Hick makes his pitch

Hickenlooper: Schools must share burden of state budget balancing

Gov. John Hickenlooper (Craig F. Walker, The Denver Post)

Gov. John Hickenlooper told legislators Thursday that K-12 spending needs to share the pain of a tight state budget situation along with other big-ticket programs.

“When we looked at making the cuts we thought that we should try to share that pain … everybody should feel that constriction. It seems equitable,” the governor told members of the Joint Budget Committee and other lawmakers.

The remarks came in response to a question as Hickenlooper and budget director Henry Sobanet presented his proposed 2016-17 budget, an annual event that starts the run-up to the next legislative session.

The administration actually isn’t proposing to cut K-12 spending from 2015-16 levels. Average per-pupil funding would increase to $7,397 from this year’s $7,284, up 1.4 percent. But the governor is proposing to increase the school funding shortfall to $905 million from $855 million.

That shortfall, known as the negative factor, is the difference between actual school spending and what support would be under full application of the state’s funding formula. The negative factor is a major sore point for school districts.

Four big demands – required K-12 increases, $289 million in required tax refunds, refilling the state reserve and paying higher Medicaid costs – add up to $830 million in 2016-17. But there’s only $457 million in projected new revenue available to meet those costs.

“With a deficit of $373 million, you’re going to see reductions or inability to grow in the top four areas,” said Sobanet.

“As we look forward … at least keeping the negative factor steady should be a priority,” the governor said.

The way to control the negative factor and ease pressure on other parts of the budget is to change a program called the hospital provider fee, he argued. While it isn’t a general tax, the fee counts against the annual constitutional revenue limit, triggering those taxpayer refunds.

“The current structure of the hospital fee will prevent us from meeting our most basic needs,” Hickenlooper said. “We should at least be able to use the resources we have.”

New Joint Budget Committee chair Millie Hamner, a Democratic House member from Dillon, asked what happens in future years if lawmakers don’t approve Hickenlooper’s proposal to reclassify the fee so it doesn’t count against the revenue limit.

“It’s hard to see a scenario … where the negative factor doesn’t grow a little bit,” Sobanet said.

Hickenlooper also was asked how the public can be educated about the state’s fiscal restrictions and be persuaded to change contradictory constitutional requirements.

“Funding is critical. We need to get the facts out to people. But at the same time we’ve also got to find innovation in education,” the governor replied.

Higher education, which unlike K-12 would take actual cuts under the governor’s budget, got scant mention during the presentation.

“We’ve been proud to increase support for resident undergraduate students” in the last two years, Hickenlooper said. “It is not possible to continue current levels of spending into 2016-17.” … That “will likely result in higher tuition increases at many institutions.”

School funding also on superintendents’ minds

Budget problems also got an airing earlier Thursday at the annual superintendent forum sponsored by the Public Education & Business Coalition.

“We’ve been in a slow downward spiral for 20 years,” said Boulder Valley Superintendent Bruce Messinger. Paying taxpayer refunds while squeezing K-12 is “just wrong, and we need to make a change.”

New Littleton Superintendent Brian Ewert said that when he explains the fiscal problem to district residents, “They are shocked and appalled that we are going to give refunds.”

Chris Gdowski, superintendent of the Adams 12-Five Star district, said districts have been economizing for years. “We’ve ridden that horse as far as we can in Adams 12. So the only thing that’s going to help us down the road … is to get more money into the system.”

behind the budget

With House plan that adds money for vulnerable kids, all Indianapolis districts would gain

PHOTO: Scott Elliott
Perry Township, along with the other Marion County districts, would see more per-student funding if a House budget proposal moves forward.

Every district in Indianapolis is tentatively slated to get more state dollars per student under House Republicans’ 2019 budget plan released this week — exceeding some school leaders’ expectations.

For the most part, new money added to the budget to fund each student along with higher enrollment estimates are driving the increases. But even though some districts are projected to lose students, they would still get more money because of changes to Indiana’s funding formula that add money for vulnerable students and because lawmakers put more money in the budget overall.

“I just didn’t think they’d be able to reach that level when they started the session,” said Patrick Mapes, superintendent in Perry Township. “It’s very much appreciated.”

In Indianapolis Public Schools, the city’s largest school district, per-student funding is expected to go up more than 3 percent to $8,029 from $7,764. Overall, the district would see about 4 percent more in total state dollars. Compared to other districts, IPS receives more per student in part because of the number of students there from low-income families. Having more English-learners and students with disabilities can also bring in additional funding per-student.

