The Herald Bulletin

Evening Update

State News

May 21, 2013

Boost in education funding won’t benefit all schools

INDIANAPOLIS — In the budget bill passed by the General Assembly last month, more money is allocated for K-12 education over the next two years, but that doesn’t mean every school will get more dollars.

Due to changes in the way education dollars are now distributed, more than 40 percent of school districts in Indiana will see either no increase or a decrease in money coming from the state.

Some urban school districts will get fewer dollars because they’re projected to have fewer students, but some suburban districts with growing enrollments will also get less money due, in part, to the lack of low-income students in their schools.

Meanwhile, some rural school districts with little change in their enrollment will see more money coming their way, while neighboring rural districts will see less.

The reason: Changes made by the Republican-controlled Legislature in the school funding formula two years ago will determine how the increased education dollars approved for the next two years will be divvied up.

“We’re trying to make sure all students are treated equally,” said Rep. Jeff Thompson, R-Danville, who helped craft the new formula.  

Schools getting more money may be pleased, but school districts that will see the same or less dollars are feeling frustrated. They’re still feeling the hit from the $300 million cut in K-12 education funding in the last state budget cycle. And they were hoping for more than the modest 3 percent increase in K-12 funding in state budget approved in late April.

“It’s still very challenging to keep up with our ever-increasing costs,” said Vigo County Schools Superintendent Dan Tanoos, who heads a school district slated to get almost no more state education dollars over the next two years.

The new formula, which significantly altered the mechanism used to set per-pupil funding for every school district in Indiana, is being phased in over seven years.

That means some schools, despite the 3 percent increase in state funding for K-12 in the 2014-15 state budget, may continue to see their funding flat-lined or decreased for several years until they reach the new set point in the formula. Others will see a steady increase.

“We knew it would take time for schools to adjust,” Thompson said. “Some are adjusting more quickly than others.”

Changes made to the school funding formula two years ago were intended to simplify the complicated mechanism used by the state to determine how much money every school district in Indiana gets.

Both the old formula and the new one set a base amount for per pupil funding, with more money added for schools that have higher populations of low-income students.  

But the old formula also included measures that financially favored some schools over others. Small school districts got additional funding, and school districts with declining enrollments got extra cash to help ease their financial losses after students leave.

Democrats in the Legislature who defended the old formula said it helped struggling school districts in inner cities and small towns keep their school doors open.

But the formula was so complicated that some school districts received significantly more dollars than others, even though they had similar student bodies, both in number and in need.  

One example under the old formula: In 2011, the Gary school district, with 90 percent of students living in poverty, received $9,525 per pupil in state funding. The neighboring Hammond school district, with 92 percent of its students in poverty, received only $7,004 per pupil — almost $2,500 less than Gary.

Terry Spradlin, associate director of the Center for Education Evaluation Policy at Indiana University, and an advocate for the formula change, said the new formula is better.

“The changes make the funding more equitable and more transparent,” Spradlin said. “It gets us closer to the goal: Schools with greater needs should get more money.”

Under the new formula, every school district is being moved toward a “target” amount of per-pupil funding: a base amount of just over $4,500 per pupil, with additional dollars for districts with a larger percentage of students who are low-income or have special needs.  

Moving toward the target amount hasn’t been easy: Many school districts were over the target amount when the new formula went into place and haven’t wanted to give up their additional funding.

The new formula was the death knell for the tiny New Harmony school district in southwest Indiana. The district, which had only 130 students in all grades, kindergarten through 12th, was facing a 30 percent cut in state funding under the new formula when it decided to close the doors of its only school last year.

Under the old funding formula, which included extra money for small schools, New Harmony was getting more than $9,600 per pupil, far more than other districts around the state.  

“There were schools getting extra money for years,” Thompson said. “There are still schools getting that extra money.”

That’s not how school districts losing dollars or not getting more money see it.

“There is still going to be some pain for some school districts,” Spradlin said. “There are superintendents and schools boards across the state who are saying, ‘We’re going to have to make some more tough decisions.’”

Sue Loughlin of the (Terre Haute) Tribune Star contributed to this story.

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