called the proposal a first step toward improved school funding and a continuation of education reform efforts.

“While not everyone is in full agreement, people have been heard,” Ferrandino said. “We are absolutely committed to working with all stakeholders.”

The bill’s three prime sponsors amplified the do-what-we-can and all-are-being-consulted themes.

Reps. Millie Hamner, D-Dillon, and Carole Murray, R-Castle Rock, touted the bill as a “balanced approach.” Hamner added, “We will continue to reach out to all groups.” Hamner is chair of the House Education Committee and Murray is the senior Republican member.

“We’ve heard the districts, but we also have an interest in moving Colorado forward,” Hamner said.

Senate prime sponsor Sen. Mike Johnston, D-Denver, picked up the same themes, saying, “We’re not going to get all of the way” toward restoring K-12 funding, but added, “Let us begin the process of trying to make this reinvestment.” (While Johnston is widely regarded by lobbyists and many educators as the animating force behind the bill, its sponsors are promoting Hamner and Murray as the key drivers and stress the bipartisan support for the bill, at least in the House. Johnston was the only senator at the news conference.)

Others raise concerns about bill

While supporters were touting the bill, others were significantly less enthusiastic.

As it happens, the Colorado Association of Schools board opened its annual legislative conference on the same day as the supporters’ news conference.

Those who attended a luncheon at the Brown Palace Hotel cheered a “protest” song written by Mark DeVoti, a superintendent who now works for CASB, that urged the legislature to devote more money to buying down the negative factor.

The negative factor is a formula used by the legislature to reduce school funding from what it otherwise would have been in order the balance the annual state budget. It’s estimated the negative factor has set school funding $1 billion below what it would have been otherwise.

The proposed Student Success bill would make only an $80 million dent in that $1 billion. School districts and superintendents are pushing to “buy down” the negative factor in 2014-15 by anywhere from $200 million to $275 million.

The chorus to DeVoti’s two-verse song goes:

Take that Negative Factor, make it go away!
Come on put that billion back
Do it with no string attached
Take that Negative Factor, make it go away

Lt. Gov. Joe Garcia, the Hickenlooper administration’s point person on education issues, was the featured speaker at the CASB luncheon. According to several people who attended the event, Garcia was peppered with lots of hard questions – and no softballs – about the negative factor and the Student Success bill. Attendees said Garcia held his own but that the session was tense.

Later in the day, CASB chief lobbyist Jane Urschel made an impassioned plea to members to lobby their legislators for reduction of the negative factor. “I cannot do this for you,” she said. “You have to talk to them. … I think they can do [reduce] $200 million in the negative factor and still do some other expenditures they want to do.”

In a reference to that fact that most CASB members come from small rural districts, Urschel said, “Get off your tractors” and come to Denver to lobby.

Two other influential mainline interest groups, the Colorado Education Association and the Colorado Association of School Executives, issued statements Thursday raising concerns about the Student Success Act.

“We appreciate that lawmakers allocated some money to help revive struggling districts, but the proposed $80 million is inadequate to schools and classrooms that lost more than $1 billion in just five years,” said CEA President Kerrie Dallman in a prepared statement. “We also have great concern that the majority of the funding in the proposal comes with mandates on how to use, or is one-time money.”

CASE Executive Director Bruce Caughey also called for a larger cut in the negative factor.

Negative factor reduction carries future implications

A key – but complicated – issue in the negative factor debate is the impact on future state budgets if a significant amount of money is devoted to buying down the negative factor. Because the state constitution requires annual increases in base school funding based on inflation and enrollment growth, increasing base funding through reduction of the negative factor would mean even larger mandatory school funding in future years. People like Ferrandino and Hickenlooper budget advisors resist too big a cut in the negative factor for that reason.

A safety valve for school support is a dedicated account called the State Education Fund, which can be used to supplement school support from the state’s main General Fund. Gov. John Hickenlooper has proposed keeping a $700 million balance in the SEF at the end of 2014-15, thereby saving some money to spend on schools in future years. The spending proposed in the Student Success Act could leave as little as $200 million or as much as $400 million in the SEF.

Asked about that, Hickenlooper budget chief Henry Sobanet told Chalkbeat Colorado, “There are ideas in the legislature that total several hundred million dollars above our [budget] request. After the March forecast, we will work with the JBC and leadership on a budget package that predicted revenue can support.”

