Rich school, poor school: IPS push to even out funding could bring big changes

PHOTO: Alan Petersime
Students gather in the gym on a Wednesday morning in February at IPS School 27, a Center For Inquiry magnet school.

The students at Indianapolis Public School 15 face significant challenges. Most are poor, a third still need to learn English as a new language and three out of five have failed state tests every year since 2010.

Yet even with needs like those that are more challenging than most, this struggling school on Indianapolis’ east side gets less money from the district per student than many other IPS schools. It has about $4,652 per student to educate its children, according to the proposed district budget for 2015.

It’s a different story at School 84, an elite Center for Inquiry magnet school on the north side that attracts many of the city’s wealthiest children.

School 84 gets $5,955 per pupil from the Indianapolis Public Schools — about 28 percent more than School 15 — even though fewer kids need the special attention that comes with poverty and the demands of learning English as a new language. Just 8.2 percent of School 84 kids come from families that are poor enough to qualify for free or reduced-price lunch, a common poverty measure, and less than 1 percent are English language learners. The school posted some of the highest test scores in the city last year, earning an A on its state report card.

It’s an inequity playing out across the district that some IPS board members say they want to fix.

“One of the board’s core commitments and beliefs is to ensure that we have access and equity for all students across the district,” Superintendent Lewis Ferebee said.

To do so, a budget proposal that Ferebee and the board are considering would radically change the way Indianapolis schools are funded.

The plan could have far-reaching consequences for students and teachers across the city, with some schools coming out ahead — and others facing difficult choices as they find their budgets slashed.

Depending on what method the board decides to use to equalize funding, the plan could mean some teachers — especially veterans — might have to move to new schools. Struggling schools like School 15 could expect more money to pay for needed services, but some of the city’s most successful schools — places like School 84 —  might lose significant dollars that they use now to pay for their special programs and staff.

“It kind of scares me,” Rhondalyn Cornett, president of the the district’s teachers union, said of the weighted-budgeting proposal.

If schools suddenly lose funds to pay for experienced teachers, principals may be forced to make choices that could harm their schools, she said.

“I’m really concerned with people being able to do what’s right to meet their budgets,” Cornett said.

The plan

The new funding model IPS is considering, called “weighted” or “student-based” budgeting, has become increasingly popular in urban districts over the last two decades.

The method is supposed to distribute funds to schools based on the needs of students in each building. Schools get extra funding for students with greater challenges, like those who need special education services or those who are learning English as a new language, and principals are given more control over school spending decisions. School leaders, for example, can decide how much they want to invest in music courses or teacher training. More of one could mean less of the other.

The model is a departure from traditional school funding in which schools receive set amounts for curriculum or supplies, and teacher salaries are paid by the district without considering whether a school has mostly highly paid veterans or novices at the bottom of the pay scale.

Teacher salaries account for most of the difference in funding among IPS schools. That’s why School 84, where the average teacher makes $56,325 per year, gets more money per student than School 15 where the average teacher salary is $43,713.

Teacher salaries are one reason weighted funding has been controversial where it’s been tried, since some approaches to the weighted model may encourage principals to push out experienced teachers in order to hire younger teachers for less money.

As Indianapolis considers a shift to the weighted model, teachers and their union worry that veteran educators will be targeted to save costs. Parents at some of the city’s top schools, which often have the highest numbers of experienced teachers, worry the new model could mean upheaval if large numbers of teachers choose to retire or are forced to change schools.

Weighted budgeting is currently used in dozens of cities — from pioneers like Houston to newer converts like Cleveland.

But the delicate politics around who gets how much money have prevented many districts from fully employing the model. In Chicago, the district struggled to phase in weighted budgeting for nearly a decade, finally implementing it district-wide in 2013, but magnet and selective enrollment schools are funded separately.

In Seattle, the highest profile district to try and then abandon weighted budgeting, principals only had control over about 10 percent of their budgets, a district official told Education Week in 2012.

In districts that have more fully embraced weighted budgeting, including Hartford, Boston and Houston, 40-45 percent of district budgets are allocated on a per student basis, according to a recent report from the Edunomics Lab.

How the model would be implemented in Indianapolis is still unclear. The district aims to develop a weighted plan that it would first try with a pilot group of six to eight schools next year before expanding it more broadly.

The pilot schools, which have not yet been selected, would be a mix of elementary, secondary and magnet schools with that the district decides are ready to take on more self-management. Those schools would get more control over their budgets but, in the short term, they are unlikely to feel the pain of weighted budgeting. The district says it has no plans to change funding levels during the pilot phase.

Weighted budgeting is part of Ferebee’s larger effort to grant greater control to principals. He wants to create schools where local leaders manage curriculum, staffing and teacher training.

The district aims to give principals as much control over their budgets as it can while complying with state law, Ferebee said.