“There are still too many moving pieces in other parts of the comprehensive budget proposal to get a clear picture of what this will ultimately mean for our students and employees,” an IPS spokeswoman said in an emailed statement.

The estimates are far from final, as the Senate will still offer its own budget draft and lawmakers will eventually have to come to a compromise. But the House draft, which easily passed out of the Ways and Means Committee on Monday, will likely see support from the full House in the coming week.

This year, district funding estimates could be even more volatile because of problems with a calculation that drives extra aid to districts with larger shares of students from low-income families. It’s unclear how this might affect schools because the calculations were not changed from last year.

“We used the numbers that we felt gave schools the most realistic proposal,” said House Ways & Means Chairman Todd Huston. He said that he was not sure when more accurate projections would be available, but House Republican staff was working with other state agencies to dig into the problem.

The budget draft proposes increasing Indiana’s contributions to schools by $461 million — or 4.3 percent — through 2021, a little more than increases in years past. The basic per-student funding that all districts get would jump from $5,352 per student this year to $5,442 per student in 2020, and $5,549 per student in 2021.

House lawmakers also made some big overall changes to how schools are funded that do more to support some of the state’s most vulnerable students.

Funding for preschool for students with disabilities increased for the first time in more than 25 years, going from $2,750 per student currently, to $2,875 per student in 2020, and $3,000 per student by 2021. In 2018, about 13,000 students qualified for the program, costing the state about $36 million. The increased grant would up those totals to about $37.3 million in 2020 and $39 million in 2021.

The budget draft would also send more money to educate students learning English as a new language for the fourth year in a row. Last year, lawmakers set aside about $32 million. Over the next two years, there’d be more than $40 million available for grants, at $325 per student, up from $300 previously.

Higher per-student grants for English learners would help the district shift more money to teachers and other employees, said Mapes, the Perry Township superintendent. Raising teacher salaries has been a hot topic during this year’s legislative session, and while money is not specifically earmarked for raises in the House budget plan, Mapes said it doesn’t need to be.

“That’s local control,” Mapes said. “We have an elected school board whose job is to make that decision for each school corporation in the state. It’s not the job of the legislature to direct down a salary schedule.”

In Beech Grove, the funding forecast is slightly less optimistic — the district is the only in the county projected to lose funding overall through 2021, by a small margin of less than 1 percent. That’s driven by a projected loss of about 116 students out of a total of 3,033.

“We all need to take three steps back and not panic because … there’s a factor here that’s real critical — the standpoint that our enrollment has gone up for nine straight years until this year,” said Paul Kaiser, superintendent in the district. Lawmakers “are estimating our enrollment is going to continue to drop.”

Kaiser noted that the district does have a high rate of students transferring in from outside the district — Beech Grove had the second highest rate of students transferring into the district last year, with almost 1,200 students coming in. Like the rest of the county, Beech Grove is expected to get more dollars per student, so if transfers work out like Kaiser expects, the additional money would turn things around. He said he isn’t sure why enrollment was down last year.

“We’re hoping last year’s drop in enrollment was a blip on the horizon,” Kaiser said. “And if it’s not, then we’ll have to decide what we want to do.”

Part of Kaiser’s strategy is going to district voters in the fall to ask them to approve a tax increase — a move many school districts across the state, including IPS, are increasingly making to bring in more revenue.

One group that would see reductions under the House plan were virtual schools and virtual programs operated by school districts — they were cut from 100 percent of what students in traditional schools get to 90 percent, equivalent with students at virtual charter schools.

Lawmakers made the change in response to a rapidly growing virtual school in the Union school district, near Modoc, helped throw off school funding estimates in 2017. Even with the funding cut, budget projections show Union still would receive more state money, driven largely by growing enrollment.

House Republican staff did not confirm whether the change in all district-based virtual school funding resulted in cost-savings for the state.

Budget woes

In budget address, Illinois governor J.B. Pritzker proposes modest education increases

J.B. Pritzker speaks during a round table discussion with high school students at a creative workspace for women on October 1, 2018 in Chicago, Illinois.

Even while calling his proposed budget “austere” and speaking plainly about the yawning deficit he inherited, Illinois’ new governor, J.B. Pritzker, struck an optimistic chord when describing how he plans to plow more money into schools.

His fiscal year 2020 budget would allocate a total of $7.2 billion for K-12 funding, including an extra $25 million in addition to the mandated $350 million annual minimum increase under the state’s funding formula.

“There’s a focus here on trying to not only rebuild from the damage that was done over the last four years but also to set us up for growing the economy, which happens in part because of our investments in education,” Pritzker said, nodding to a nearly two-year budget stalemate under his predecessor, Republican Bruce Rauner, that left the state with billions in unpaid bills.