For now, the proposed spending in the Student Success bill is an educated guess and is expected to change after those state revenue forecasts are released at the end of Marcy.

“The March forecast will determine how much we can spend,” Ferrandino said.

Notably absent from the Student Success bill is any increased funding for full-day kindergarten and the Colorado Preschool Program, both favorites of education reformers. Depending on the March forecasts, Murray said additional funding for those programs could be included in the annual school finance bill, a separate piece of legislation. That would be “the icing on the cake,” she said.

New bill proposes other uses for BEST revenue

The Student Success bill proposes spending all $40 million generated by new marijuana taxes for kindergarten facilities, charter school facilities and school technology upgrades.

A bill introduced Wednesday proposes different uses.

House Bill 14-1287 proposes that the money go to the state capital construction fund without earmarking, according to prime sponsor Rep. Dave Young, D-Greeley. But the main thrust of the bill is to help school districts affected by disasters such as last year’s wildfires and floods.

In the event of an officially declared disaster, the bill would require the Department of Education to contact affected school districts to inventory damage. Affected districts could apply to the Capital Construction Assistance Board for emergency aid, and the normal local matching requirements of the Building Excellent Schools Today program would be waived. The board could use up to 10 percent of the fund for emergency grants.

Asked about potential conflict with student success bill, Young smiled and said, “I think we’re going to have an interesting debate.” (Young was part of the supporting cast of lawmakers at the Student Success news conference.)

HB 14-1287 originated with a special legislature committee convened after last year’s disaster and has bipartisan sponsorship.

School Finance

IPS board votes to ask taxpayers for $315 million, reject the chamber’s plan

PHOTO: Dylan Peers McCoy

Indianapolis Public Schools officials voted Tuesday to ask taxpayers for $315 million over eight years to help close its budget gap — an amount that’s less than half the district’s initial proposal but is still high enough to draw skepticism from a local business group.

The school board pledged to continue discussions in the next week with the Indy Chamber, which released an alternative proposal last week calling for massive spending cuts and a significantly smaller tax increase. The school board rejected the proposal as unrealistic and instead voted to add a much larger tax measure to the November ballot.

If the school board and the chamber come to a different agreement before the July 24 meeting, the board can change the request for more taxpayer money before it goes to voters. Some board members, however, were dubious that they would be able to find common ground.

“While I appreciate the fact that we want to continue to negotiate, I’m pretty sure that I’m at rock bottom now,” said school board member Kelly Bentley. “That initial proposal by the chamber is, unfortunately in my mind, it’s insulting. It’s insulting to our children, and to our neighborhoods, and to our families.”

Chamber leaders, whose support is considered important to the referendum passing, were skeptical about the dollar amount. In a press release, the group said the district was “taking another step towards seeking a double-digit tax increase.”

“We’re concerned that our numbers are so divergent,” said chamber president and CEO Michael Huber in the statement. “We need to study the assumptions behind the $318 million request; clearly the tax impact is significant and the task of winning voter support will be challenging.”

During the board meeting, which lasted more than two hours, district leaders discussed why schools need more money and why the chamber report is unrealistic. They also took comments from community members who were largely supportive of the tax increase.

Joe Ignatius, who mentors students through 100 Black Men of Indianapolis, said that he has seen the benefits of more funding from referendums in other communities.

“This should be a no brainer, to invest in our future for the students,” Ignatius said. “Don’t think about the immediate impact of the dollars that may come out of your pocket but more the long-term impact.”

If the district goes forward with its plan, and voters approve the tax increase, the school system would get as much as $39.4 million more per year for eight years. A family with a home at the district’s median value — $75,300 — would pay about $3.90 more per month in property taxes. (Since the initial proposal, the district reduced the median home value used in calculations on the advice of a consultant.)

The district plan comes on the heels of months of uncertainty. After the school board abandoned its initial plan to seek nearly $1 billion for operating expenses and construction, district officials spent weeks working with the Indy Chamber to craft a less costly proposal. Last month, the board approved a separate referendum to ask taxpayers for about $52 million for school renovations, particularly school safety features.

But the groups came to different conclusions about how much money the district needs for operating expenses.

The chamber released an analysis last week that called for $477 million in cuts, including eliminating busing for high school students, reducing the number of teachers, closing schools, and cutting central office staff. The recommendation also included a $100 million tax increase to fund 16 percent raises for teachers.

