School Finance

Indianapolis Public Schools didn’t follow the playbook on its big tax request. Now it’s playing catch-up.

PHOTO: Alan Petersime

Indianapolis Public Schools is getting a do-over.

The school board’s decision to postpone planned ballot measures asking voters to raise taxes for schools — initially to the tune of nearly $1 billion — gives district leaders the chance to build public support alongside key allies in the business community who pressed for the delay.

But this week’s sudden pullback of a pair of referendums is also a setback, raising questions about why leadership of the city’s largest school district couldn’t get it right the first time.

At a time when backers of such measures would typically be beginning their campaigns by explaining the need and shoring up community support, Indianapolis Public Schools officials were juggling a number of other initiatives and not talking much about the prospect of getting the referendums on the ballot. Then, after the board approved going to voters in May, the expected allies never signed on and critics accused the district of not giving enough details.

Put simply, the school district did not follow the playbook for how to successfully win the hearts of taxpayers.

District officials said backpedaling on the referendums — first to reduce the requests from nearly $1 billion to $725 million then to postpone them — showed responsiveness to community concerns.

“What we haven’t done is engage with our community in the way that we should have prior to announcing that we were doing the referenda,” board member Kelly Bentley said at the meeting Monday.

Going forward, she said, the district needs to do more to ensure that community members, parents, and staff understand how desperately the district needs new revenue.

The slow push toward a May vote was brought to an abrupt halt during a board meeting Monday when the head of the Indy Chamber offered to help the district craft its proposal if it delayed until the November election. The board voted 6-0 to delay the referendums, and now has an important ally promising to help as the district tries to regroup.

Indianapolis Public Schools leaders say that with declining state and federal funding, raising local taxes is the only way they can afford regular raises for teachers, the cost of maintaining buildings, and special education services. But some critics have said the district was not being transparent enough about how the money would be spent. The chamber plans to conduct an analysis of the district’s finances to help determine how much money it must seek in the November election.

When Indianapolis’ largest district announced plans to seek more funding from taxpayers in November, it was not a complete surprise. About a year ago, Superintendent Lewis Ferebee told Chalkbeat that the district, after years of running at deficits, would “absolutely” need to pursue a referendum to pay for teacher raises.

In the months after that revelation, however, focus quickly shifted to other priorities — including its fraught decision to close and consolidate high schools. While the board continued regular financial updates at public but poorly attended finance committee meetings, there was little push to explain to the public how bleak the district’s financial future appeared.

Indianapolis Public Schools Chief of Staff Ahmed Young said that to understand the campaign for the referendum, it is important to look at all the other recent changes in the district, including the move to close nearly half the district’s high schools.

Ultimately, he said, the district’s decision to put off the tax measures until November shows it is responding to constituents.

“The most exciting part of what took place last night was the fact that we have this extended period of time to really dive deeper into articulating where the district has been and the impact that the referendums will have on the district for the foreseeable future,” he said Tuesday.

In other districts, successful campaigns to raise tax dollars for schools often start with those deep dives into why the money is needed and how it will be used, with district staff and allies sharing information early and often.

Consultant Steve Klink, who has helped districts with over 40 referendums, said that he could not assess the Indianapolis referendum campaign because he was not familiar with the details. But when he works with districts, he said, they explain to the community why they need more money and assess voter support for tax increases before officially approving ballot measures.

“I call that the mind-numbing data stage, because that’s when you put everything out there,” Klink said. “You go through all the nitty-gritty.”

When Washington Township ran a successful campaign for a referendum in 2016, parent volunteers started organizing about a year before the election, said Stacy Lozer, who co-chaired the political action committee. “You kind of ramp up to a very short period of time, but there was a lot of planning and strategizing that went in behind that,” she said.

Tom King, the co-chair of the political action committee supporting Indianapolis Public Schools bid for more money, said when he was involved with IPS’s successful referendum in 2008, he spent a year campaigning.

Before the school board moved to delay the referendums, King told Chalkbeat that the short timeline the district was working with was a challenge.

“If you’re going to do something like this, it’s always helpful if you’ve got a year lead time to get people out there and get them to see things,” he said. “This is one of those where you’re just going to have to get information out there.”

In the months since the district revealed its bid for more funding, a growing chorus of community members have raised concerns that the district is not providing enough information about such a large potential tax increase. Even some community groups and leaders who are usually allies of the district have been reluctant to back the tax increase.

Before the latest move to delay the referendums, said state Rep. Ed Delaney, a Democrat who represents parts of the school district, said the moribund campaign for the referendum was unlike any he had seen before.

“It’s very, very unusual what is going on,” Delaney said. “This is heartbreaking to me. I wish this institution well.”

Despite the lackluster reception the district’s bid for more money has received so far, Delaney is one of many potential allies for Indianapolis Public Schools. The Indianapolis Urban League had also said it wanted to support the district but was concerned about the potential tax increase.

