School Finance

Wealthiest schools thrive under new state budget while poor ones mostly get less

PHOTO: Scott Elliott
On the last day of the 2016 legislative session, lawmakers move ahead with plans to ditch ISTEP.

The effect of the new school funding formula approved by the Indiana legislature tonight can be summed up by the effect on the richest and poorest communities.

Of the 25 school districts with the highest family income, all of them will get more per-student state aid over the next two years.

But what about the 25 with the lowest family income? Just 12 of them get more money in 2016 and 2017 across the board — in overall state aid and per-student aid. The rest get less in one or both areas.

Sen. Greg Taylor, D-Indianapolis, said it’s just not a sustainable model, especially for districts like Indianapolis Public Schools.

“We have 30,000 kids in my school district who are going to be asked to perform at a high level with less money than their surrounding school districts,” Taylor said. “One day we are going to have to come back here and recognize that that’s not going to happen with the lack of investment we have put in our children.”

Poor districts, in many cases, were just glad they weren’t hit harder. They faired worse in earlier draft budgets. But across the state, even poor districts that got more money saw smaller gains compared to their wealthier counterparts.

For example, Indianapolis Public Schools would’ve seen a 6 percent loss in funding in the House’s plan, a 4.2 percent loss in the Senate plan, but just a 2.8 percent loss in the new draft — a cut of about $17 million over two years. The final version of the budget, which next heads to Gov. Mike Pence, was the only scenario that included a funding bump for IPS — a 0.4 percent gain in per-student aid over two years to $7,708 per-student from $7,678.

But the budget enrollment projections struck IPS officials as pessimistic, suggesting the district would lose about 1,000 students during the next two years. IPS enrollment has been mostly stable for the past three years, and there is reason to believe it will remain so or even grow.

The district also recently decided to partner with Charter Schools USA to add grade levels at Emma Donnan Middle School, with a goal of recruiting up to 300 new students to the school that IPS could count. CSUSA operates the middle school independently after the school was taken over by the state for low test scores in 2012.

If IPS is right and enrollment remains steady, district officials estimate it could save $10 million over two years, reducing the lost state aid to just $6.5 million.

Other Indianapolis schools fair better.

All Marion County school districts besides IPS get more money from the state under the budget plan, with Franklin Township and Perry Township leading with 6.7 percent increases in overall funding. Both districts’ boosts can be attributed in part to growing student populations.

Wealthy Central Indiana school districts did especially well. Hamilton Southeastern schools, for example, would jump 12.4 percent in state aid over two years, while Westfield-Washington would jump 11.5 percent. Carmel and Zionsville will see gains of 9.1 percent and 9.6 percent.

A comparison of two of the state’s poorest districts, East Chicago and Gary schools, shows their overall state aid being reduced by 2 percent and 6.7 percent, respectively. Sen. Karen Tallian, D-Portage, said the state shouldn’t underestimate urban schools — that only makes things worse in the future.

“We make this self-fulfilling paradigm that we assume that Indianapolis, Gary, — big city schools — are going to lose students, so we fund them with less money,” Tallian said. “That makes them less able to fund good education, and then more kids really do leave.”

Yet Republican supporters of the budget plan say all schools should be on more equal footing when it comes to state aid. They have argued the poorest districts should get more money than the richest, but that today they get too much extra.

House Ways and Means Committee Chairman Rep. Tim Brown, R-Crawfordsville, hailed the budget plan for giving a big boost to schools while meeting other priorities. He cited Pence’s call in January for 2015 to be an “education session” for the legislature.

“Mission accomplished,” he said. “Every child has an opportunity across the state of Indiana.”

Rep. Greg Porter, D-Indianapolis, likened Brown’s comments to President George W. Bush’s much-mocked premature proclamation of “mission accomplished” in the Iraq War.

“I can remember someone said ‘mission accomplished’ a few years ago on an aircraft carrier, and the mission was not accomplished,” Porter said. “From a Democratic perspective the mission is not accomplished.”

Porter said the new school funding formula would be “devastating” to many Indiana schools, especially those that serve the state’s most vulnerable children.

“There will be job losses in regards to this proposed budget,” he said. “We take a big blow. Hundreds of public school teachers will be terminated, and class sizes will be raised, mostly in our poorest schools.”

More dollars for English language learners were put into the funding formula, and special aid for children living in poverty will be calculated by a new method based on the number of students eligible for food stamps, welfare and foster care. The new draft also funds full-day Kindergarten students, who in the past received less aid, the same as all other students.

Although Taylor voted against the budget, which passed the Senate 40-9 and the House 69-30, he acknowledged that the outcome might’ve easily been different.

“They could’ve lost a lot more,” he said.