“Great leaders need to be making those decisions about their schools,” Ferebee said. “They have the local context. They know their students. We want to have the ability to make decisions about how to support them.”

Uneven funding

The logic behind weighted budgeting seems simple: make sure all schools get the resources they need to meet the needs of their students.

Funding inequities in Indianapolis are not just between schools that serve wealthier students and those that serve poor students. Some schools with larger numbers of poor children do have experienced staff that are well-paid. Not all magnet schools serve mostly wealthy kids, either. Some have large numbers of kids with significant barriers to learning.

But economics does play a role. A comparison of the five highest and lowest poverty schools in the district from an Urban Leaders Fellowship report found that the schools with the fewest poor students receive 22 percent more per year on average from the district than schools with the most poor children — a difference of $1,329 per student.

The current system isn’t fair, said Yvonne Millbrook, a parent at School 15.

“It’s upsetting,” she said. “They should all get even (funding). I don’t understand how some schools get funded more than others in the same district.”

Millbrook would love to see more money come to School 15, where her fourth-grade daughter receives special education services, but if steering more dollars to schools like School 15 means tinkering with popular, high-scoring schools, the plan could meet with objections — even from board members.

“If you’re (a) good (teacher) and you’ve got the training, your principal doesn’t want to let you go. And we wouldn’t want to ding a school for that,” said IPS Board member Kelly Bentley.

On the other hand, she said, “having all of your experienced staff in one building isn’t equitable to kids across the district.”

Tracy Ross, a parent at School 84, said parents don’t realize what might be coming if weighted budgeting is eventually put in place. She only learned IPS wanted to move toward a new system because she is vice-president of the school’s parent-teacher-student association, where it was discussed. She worries about what will happen if the school loses money.

“We like the way our school is now,” she said.

Impact on schools

Just how fair and equitable the future funding system would be using weighted budgeting is up to the board.

Under weighted budgeting, there are two ways for districts to approach to teacher pay.

One option, which is rarely used because it can cause significant turmoil in school staffing, charges schools the actual cost of the salary of each teacher. That means each school would receive a set budget to hire teachers and buy supplies, forcing principals who hire highly paid veteran teachers to spend more on wages than principals who hire novice teachers making the minimum $40,000. The top step of the pay scale in the new IPS contract is $58,600 but dozens of the most experienced teachers make $70,000 or more.

The other, less radical approach, would charge schools the same amount for all teachers, regardless of their salaries. The cost of a teacher would be based on the average district salary, so schools whose teachers earn more than the average salary would be charged the same amount as schools whose teachers earn less than the average. IPS teachers earned an average salary of $52,384 in 2013-2014, the latest year available from the Indiana Education Employment Relations Board.

The second approach would not have much impact on the status quo. Schools like School 15, which has lower-paid teachers, would still be subsidizing schools like School 84, which has higher-paid teachers, said Marguerite Roza, director of the Edunomics Lab at Georgetown University and an advocate for weighted budgeting. But even the less radical approach to student-based funding could have at least some influence on funding inequities.

For example, it could correct inequities that have resulted in some schools having fewer student per teacher than others, Roza said.

The more modest approach would also allow the district to correct inequities by steering new dollars to schools that are currently not getting their fair share. Bentley noted that the district expects to free up some money over the next few years as it considers closing or consolidating some schools, rents out empty building space and reduces central office spending. She also hopes IPS will attract new students into the district — and the state aid dollars they would bring — by expanding its best programs.

There is is value in even just beginning the weighted funding discussion, Roza said. It could help bring the problem of inequities into the open so they can be addressed.

“Right now (some schools) are over-funded, and no one understands how or why,” she said. “If I’m across the train tracks from another school that’s getting 20 percent more than I am, I’m going to be like, ‘you’re taking my money.’ But right now, we don’t know whose money it is. It’s very confusing.”

Winners and losers

Whatever approach Indianapolis decides to use, if the board votes to proceed with the new funding model, some IPS schools will come out ahead, while others will lose out.

David Rosenberg, a partner at Education Resource Strategies, a consulting firm that’s helping the district plan and pilot weighted budgeting, said the board’s choice comes down to how they want principals to manage.

“I don’t think there’s a single right answer,” Rosenberg said. “It’s more about what do you want your principals to focus on. With average salary, I’m basically freeing principals from thinking about the cost of a teacher and letting them focus only on the effectiveness of a teacher.”

Under the current system, the CFI magnet schools, for example, are able hire as many highly-qualified teachers as they can recruit.

“I value experience, and I can hire experience as a principal because that teacher costs the district more but they don’t cost me more,” said Chris Collier, a CFI co-founder who leads School 84.

But even if the district uses the less dramatic — and less equitable — approach to weighted funding, popular magnets like the CFI and Montessori schools could lose out. The model is designed to give extra funding to schools with the most needy students. Many magnets serve wealthier students with fewer barriers to learning  than the rest of the district.