At the board meeting Monday, Shelley Specchio of MIBOR Realtor Association, which represents Realtors in Central Indiana, said her group would reconsider its opposition to the referendum with more information and more time.

Chamber leaders said it decided to partner with the district in developing a new referendum plan because it had heard concerns from its members about how high the tax increase would be. Instead of opposing the referendums or staying neutral, they offered to work with the district.

“The community does not succeed unless IPS succeeds, and we need to be a partner to help them succeed and achieve their visions for the district,” said Mark Fisher, chief policy officer for the chamber. “Any risk of a loss in a May referendum wasn’t going to do anybody any good.”

Indiana's 2018 legislative session

Indiana lawmakers OK up to $100 million to address funding shortage for schools

PHOTO: Scott Elliott

Indiana lawmakers agreed to dip into reserves to make up a shortfall to get public schools the money they were promised — and they’re trying to make sure it doesn’t happen again.

Both the House and Senate overwhelmingly voted to approve the final plan in House Bill 1001. The bill now heads to Gov. Eric Holcomb’s desk.

Rep. Tim Brown, a co-author of the bill and chairman of the House Ways & Means Committee, said it was necessary to take the uncommon step and have the state to use reserve funds to make up the gap, but in the next budget year making up that difference will be a priority. Brown said he, other lawmakers, and the Legislative Services Agency will work to make sure projections are more accurate going forward.

“Do procedures need to be changed?” Brown said. “We’re going to be asking those questions” during the next budget cycle.

Estimates on the size of the shortfall have ranged widely this year, beginning around $9 million and growing as new information and student counts came in. Projections from the Legislative Services Agency reported by the Indianapolis Star had the gap at $22 million this year and almost $60 million next year.

The final bill requires the state to transfer money from reserves if public school enrollment is higher than expected, as well as to make up any shortages for students with disabilities or students pursuing career and technical education. The state budget director would have to sign off first. Transfers from reserves are already allowed if more voucher students enroll in private schools than projected, or if state revenue is less than expected.

The budget shortfall, discovered late last year, resulted from miscalculations in how many students were expected to attend public schools over the next two years. Lawmakers proposed two bills to address the shortfall, and the House made it its highest legislative priority. The compromise bill would set aside up to $25 million for this year and up to $75 million next year. The money would be transferred from reserve funds to the state general fund and then distributed to districts.

The bill also takes into account two other programs that lawmakers think could be contributing to underestimated public school enrollment: virtual education programs and kids who repeat kindergarten.

District-based virtual education programs would be required to report to the state by October of each year on virtual program enrollment, total district enrollment, what grades the virtual students are in, where they live, and how much of their day is spent in a virtual learning program. These programs, unlike virtual charter schools, are not separate schools, so it can be hard for state officials and the public to know they even exist.

The report will help lawmakers understand how the programs are growing and how much they might cost, but it won’t include information about whether students in the programs are learning or graduating. Virtual charter schools in the state have typically posted poor academic results, and Holcomb has called for more information and action, though legislative efforts have failed.

Finally, the bill changes how kindergarteners are counted for state funding. The state changed the cut-off age for kindergarten to 5 years old by Aug. 1 — if students are younger than that, they can still enroll, but the district won’t receive state dollars for them. Some districts were allowing 4-year-olds to enroll in kindergarten early, Sen. Ryan Mishler said earlier this month. Then those same students would enroll in kindergarten again the next year.

Despite increases passed last year to boost the total education budget, many school leaders have said they struggle to pay salaries and maintain buildings, which is why funding shortfalls — even small ones — matter. This year’s unexpected shortfall was particularly problematic because districts had already made plans based on the state budget.

Find all of Chalkbeat’s 2018 legislative coverage here.

let the games begin

Assembly pushes for $1.5 billion boost to education spending

PHOTO: Photo by Jonathan Fickies for UFT
UFT President Michael Mulgrew interviews New York State Assembly Speaker Carl Heastie.

In a tight budget year, New York State’s Democratic-led Assembly wants to increase education spending by $1.5 billion, officials announced late Monday night.

The proposed increase  which would bring total education spending to $27.1 billion  is significantly more than the governor’s suggested $769 million increase. Still, the amount is a slightly smaller boost than the Assembly backed last year, which is likely a reflection of a difficult fiscal situation faced by the state this year.

State officials are fighting against a budget deficit, a federal tax plan that could harm New York, and the threat of further federal cuts. The potential lack of funding could be the only sticking point in an otherwise quiet budget year for education matters.

As part of its education agenda, the Assembly backed a number of programs it has in the past. The plan supports the My Brother’s Keeper initiative, which is designed to help boys and young men of color reach their potential, and “community schools,” which act as service hubs that provide healthcare and afterschool programs.

The release of this plan kicks off the final stretch of the state’s budget process. The governor has already outlined his proposals and the Senate will likely follow soon, setting up the state’s annual last-minute haggling.

The budget is due by April 1, but could always be resolved later similar to last year.