Dividing the dollars

Millions of extra dollars go to Indianapolis magnet schools that have fewer poor students

PHOTO: Shaina Cavazos
Students in IPS School 91's multi-age first-, second- and third-grade classroom work on math activities.

Indianapolis Public Schools leaders recently overhauled school budgets in a bid to give more money to schools with poor students. At the same time, they quietly sent more than $6.5 million extra to 17 schools — including the district’s most affluent campuses.

That money went to special programs that often attract middle-class families in the form of about $700 extra on average per student, according to a Chalkbeat analysis. That’s substantially more than the $500 bonus the district gives to schools for each student in poverty.

Those dollars are significant in a district strapped for cash: Spread out evenly, the $6.5 million could send all schools about $250 more per student.

The bonuses also highlight a challenge district leaders often face when trying to make school funding fairer: not alienating families at schools that have long received different resources — and who might otherwise choose private schools or the suburbs.

Critics say the bonuses could work against the district’s goal of directing more resources to schools that need the most help.

“If you put more money into higher-achieving schools, your budget strategy, whether you will say it out loud or not, is to expand the achievement gap,” said Marguerite Roza, a Georgetown University professor who studies school finance.

District leaders defend the extra money as essential for special programs — which have focus areas such as Montessori, the arts, or career and technical education — because they cost more to run and would be harmed if they lost funding.

“We did not want to adversely impact the operations of those programs,” Superintendent Lewis Ferebee said.

But giving schools funding based on their programs is one thing that IPS’s new budget system was supposed to prevent. Until this year, the district awarded funds to schools based on an assortment of reasons, including the programs schools offer. In theory, the new student-based budgeting process, on the other hand, is supposed to funnel money to schools based on the needs of individual students.

Read: IPS’ new budget plan is supposed to give more money to poor schools. Here’s how it works.

The district designed some extra money to be temporary under the new budget plan so that schools wouldn’t experience a sudden drop in funding. But officials have not said whether the bonuses to special programs will lessen or disappear over time.

The 17 schools receiving extra money run the gamut. Their demographics vary, and some of the schools are low-performing. But on average, the passing rates on state tests are significantly higher than district averages, while the average poverty rate is far lower — 58 percent versus 78 percent. The amount of money they receive also varies widely.

(Click here to see Chalkbeat’s full analysis, which combined choice programs that do not receive extra money with the district’s other campuses. The projected poverty rate provided by the district does not include students in prekindergarten or self-contained special education classrooms, though those students are included in the total enrollment.)

Unlike neighborhood schools, families choose them, and the vast majority accept students by lottery.

Ferebee said he does not see spending more on choice programs as taking money away from other schools. He noted that the district also gives extra money to schools that have historically struggled. Several schools in a district-led turnaround effort called a transformation zone, for example, also get extra funding.

Plus, all families in the district have access to choice programs, he added.

“I would be more concerned if we didn’t open those programs up to all students, and didn’t provide transportation to all students,” Ferebee said. “But we do.”

The district has also worked to make sure less affluent families have access to choice programs. Last fall, the IPS board reduced the number of families who get priority because they live near a school and reserved seats for families who apply later in the year because data showed low-income families were more likely to apply late.

But for now, many of the schools that get extra money for choice programs are far more likely to educate middle-class students.

That’s likely a reflection of a key challenge for IPS and other urban districts. In states like Indiana, where schools get more money for each student they enroll, winning over parents is essential to staying financially viable. But the kind of programming — such as Montessori and International Baccalaureate schools — that can attract families who might choose private schools or move to the suburbs can be expensive because it often requires extra staff or training.

Carrie Stewart, cofounder of Afton Partners, which consults with districts on financial strategies. She said it is common for districts to give extra funding to schools with special programs.

Schools that offer the IB program, for example, must meet strict staffing and training requirements. “It’s very hard to run them at the same price tag as a typical school,” she said, which means they need more funding.

“Is that fair? I mean, I don’t know,” she added. But if the district doesn’t offer the programs at all, it could lose families to private schools, Stewart said. “Then everybody loses because the district will lose money.”

Dividing the dollars

IPS’ new budget plan is supposed to give more money to poor schools. Here’s how it works.

PHOTO: Kelly Wilkinson / The Star
IPS School 79 has among the lowest per pupil funding in the district.

A year ago, Indianapolis Public Schools embarked on a radical change: Instead of patching together school budgets based on each school’s programs and challenges, district leaders decided to distribute money through a clear formula based on students’ needs.

The overarching principle was that schools with many poor students should get more from the district than schools with middle-class students — and that principals should get to decide how that money is spent.

Now, the district has revealed how each school fared under the new formula, used for the first time this year, and it’s apparent that the impact has been limited so far.

