In a political showdown, one of the most vocal supporters of Indianapolis Public Schools is pressuring the district’s administration to make aggressive budget cuts and significantly reduce its request for more taxpayer money.
The Indy Chamber unveiled a plan Wednesday proposing nearly $500 million in sweeping cuts to Indianapolis Public Schools over eight years. And the chamber drew a line for its support of requesting more money from taxpayers: Chamber officials say they believe the district should only ask for $152 million in additional funding through tax increases, a significant reduction from what started as a nearly $1 billion request.
The district is set to decide next week how much it will seek from taxpayers in November.
Philanthropist and influential business leader Al Hubbard, who played a significant role in the analysis, gave an unvarnished pitch for the district to embrace the chamber’s recommendation during a press conference.
“Our hope is that they are going to embrace this proposal,” Hubbard said. “If they propose a referendum that’s higher than this, we will have to oppose them.”
But the district pushed back. In a statement, Superintendent Lewis Ferebee said the district will continue to work with the chamber as officials work toward a referendum amount. But he raised concerns about the cost-cutting measures recommended, particularly what he described as closing a “devastating” number of schools.
“IPS is committed to further action to reduce unnecessary expenditures,” Ferebee said. “We believe, however, that a responsible referendum request cannot be anchored solely in revenue from cost savings that to this point are on paper only.”
The report came on the heels of months of work between the district and the chamber after the school board agreed to delay a plan to ask voters for more money in May. In exchange for the delay, the chamber committed to analyze Indianapolis Public Schools’ finances, help draft a new request — and, importantly, lend its political support to a tax increase.
The proposal now puts school officials in a bind: If they adopt the chamber’s plan, or something similar, they will need to dramatically overhaul district spending in the coming years. Alternatively, if they reject the austerity measures, they could lose the chamber’s support and struggle to persuade voters that more funding is essential.
The largest savings in the chamber’s plan, expected to save $477 million over eight years, would come from:
- Reducing the number of teachers through attrition ($126 million).
- Eliminating busing for high school students and relying on public transit ($121 million).
- Reducing unused space more than likely by closing schools ($100 million).
- Cutting the central office staff by 50 percent ($33 million).
- Reducing the number of custodians ($19 million).
Another $62 million would come from “operating efficiencies,” a bucket that includes wide-ranging suggestions such as cutting classroom assistants, contracting out nursing, expanding health savings accounts for employees, and switching to an internet phone system.
Ahmed Young, the chief of staff for the district, said Indianapolis Public Schools has significantly cut spending on its central office and sold underused properties in recent years. He said the district would continue to work with the chamber to come to an agreement in the coming days.
“There are elements that we disagree on obviously, and we are going to continue to lift up our hood and make sure our engine is running properly,” he said.
The plan also includes two potentially controversial real estate deals. It calls for leasing the Broad Ripple High School building to Purdue Polytechnic High School and Indianapolis Classical Schools, which runs Herron High School. That proposal has ignited controversy in recent weeks, as local political leaders have put increasing pressure on the district to accept an offer for the building, while Indianapolis Public Schools officials have said they plan to have an open process to gauge interest. The chamber is also calling for the district to look into selling its central office building, which officials are already considering.
The chamber contends that the cuts it recommends could balance the district’s budget — which is projected to have a deficit of about $45 million next school year. But the chamber is also proposing $243 million in extra spending on teacher and principal pay to reduce turnover and make Indianapolis Public Schools more competitive with nearby districts.
Indianapolis Public Schools spends the most per student of any comparable district, according to chamber data from 2016-17. But its teacher pay is relatively low compared to other districts, especially for mid- and late-career teachers. In part, that’s because the district only spends about 47 percent of its budget in classrooms, according to the chamber.
Under the chamber’s plan, teacher pay would go up by 16 percent and principal pay would rise to $150,000 per year by 2020-21. After that, all IPS employees would receive 2 percent raises each year.
To fund those raises, the chamber is proposing increasing local funding by $100 million for operating expenses, such as teacher pay, over eight years by asking voters to approve a tax increase. The plan also includes a second tax measure to raise $52 million for building improvements, primarily focused on safety, that was announced by the district in June.
That’s a significant decrease from the district’s original proposal for referendums. Indianapolis Public Schools officials announced last year that they would seek nearly $1 billion more over eight years from local taxpayers in May. After that plan failed to gain support from community leaders, the district first reduced its request and then delayed the vote until November.
The chamber acknowledged that the cuts it is recommending would be painful.
“What we are asking them to do is tough. Closing schools is very difficult. Reducing the number of employees is very difficult,” said Hubbard. “At the same time, we think it’s unfair to the taxpayer to pay for empty seats or to pay for unnecessary staff.”
School board president Michael O’Connor said the district has had a longstanding partnership with the Indy Chamber, and he expects them to come to an agreement in the coming days.
“If we keep that perspective, that we’ve been partners on a lot of very difficult things, in the forefront, and we keep talking between now and Tuesday afternoon at 5:45 p.m., I think we will probably find some common ground,” he said.
The chamber’s report echoes a similar finding in 2014, when the district was projected to run a budget deficit. The chamber made similar recommendations, including selling the district’s headquarters and relying more on public transportation. The administration eventually implemented some of those suggestions, but concerns about the deficit dissipated when it was revealed to be an accounting error.
The current Indianapolis Public Schools administration is often lauded by the business community, and the chamber, for steps it has taken to transform the district in recent years, including the push for more school choices and the closure of some underused high schools. Indy Chamber CEO Michael Huber echoed that support Wednesday, describing Ferebee as “one of the best superintendents in the country.”
“We very much believe in Dr. Ferebee’s abilities to implement these solutions,” Huber said. “We wouldn’t be wasting our time throwing out hypotheticals or theoretical solutions.”
The plan was crafted by consultants from Faegre Baker Daniels Consulting and Policy Analytics, LLC, who had access to reams of information and prior reports from Indianapolis Public Schools.
This story has been updated.