School chiefs weigh in on proposed new funding formula

Leaders from some of Indiana's poorest school districts said Tuesday they fear proposed funding cuts they're facing, while those from growing districts are worried proposed increases for them won't be enough.

The Indiana Senate’s school funding subcommittee, chaired by Sen. Ryan Mishler, R-Bremen, heard testimony on proposed changes to school funding, including comments from 11 superintendents who testified on the Indiana House’s proposed budget. The budget, House Bill 1001, would give K-12 schools statewide 2.3-percent increases in funding the next two years. Overall, state dollars for public schools will increase by $469 million to a record high of $6.9 billion.

That record increase would be accompanied by major changes, however. The plan includes adding more money to the basic tuition amount for each student, which benefits all schools in the state. But the formula that gave extra money to poor students, who often start school academically behind their peers, has been changed.

Going forward, only students from families that are poor enough to qualify for free lunch will be counted in for extra state aid. In the past, the poverty aid was also provided for students who were slightly less poor but still qualified for special assistance, such as free textbooks or reduced-price lunch. For districts like Indianapolis Public Schools, where a large majority of students come from families who are poor enough to qualify for free and reduced-price lunch, this could mean big reductions in state aid.

More than a third of Indiana's nearly 300 school districts are expected to see some cut in funding because of the formula change.

“We believe these reductions are too volatile, the pace of change is too fast, for any corporation to either gain or lose a significant amount of funding over a short period of time,” Indianapolis Public Schools Superintendent Lewis Ferebee said.

To qualify for the lunch program this year, children from a family of four must have annual income of less than $43,500. Last year, about 78 percent of IPS students came from families that were poor enough to qualify for free lunch, but that number is expected to drop to about 71 percent this year. Ferebee said that shouldn’t be interpreted to mean that IPS has fewer students in poverty — rather, families are not as readily applying for the free lunch program. This year IPS got a federal grant money that provides free lunch to all students regardless of income, reducing urgency for families to fill out paperwork. Their students will get free lunch whether they officially enroll or not.

Kathy Friend, the chief financial officer of Fort Wayne Community Schools, who spoke on behalf of the Indiana Urban Schools Association, said all schools will see some reduction in dollars to support poor children, but the state’s poorest districts will be hit the hardest. As a result, more basic state aid dollars intended to support all children will need to be channeled toward poor kids to make up for the lost poverty aid in districts with more poor children.

An enrollment decline of about 1 percent is projected for the 29,000-student Fort Wayne district, which would see an estimated funding decline of about $650,000 in the first year of the House budget plan.

Much of this year’s legislative debate around school funding has centered on the disparity between the state’s lowest-funded districts, often those with higher state test scores, and the highest-funded districts, which tend to be high-poverty districts that also tend to have more students with special needs and those learning English as a second language.

Chris Himsel, superintendent in Northwest Allen County Schools in suburban Fort Wayne and an advocate for increased aid for suburban districts, said the trade-off between increased basic state aid for all students while also giving less extra money for poor students is unacceptable. His district comes out slightly ahead based on the proposed changes to the funding formula, but that still isn’t enough, he said. Northwest Allen shouldn’t gain if it means others must lose, he said.

“All of our kids throughout our state need more funding,” Himsel said. “To do the things that we are being asked to do with what we currently receive is not enough … I am interested in helping our kids. I am not interested in destroying other kids to do it.”

Superintendents from districts as diverse as East Chicago, Batesville, Greene County, Elkhart and Zionsville said they simply can’t make ends meet, even with the proposed increase in basic state aid. The state needs to do more, they said, whether that means even more basic state aid for all schools, reducing poverty aid more slowly over time or sticking with the current method for calculating poverty aid.

Officials from the Zionsville Community Schools in suburban Indianapolis said they've had classes with as many as 40 students as the district has had one of the state's lowest per-child funding levels.

Zionsville School Board President Shari Alexander Richey said such funding levels aren't sustainable for the district where enrollment has jumped by about one-third in the past decade.

"That will hurt our students, that will hurt our economy, that will hurt the economic development of our community and others like ours," she said. "Clearly, everyone loses in that."

East Chicago superintendent Youssef Yomtoob implored lawmakers to at least slow the reduction in poverty aid so it won’t hit as hard right away.

“Grandfather us in,” Yomtoob said. “I don’t want more money, but do not take $4 million. That’s over 20 percent of my budget. I can’t live like that.”

Superintendents from districts where enrollment is growing, such as Hamilton Southeastern and Carmel, were generally more supportive of the proposed budget, which tends to be favorable to districts taking in more students. Allen Bourff, superintendent at Hamilton Southeastern, said he understands there are many concerns for urban schools, but the problems his district is facing are valid, too.

House Republican leaders made a top priority of closing the gap in per-child funding between growing and shrinking school districts they say had reached nearly $3,000. The House plan drops that gap to an estimated $1,600 for the 2017 budget year.

“I applaud the work of the House members to craft a bill that would address some of the issues that we have faced in Hamilton Southeastern over the years,” Bourff said.

The budget will again go before the Senate Appropriations Committee, chaired by Sen. Luke Kenley, R-Noblesville, on April 9.

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