Specialized magnets could be badly handicapped if they lose funding because they are more expensive to run than an average school, Collier said. Both Montessori and CFI schools, for example, spend extra on the curriculum and training needed to support their unique teaching approaches.

“Whether you are a magnet school or whether you’re a neighborhood school, there are schools that have needs,” Collier said. “Equity doesn’t always mean the same thing. It should mean everybody gets what they need.”

Administrators wait for data

Before the district makes decisions about how to allocate funding among schools, it needs to know just how equitable the current funding system is.

Right now, it doesn’t.

Education Resource Strategies, the district’s consultant, is conducting an analysis of district spending that will be available early next year. That report should give educational leaders and the public a clearer picture of just how wide the divide is between the schools getting the most money and those getting the least.

“The analysis will give an indication of where we are spending our resources and if it is allocated with equity,” Ferebee said. “For example, if a school has struggled persistently with under achievement or there’s a large number of special education students, are we spending more or less to support those students compared to other schools in the district?”

The new system might ultimately be painful for some of the city’s top schools, but board member Mary Ann Sullivan said she plans to vote for what’s fair.

“I want to be able to sleep at night,” she said. “I want to know that our kids that have the greatest need are getting fair and equitable resources to meet their needs.”

School Finance

Indiana lawmakers over-promised money for schools to teach students learning English by nearly $50 million

PHOTO: Shaina Cavazos
Amy Peddie, an English as a new language teacher at Southport High School, helps a student on an assignment in her class.

When Indiana’s legislature wrapped up the state budget in 2017, educators celebrated a record $32 million headed to support students learning English as a new language, including considerable bonuses for schools with the highest concentrations of those students.

But what school leaders didn’t immediately realize was that because of a calculation error, state lawmakers had not budgeted enough money to give the schools the extra dollars they were told to expect — it would have cost another $50 million to pay for the promised bonuses.

“It is a pretty significant difference,” said Kathy Friend, chief financial officer for Fort Wayne schools, which serves about 2,600 English-learners. “We didn’t realize it until after the allocation came out.”

The shortfall appears to have been due to a number of factors. First, more schools than expected applied for the funding to support students who need more intensive services. But the amounts the state promised to fund per student to schools with the largest shares of English-learners were also incorrectly calculated, a spokeswoman for Senate Republicans told Chalkbeat. If the data error had been caught earlier, the staff member said, the numbers promised in the initial budget would more closely reflect the dollars schools ended up receiving.

“It was definitely not intentional,” said Rep. Bob Behning, a Republican from Indianapolis who chairs the House Education Committee, who said he didn’t realize there was an issue until schools approached him in the fall.

It’s not unusual for the state not to fund all of what they initially promised if, for example, enrollment spikes or revenue dips. When that happens, the law says, each district or charter school’s funding amount should be reduced proportionately. But because they were expecting larger bonuses than other districts, large urban public school districts and charter schools that tend to serve bigger shares of students learning English felt the deepest effects of the miscalculation.

Chalkbeat’s review of the funding data shows the state would have had to set aside about $80 million to meet the per-student expectations it set out in the 2017 budget, $47.5 million more than what lawmakers ended up budgeting. The original plan called for increased funding for students learning English to $250 and $300 per-student, depending on the year in question.

In addition to the base amount, districts and charter schools with higher percentages of students were supposed to get even more on top of that — upwards of $900 per student if they had between 5 percent and 18 percent of their population learning English, and upwards of $1,200 if it was more than 18 percent. In actuality, the schools got between $140 and $177 per-student in 2018 on top of the base, and $22 and $28 per-student extra for 2019.

Behning said lawmakers had an opportunity to backfill the dollars to schools with proportionately more English-learners, but they did not. Last year, a highly publicized shortfall in basic state aid to schools made a splash so big that lawmakers came together in a non-budget year to ensure it was filled, approving another $100 million to go to schools’ general funds.

Lawmakers decided not to bump up the funding for English language-learners because while the specifics of the calculations were based on incorrect data, the Senate spokeswoman said, $32 million was the correct total amount the state wanted to spend.

To be sure, all Indiana schools with English-learners received more money per-student from the state under the 2017 budget than in years prior. Friend said she and her colleagues were happy that lawmakers had upped the funding, recognizing the needs of districts like hers that have many students learning English.

The incorrect budget calculation would have given the district about $2 million more over the two years than the $1.5 million they received. But Friend said the difference in expected versus received dollars doesn’t mean the needs of Fort Wayne’s English-learners aren’t being met.

Rather, school leaders have to use more money from their overall state funding to provide the needed services, so across the board, there’s less to go around. Friend said the district spends $4.5 million on English-learners from its general fund. Some additional money comes from the federal government or local sources. Much of the English-learner-specific money the district gets from the state goes toward paying teachers and teaching assistants, with some also going to pay for instructional materials, interpreters used to communicate with parents, and teacher training.