During Wednesday’s speech, the governor said the long-term solution to the state’s budget deficits  was a progressive income tax that would take more money from Illinois’ wealthiest residents.

In the shorter term, though, Pritzker’s budget proposal includes an additional $25 million for Illinois schools, an increase of $21 million in special education grants, and a $5 million boost for career and technical education programs for high school students.

Also in the proposal: $50 million in need-based college grants, another $35 million in university scholarships, and $2 million to cover waived fees for low-income students taking Advanced Placement tests.

Pritzker’s budget would allocate an additional $100 million to the Early Childhood Block Grant. That would bring the state investment in early childhood education to $594 million next year.

The governor Wednesday also proposed freezing a tax credit for businesses and individuals who contributed scholarships for private schools. Critics argued the program cut into state income taxes that would otherwise help fund public schools. Supporters, including Rauner, said it was one of the few ways struggling families could afford private schools.

Pritzker noted that given Illinois’ economic reality, there is a limit to how much cost-cutting alone could do. Instead, he promised to pass a budget that would include an increase in funding across the board as a way to invest in the state’s future, with a particular focus on education.

“We must stop slashing programs that build future prosperity,” Pritzker said in his budget address. “Over the long term, we must make investments in education, livable wages, innovative human service programs and job training.”

In unveiling his budget, the governor spoke plainly about the state’s dire fiscal situation: a $3.2 billion budget deficit and $15 billion in debt from unpaid bills — an amount that is equal to funding “free four-year university tuition for more than 12,000 students,” he said.

Nearly two years without a state budget under the previous governor prompted a massive backlog of funding in the K-12 education budget that the state is still struggling to fill, on top of an $8.1 billion backlog of unpaid bills across state agencies.

A 2017 overhaul in the formula Illinois uses to fund schools put the state on a 10-year path to closing the more than $6.8 billion gap between what it spends on K-12 public schools and the projected cost of adequate school funding. In January, the state board of education asked for $15 billion in public schools funding.

“It’s a very teensy step and better an increase than not,” Wendy Katten with Raise Your Hand Action, a parent group advocating for public education, said of the increased funding for K-12 schools. “But that’s nowhere near the $7 billion that’s needed for basic adequacy, let alone the $2 billion needed for [Chicago Public Schools].”   

Pritzker’s proposed additions are modest, to be sure, but unions representing teachers in Chicago and statewide, as well as disability advocates, said any additional investment in education is most welcome.

“It’s clear that he understands the importance of great public schools and higher education and is committed to fulfilling the state’s responsibility to invest in them,” the president of the Illinois Federation of Teachers, Dan Montgomery, said.

And the Chicago Teachers Union asked that Chicago Public Schools to use any extra state funding to lower class sizes and increase special education staffing.

“The increase in evidence-based funding over the statutory minimum recognizes that Illinois’ challenges with education funding equity are fundamentally rooted in the need to drive more resources to students, like those in CPS, who have suffered from decades of insufficient and unequal school funding,” Jesse Sharkey, president of the union, said.

Chris Yun, the education policy analyst with Access Living, which advocates for people with disabilities, said she was heartened to see a bump for special education funding, noting: “Students with disabilities are often forgotten because the number is much less than general education students. We have a long way to go, but this is just step one.”

Pritzker told Chalkbeat in October that contributing more money to education would require solving the state’s longstanding budget woes. At that time, Illinois was expected to enter fiscal year 2019 with a budget deficit of more than $1 billion. That figure has now more than tripled.

Its problems are compounded significantly by its pension responsibilities, making it increasingly difficult to allocate money to other needs, said Ralph Martire, director of the Center for Tax and Budget Accountability.

“The payments are jumping at levels our system can’t afford,” Martire said.

Pritzker on Wednesday said he would “smooth the pension ramp by modestly extending it,” which hints at a plan to push payments off further.

While Pritzker’s progressive taxation plan has a steady thrum of support from Democratic lawmakers, the measure has not yet passed the state legislature.

Pritzker acknowledged that his 2020 budget was built on a tax structure that he still considered regressive and said he hoped to change that going forward.  

“Not only is our tax system unfair, it’s also inadequate to solve our long-term financial challenges,” he said. “Make no bones about it, I choose to stand up for working families and will lead the charge to finally enact a fair tax system in Illinois.”

Cassie Creswell, a board member of public education advocacy group Raise Your Hand Action, said the budget address was a positive indicator of Pritzker’s support for revamping taxation, but feared “the rates that will be proposed to make it politically palatable won’t make it the rate we need to fund stuff in the state.”