District officials, however, say the cuts proposed by the chamber are too aggressive and cannot be accomplished as quickly as the group wants. The administration and board members spent nearly an hour of the meeting Tuesday discussing the chamber plan, why they believe it’s methodology is wrong, and the devastating consequences they say it would have on schools.

Even if the $315 million plan proposed by the district passes, it will come with some sacrifices compared to the initial plan. Those cuts could include: reduced transportation for magnet schools, field trips, and after school activities; school closings; increased benefits costs for employees; and smaller pay increases for teachers and employees.

The district did not make a specific commitment to how much teacher pay would increase if the amount asked for in the referendum is approved, but Superintendent Lewis Ferebee said the funds would pay for consistent raises.

“We would be at least addressing inflationary increases and cost of living, but we hope that we can be higher than that,” said Ferebee. “It would depend a lot on what we are able to realize in savings.”

The school board’s decision to rebuff the chamber’s recommendation puts the district in a difficult position. The chamber has no official role in determining the amount of the referendum, but it could be a politically powerful ally.

Last week, Al Hubbard, an influential philanthropist and businessman who provided major funding for the chamber analysis, said that if the district seeks more money than the group recommended, he would oppose the referendum.

The total tax increase would vary for each homeowner within district boundaries. The operating increase would raise taxes by up to $0.28 for every $100 of assessed property value, while the construction increase would raise taxes by up to $0.03 per $100 of assessed property value.

School Finance

Facing tax opposition, Indianapolis leaders may settle for less than schools need

PHOTO: Alan Petersime

One day before the Indianapolis Public Schools Board is expected to approve a ballot measure to ask taxpayers for more funding, district officials appealed to a small group of community members for support.

Fewer than 40 people, including district staff, gathered Monday night at the New Era Church to hear from leaders about the need for more school funding. School board members plan to vote Tuesday on whether to ask voters to approve a tax hike to fund operating expenses, such as teacher salaries, in the November election. But just how much money they will seek is unknown.

The crowd at New Era was largely supportive of plans to raise more money for district schools, and at moments people appeared wistful that the district had abandoned an early plan to seek nearly $1 billion over eight years, which one person described as a “dream.”

Martha Malinski, a parent at School 91 and a recent transplant from Minneapolis, said the city appears to have a “lack of investment” in education.

“Is the money that you are asking for enough?” she asked.

Whatever amount the district eventually seeks is likely to be dramatically scaled down from the first proposal. Superintendent Lewis Ferebee has spent more than seven months grappling with the reality that many Indianapolis political leaders and taxpayers don’t have the stomach for the tax increase the district initially sought.

“We are trying to balance what’s too much in terms of tax burden with the need for our students,” said Ferebee, who also raised the possibility that the district might return to taxpayers for more money if the first referendum does not raise enough. “If we don’t invest in our young people now, what are the consequences and what do we have to pay later?”

After withdrawing their initial plan to seek nearly $1 billion over eight years, district officials spent months working with the Indy Chamber to analyze Indianapolis Public Schools finances and find areas to trim in an effort to reduce the potential tax increase. But the district and chamber are at odds over how aggressive the cuts should be.

Last week, the chamber released a voluminous list of cuts the group says could save the school system $477 million over eight years. They include reducing the number of teachers, eliminating busing for high schoolers, and closing schools. The chamber has paired those cuts with a proposal for a referendum to increase school funding by $100 million, which it says could raise teacher salaries by 16 percent.

District officials, however, say the timeline for the cuts proposed by the chamber is not realistic. The analysis mostly includes strategies suggested by the district, said Ferebee. But steps like redistricting and closing schools, for example, can take many months.

“Where we are apart is the pace, the cadence and how aggressive the approach is with realizing those savings,” he said.

Not everyone at the meeting was supportive of the administration. Tim Stark, a teacher from George Washington High School, asked the superintendent not to work with charter high school partners until the district’s traditional high schools are fully enrolled. But Stark said he is still supportive of increasing funding for the district. “It is really important for IPS to get the funds,” he said.

The chamber has no explicit authority over the tax increase but it has the political sway to play an influential role in whether it passes. As a result, Indianapolis Public Schools officials are working to come to an agreement that will get that chamber’s support.

A separate measure to fund building improvements was announced by the district in June and incorporated into the chamber plan. That tax increase would raise $52 million for building improvements, primarily focused on safety. That’s about one-quarter of the initial proposal.