“We aren’t going to make a choice for what we need to do for these students based on how much money we get,” Friend said. “We have to do what we have to do to serve them. What (the extra funding) does is it relieves the general fund for all the other non-ELL students.”

But, it’s also not a small sum, she said. In 2018, Friend said, the district thought it would receive three-quarters of a million dollars more than it did.

“You can’t sneeze at $756,000,” Friend said. “That’s a lot of money that just plays into the overall program or planning that we have as a district.”

In Marion County, several districts were affected, including Perry Township, which saw the biggest difference in actual vs. expected dollars of any district or charter school in the state. Chalkbeat’s analysis shows the district could have expected about $9 million under the incorrect formula. State data shows it received about $2.6 million. Indianapolis Public Schools, the state’s largest district, received about $2.8 million, more than $6 million less than anticipated.

State Superintendent Jennifer McCormick has called for more funding for English-learners next year, upping the current $300 per-student amount to $450 per-student. But in a year when lawmakers are already saying revenue is exceptionally tight, it’s not clear this funding will be a priority as it competes with teacher pay, preschool, and funding for the Department of Child Services.

Lawmakers have taken major steps to increase ELL funding in years past. After a Chalkbeat project showed how schools were increasingly trying to serve growing numbers of English-learners across the city, the legislature more than doubled funding in 2015 to about $21 million, up from $10 million in 2013. Since 2006, the total number of students learning English in Indiana schools has increased by 77 percent. Today, public schools enroll 47,672 students learning English as a new language.

At what cost

Adams 14 looking for grants first, as it prepares to pay for an external manager

First grade students practice reading in Spanish in their biliteracy classroom at Dupont Elementary School in Adams 14. (Photo by Yesenia Robles, Chalkbeat)

About to embark on a search for a manager to run its district, Adams 14 officials have been looking at how to pay for that external management.

Although the state ordered that the district hand over management to a third party, following years of low performance, the order doesn’t come with money. Many community members have been wondering where the funds will come from.

Sean Milner, the district’s executive director of budget, operations and construction, said the best guess district officials have right now is that external management could cost $600,000 per year.

The cost of the contract isn’t yet clear. It’s hard to even estimate the cost since Adams 14 is the first district the state Board of Education has ordered to seek outside management.

The actual cost won’t be pinned down until after a group is selected and a contract is negotiated. The district will call for proposals requesting to know the qualifications of interested outside groups, but those will not include the cost of their work. The Colorado State Board of Education must vote to approve the selected manager before the district proceeds with a contract.

It’s possible the district will get help, at least to cover a portion of the management costs.

Adams 14 officials already applied to the state for a grant of up to $200,000 per year. There are no guarantees that Adams 14 will get that money, as they are competing with other districts that need help improving.

Colorado Department of Education officials would not comment on applications under review, but said that districts like Adams 14 that are following State Board directives receive priority for what the state calls Transformation grant dollars.

Officials are also searching for other grants to cover another $200,000. If they are successful, that could leave about $200,000 for the district to cover.

District officials said they hope that by shifting money they might be able to free up enough money from the general fund, without having to make large budget cuts. Work on the budget for 2019-20 is just beginning.

And if need be, district officials said they have informally received the school board’s verbal approval to use some of the district’s $14 million reserves.

So far, officials have looked at other districts that have gone through similar contracts in Indiana and Massachusetts. Those districts are larger than Adams 14’s 7,500-student-district. In their estimates, Adams 14 officials are also considering there may be extra costs associated if a selected partner isn’t local. The possibility also exists that Adams 14 may choose a public entity such as a school district, (Mapleton has already expressed interest), and those contracts could cost less.

Community members have asked if certain district positions, especially that of the superintendent, will duplicates the job of the external manager. Board member Bill Hyde wondered at a public board meeting earlier this year if the district would be paying twice for the same work.

Just earlier this year, the Adams 14 school board raised Superintendent Javier Abrego’s annual salary to $169,125.

The school board, which retained ultimate authority to hire or fire anyone in the district, may have to consider district positions as it finalizes the 2019-20 budget. Or the external manager, once on board, could make recommendations about staffing.

The state order requires that the district’s contract with an external manager start by July, but district officials are planning for an earlier start, potentially in March or April.

If that happens, the district would amend the current school year’s $130 million budget to use curriculum funds to pay for the outside manager for the remainder of this school year.

Officials said they’re being conservative in new spending, given that whoever comes in to run the district soon might have new ideas about programs or curriculum.

“We’re not stopping anything we have in progress,” Milner said. Some teacher training for curriculum still has to happen, for instance, he said. “But if there were new items to put in place, at this time we’re kind of holding off.”