Indiana lawmakers are once again considering cuts to the funding that schools receive for students in poverty, saying the number of families in need has been declining as the state’s economy heats up.

The federal poverty rate for school-age children in Indiana is declining, but some experts and educators say the lawmakers are relying on measures that may be undercounting high-need students. While the state previously used eligibility for free and reduced-price lunch to calculate extra funding for districts, lawmakers decided in 2015 to shift to using the number of students who receive food stamps, welfare, or are in foster care.

That’s a narrower group of students, and since then, the state legislature has slowly reduced the money sent to schools to educate students from poor families — cutting it by about 30 percent since 2015. New school funding has been spread across districts, including wealthier ones that advocates say need the extra funding less.

But this year, at least one state Senate leader in Indiana is suggesting that the state expand how it counts students in poverty in an effort to earmark more aid for districts with many high-need students. And it turns out, Indiana is not alone — states across the country are grappling with how to best count students in need.

”We need to solve the issue in the short run,” said Republican Sen. Eric Bassler, chairman of Senate school funding subcommittee, who is suggesting a new method. “Then we need to be thinking about it in the long run.”

Rethinking money for high-need districts

Since Republicans captured control of the Indiana legislature in 2010, they have slowly reshaped the state’s education funding.

One essential question was how much extra money school districts should get to educate children from low-income families. An analysis found the gap in state funding between the most needy district and the least needy district in 2013 was $3,482 per student — as a result, the district with more low-income families received about $8,092 per student while the wealthier one received $4,610 per student.

State lawmakers set in motion a plan to increase the money going to districts serving middle-class students at the expense of districts serving many high-need students. They eliminated funding streams that tended to benefit districts with mostly high-need students, ending policies that slowed the loss of funding when enrollment dropped and guaranteed schools would not lose funding from one year to the next. As of 2017, all districts received the same base per-pupil funding amount from the state.

In recent years, lawmakers have spread new money among all schools, and the share of money earmarked for helping high-need children has shrunk. As a result, funding has stagnated for some districts serving many low-income students.

At the same time, the state began phasing in a new method for defining whether a student was high-need. Instead of looking at how many families receive discounted meals or free textbooks to measure poverty in schools, Indiana shifted to using the number of students who receive food stamps, welfare, or are in foster care.

It was immediately clear fewer students would qualify. Still, lawmakers argued using food stamps and welfare as a measure of poverty would provide a more reliable count because the government verifies whether families qualify for those programs, which have strict eligibility rules.

An improving economy

As House Republicans put forth a plan last month to cut funding to needy districts even further, Rep. Todd Huston, the chairman of the budget-writing Ways and Means Committee, said it is a challenge to balance the needs of schools across the state.

“It’s not a lack of compassion,” Huston said in March. “It’s an understanding of trying to figure out how do you balance out across a million-plus kids across the state … what is the most appropriate way to do it.”

Ultimately, Huston and other Republicans say the cut to poverty aid is a sign of the improving economy. And there’s evidence to bear that out: the number of school-age children in poverty in Indiana has fallen about 4.3 percentage points between 2011 and 2017.

But those statistics are based on the federal standard of poverty, which is lower than the measure the state used previously for school aid. To meet the federal threshold in 2019, a family of four must earn less than $25,750 per year. That’s substantially poorer than the income eligibility for free and reduced-price lunch of $46,435 per year, meaning fewer students are qualifying for the extra money.

Families face economic stress even if they aren’t in poverty, said Elaine Waxman, a senior fellow studying food insecurity with the Urban Institute, a think tank. “The federal poverty level is not a very good measure of need,” she said. “It’s too low.”

Is Indiana undercounting students in need?

The current version of welfare is a particularly bad measure of poverty, experts say. For every 100 poor families with children in Indiana in 2016-17, only seven received Temporary Assistance for Needy Families, according to the Center on Budget and Policy Priorities, a left-leaning think tank.

Because so few poor families receive welfare, Indiana is largely relying on food stamps to count how many students in poverty schools have. It’s a program that is a relatively good yardstick for students in poverty, said Waxman, the food insecurity researcher. But the maximum income for families to qualify for discounted school meals is 185 percent of poverty ($46,435 for a family of four). Food stamps have a lower income qualification of 130 percent of poverty ($32,630). Using food stamps as a measure inherently counts fewer students in need.

It’s also likely that there are poor students who are not counted through food stamps. Only about 83 percent of Hoosiers who are eligible for food stamps received them in 2015, according to the Center on Budget and Policy Priorities.

All these factors combine to create a program that may be undercounting the number of high-need students when families in poverty don’t get public benefits.

“For some of our families, especially those who don’t have means and resources, trying to navigate some of those statewide systems are just a bear,” said Jeff Butts, superintendent of Wayne Township. “They’re terribly complex.”

A national challenge

The “community eligibility” initiative, which allowed schools where many students qualified for free or reduced-price lunch to provide free meals to all students without documentation, has made it easier for children to access food. But it has muddied the waters when it comes to using free and reduced-price lunch eligibility as a measure of need because families do not need to submit applications to receive free meals.

As a result, states across the country have been looking for different ways of measuring poverty in schools, and one of the measures they have turned to is participation in other government programs. That includes food stamps and welfare participation, as well as programs such as Medicaid in some states.

States have taken different approaches to ensure they don’t miss students in poverty. Some have tried to pull in data from as many programs as possible. Others have multiplied the number of students in poverty that are counted to make up for the students they are missing.

“This direct certification measure gives us a better sense of children that are from households that are actively using the social safety net,” said Kristin Blagg, who studies school funding at the Urban Institute. “On the flip side, we should be a bit worried about families that are eligible for SNAP but are not participating.”