In large part, that’s because the district made efforts to ensure a smooth transition for schools used to a different way of doing things. The district is also still sending millions of dollars directly to schools based on their programming, not their students’ needs.

As a result, many schools with needy students still got less from the district than schools with more middle-class students, according to budget projections provided to Chalkbeat by the district.

For example, last year nearly half the students at School 79, also known as Carl Wilde, were learning English, and the district projected that 86 percent would be in poverty this year. Yet the neighborhood school on the west side has among the lowest per-student funding in the district. It was budgeted to receive $6,104 per student.

At the same time, the Center for Inquiry at School 70 serves a much less needy population, with a projected poverty rate of 42 percent. But the northside magnet school was budgeted to receive $7,438 per student.

10 highest funded schools per pupil in Indianapolis Public Schools

10 lowest funded schools per pupil in Indianapolis Public Schools

Data provided by Indianapolis Public Schools. Graphics by Sam Park.

Over the last decade, student-based allocation — also known as weighted student funding — has been embraced in urban districts across the country, including Boston, Chicago, and Denver. It’s also similar to the model that the Indiana legislature uses to decide how much districts get in state funding.

In part, the aim is to make sure districts send money to schools based on student needs rather than other factors, such as whether a band program is particularly beloved or a school has an influential parent organization.

It’s a problem Carole Craig, a retired IPS principal who is still a vocal advocate for educational equity, saw in action when she worked for the district. Without clear rules driving budget decisions, powerful principals and school communities would lobby for more, she said.

“It was political,” she added.

Student-based allocation is supposed to help solve that problem by creating budgets using rules and making it publicly transparent how much each school is getting and why. For IPS, that’s beginning to happen this year, with schools getting about 60 percent of their funding through the new allocation formula. The rest of their budgets are still being distributed outside that formula.

How much is your school getting per student?

(The per-student funding figures in this story include the money distributed through the student based allocation formula and other sources. The full allocations were provided to Chalkbeat by the district. Most innovation schools, which are managed by outside nonprofits or charter operators, are not receiving funding through the student-based allocation formula. The funding levels for those schools is available on the district website.)

But as the gap between School 79 and School 70 reveals, there are still big disparities in how much is spent per student. They exist because the school district, like others that have shifted to student-based budgeting, took steps to mute the transition to the new funding system.

The district limits how much budgets can grow or shrink so schools won’t lose too much money in one year, using what it’s calling “transition adjustments.” Plus the district is continuing to give schools extra money for many reasons beyond how many students they have and how needy those students are.

At the discretion of Superintendent Lewis Ferebee, the district is propping up the budgets of schools that have struggled academically. Schools are also getting extra money for programs such as Montessori that parents and students choose. The district is also budgeting nearly $1.3 million for schools that would struggle to operate without extra money, typically because of low enrollment.

Finally, the district is providing services outside the new funding formula for students in special education and those who are learning English, because there are legal requirements for meeting student needs. The district also distributes federal funds, which have specific rules, outside the formula.

The impact of all these choices is that some schools with incredibly high needs students are getting shortchanged.

The northside magnet, School 70, receives more than $288,000 in transition funding and nearly $56,000 to support its International Baccalaureate program, an academic approach that emphasizes inquiry-based learning. In contrast, School 79, the neighborhood school serving many immigrants on the west side, is losing out on more than $268,000 it would normally receive based on enrollment and student needs because of the transition adjustment.

Once the transition period is over, that means that School 79 could get a big bump in funding. But it also means that the longer the district takes, the more money the school will miss out on.

The new funding system is revealing funding differences that have long existed, said Craig. But she added, what’s important is what the district does next to make funding fairer.

“I’m going to believe since they’ve spent so much time doing this, there is a plan,” she said. But “how long is it going to take?”

District officials have said that the biggest challenge to student based allocation is declining state revenue. The district simply doesn’t have that much to dole out.

That could change in the future. District officials recently announced that they would likely ask voters to approve a property tax increase of $92 million per year — which adds up to almost $2,900 per student.

It’s not clear how the district would use that cash, in the event that the funding request makes it to voters and they approve.

One of the top priorities, however, is increasing teacher pay, which would likely spread the money across schools without prioritizing those that have comparatively low funding.

“I think it will benefit the climate at every school in the district,” said school board president Mary Ann Sullivan. “It won’t just make things better for a chosen few.”

District leaders also emphasize that the current funding model is not set in stone. It will be reviewed each year, and leaders could decide to change the formula or eliminate some of the outside pools of funding. The school board is expected to review the funding formula for next year this week.

Ferebee told Chalkbeat that he didn’t know how long it would take for the district to increase its use of student-based allocation.

“We want to make sure that we are smart and strategic about how we implement the model,” he said.

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.