Payday coming soon

Pension paybacks for Detroit district employees may show up in March  

Thousands of Detroit district school employees may reap the benefits of a lawsuit over pension funding as soon as March.

School employees who worked for Detroit’s main district between 2010 and 2011 can expect refund checks in their mailboxes soon, district leaders say, but making sure the money ends up in the right place will be difficult.

The reimbursements are the outcome of a controversial move during Gov. Jennifer Granholm’s administration to withhold additional money from employees’ paychecks to pay for retiree health care benefits.

The Michigan Supreme Court upheld a ruling by the state Court of Appeals that the withdrawals were unconstitutional. As a result, the state is giving back $550 million to school employees with interest. The amount employees get depends on what they were paid at the time, either 1.5 or 3 percent of their salary.

While every district in the state is charged with handling the refunds, the Detroit district has a larger burden, tasked with processing 13,416 refunds totaling $28.9 million.

Some of the employees no longer work for the district and do not have an updated address on file, the district said, so employees have been asked to update their information by Feb. 28.

Another challenge: The district is trying to fill five positions in the financial department, the area charged with issuing the checks.

Jeremy Vidito, the district’s chief financial officer, said the state did not allocate extra dollars for additional support staff to help with the task, so the department is working overtime to process the checks.

“It’s prioritizing,” he said. “So there are items that we are going to push back to make sure this happens. It’s also … asking people to do more with less.”

Despite the challenges, the district said it plans to begin mailing checks starting the third week of March.

 

heated discussion

Aurora budget talks devolve into charter school spat

Aurora Public Schools board of directors and Superintendent Rico Munn, center.

Aurora isn’t facing major budget cuts, and school board members don’t have any significant disagreements with their superintendent’s budget priorities, but that didn’t stop a school board meeting this week from turning into a heated back and forth. At issue: the impact of charter schools, how new board members got elected, and what that says about what the community wants.

Four of the seven school board members were elected in November as part of a union-supported slate, sometimes speaking against charter schools. Many have been wondering what changes the new board will bring for the fifth largest district in the state, and Tuesday’s discussion shined a light on some rising tensions about different priorities.

The budget discussion was the last agenda item for the school board. District staff and Superintendent Rico Munn intended for the school board to provide guidance on whether their proposed budget priorities were the right ones.

Union-backed members who were sworn in in November pressed the superintendent and staff to talk about how charter schools would impact the district’s long-term finances.

“What I’ve always said is that charter schools have a negative impact on our financial model,” Munn said.

Veteran board member Dan Jorgensen asked Munn to clarify his statement.

“I don’t say necessarily it’s negative to the district, I say it’s negative to our financial model,” Munn said. “I just think that’s a fact.”

Then the conversation turned to the community. Board member Monica Colbert, one of the longer-serving board members, said the district is changing whether or not the board agrees because the community is demanding something different. The community “came out in droves” asking for the DSST charter school, she said.

Board President Marques Ivey, who was elected in November, disagreed.

“Not (to) this group that was voted in, I guess,” Ivey said. “I have to look at it in that way as well.”

Jorgensen supported Colbert’s argument.

“I think often times our perspective is also skewed by who we engage with, of course,” Jorgensen said. “But we need to be mindful we are here to represent our whole community.”

He added that a small fraction of Aurora’s registered voters voted in the school board election, saying, “there’s no mandate here at this table.”

When Ivey tried to dispute the numbers, Jorgensen continued.

“It’s not a debate,” he said. “That’s not the point. No one sits here based on — I mean there’s a lot of factors that contributed, like half a million dollars behind us or this or that.”

November’s election included large spending from the union and from pro-reform groups. The union slate of board members raised less money on their individual campaigns, but had the most outside help from union spending, totaling more than $225,000.

“I’m not going to let you get away with that shot,” Ivey said, stopping Jorgensen.

Then another board member stepped in to change the subject and ask for a word change on Munn’s list of budget priorities.

The district isn’t expecting to make significant budget cuts this coming school year, but in order to pay for some new directives the school board would like to see, district staff must find places to shrink the budget to make room.

The proposed priorities include being able to attract and retain staff, addressing inequalities, and funding work around social, emotional and behavioral needs. More specifically, one of the changes the district is studying is whether they can afford to create a centralized language office to make it easier for families and staff to access translation and interpretation help. It was a change several parents and community members showed up to the meeting to ask for.

Board members did not have major objections to the superintendent’s proposed priorities.

During the self-evaluation period at the end of the meeting, board member Kevin Cox said things aren’t as bad as they look.

“We’re building cohesion despite what may seem like heated discussions,” Cox said.

Things could be worse, he added – he’s heard of other groups getting in fist fights.

Correction: A quote in this story was changed to remove an expletive after Chalkbeat reviewed a higher quality audio recording of the meeting.