IPS considering big changes in school-funding formula

The students at Indianapolis Public School 15 face significant challenges. Most are poor, a third still need to learn English as a new language and three out of five have failed state tests every year since 2010.

Yet, even with needs like those that are more challenging than most, the struggling school on the city's east side gets less money from the district per student than many other IPS schools. It receives about $4,652 per student, according to the latest annual budget information.

It’s a different story at School 84, an elite Center for Inquiry magnet school on the north side that attracts children from many of the city’s wealthiest families.

School 84 gets $5,955 per pupil from the Indianapolis Public Schools—about 28 percent more than School 15—even though fewer students need the special attention that comes with poverty and the demands of learning English as a new language. Just 8.2 percent of School 84 students come from families that are poor enough to qualify for free or reduced-price lunch, a common poverty measure, and fewer than 1 percent are English language learners The school posted some of the highest test scores in the city last year, earning an A on its state report card.

It’s an funding inequity playing out across the district that some IPS board members say they want to change.

“One of the board’s core commitments and beliefs is to ensure that we have access and equity for all students across the district,” Superintendent Lewis Ferebee said.

To do so, a budget proposal that Ferebee and the board are considering would radically change the way Indianapolis schools are funded.

The plan could have far-reaching consequences for students and teachers across the city, with some schools coming out ahead—and others facing difficult choices as they find their budgets slashed.

Depending on what method the board decides to use to equalize funding, the plan could mean some teachers—especially veterans—might have to move to new schools. Struggling schools like School 15 could expect more money to pay for needed services, but some of the city’s most successful schools—places like School 84— might lose significant dollars that they use now to pay for their special programs and staff.

“It kind of scares me,” Rhondalyn Cornett, president of the the district’s teachers union, said of the weighted-budgeting proposal.

If schools suddenly lose funds to pay for experienced teachers, principals may be forced to make choices that could harm their schools, she said.

“I’m really concerned with people being able to do what’s right to meet their budgets,” Cornett said.

'Weighted' funding plan

The new funding model IPS is considering, called “weighted” or “student-based” budgeting, has become increasingly popular in urban districts over the last two decades.

The method is supposed to distribute funds to schools based on the needs of students in each building. Schools get extra funding for students with greater challenges, like those who need special education services or those who are learning English as a new language, and principals are given more control over school spending decisions. School leaders, for example, can decide how much they want to invest in music courses or teacher training. More of one could mean less of the other.

The model is a departure from traditional school funding, in which schools receive set amounts for curriculum or supplies, and teacher salaries are paid by the district without considering whether a school has mostly highly paid veterans or rookies at the bottom of the pay scale.

Teacher salaries account for most of the difference in funding among IPS schools. That’s why School 84, where the average teacher makes $56,325 per year, averages more money per student than School 15, where the average teacher salary is $43,713.

Teacher salaries are one reason weighted funding has been controversial where it’s been tried, since some approaches to the weighted model may encourage principals to push out experienced teachers in order to hire younger teachers for less money.

As Indianapolis considers a shift to the weighted model, teachers and their union worry that veteran educators will be targeted to save costs. Parents at some of the city’s top schools, which often have the highest numbers of experienced teachers, worry the new model could mean upheaval if large numbers of teachers choose to retire or are forced change schools.

Weighted budgeting is currently used in dozens of cities—from pioneers like Houston to newer converts like Cleveland.

But the delicate politics around who gets how much money have prevented many districts from fully employing the model. In Chicago, the district struggled to phase in weighted budgeting for nearly a decade, finally implementing it district-wide in 2013, but magnet and selective enrollment schools are funded separately.

In Seattle, the highest profile district to try and then abandon weighted budgeting, principals only had control over about 10 percent of their budgets, a district official told Education Week in 2012.

In districts that have more fully embraced weighted budgeting, including Hartford, Boston and Houston, 40 percent to 45 percent of district budgets are allocated on a per-student basis, according to a recent report from the Edunomics Lab.

How the model would be implemented in Indianapolis is still unclear. The district aims to develop a weighted plan that it would first try with a pilot group of six to eight schools next year before expanding it more broadly.

The pilot schools, which have not yet been selected, would be a mix of elementary, secondary and magnet schools that the district decides are ready to take on more self-management. Those schools would get more control over their budgets but, in the short term, they are unlikely to feel the pain of weighted budgeting. The district says it has no plans to change funding levels during the pilot phase.

Weighted budgeting is part of Ferebee’s larger effort to grant greater control to principals. He wants to create schools where local leaders manage curriculum, staffing and teacher training.

The district aims to give principals as much control over their budgets as it can while complying with state law, Ferebee said.

“Great leaders need to be making those decisions about their schools,” Ferebee said. “They have the local context. They know their students. We want to have the ability to make decisions about how to support them.”

Uneven funding

The logic behind weighted budgeting seems simple: make sure all schools get the resources they need to meet the needs of their students.

Funding inequities in Indianapolis are not just between schools that serve wealthier students and those that serve poor students. Some schools with larger numbers of poor children do have experienced staff that are well-paid. Not all magnet schools serve mostly wealthy families, either. Some have large numbers of children with significant barriers to learning.

But economics does play a role. A comparison from an Urban Leaders Fellowship report found that the five IPS schools with the fewest poor students receive 22 percent more per year on average from the district than the five schools with the most poor children — a difference of $1,329 per student.

The current system isn’t fair, said Yvonne Millbrook, a parent at School 15.

“It’s upsetting,” she said. “They should all get even (funding). I don’t understand how some schools get funded more than others in the same district.”

Millbrook would love to see more money come to School 15, where her fourth-grade daughter receives special education services, but if steering more dollars to schools like School 15 means tinkering with popular, high-scoring schools, the plan could meet with objections — even from board members.

“If you’re (a) good (teacher) and you’ve got the training, your principal doesn’t want to let you go. And we wouldn’t want to ding a school for that,” said IPS Board member Kelly Bentley.

On the other hand, she said, “having all of your experienced staff in one building isn’t equitable to kids across the district.”

Tracy Ross, a parent at School 84, said parents don’t realize what might be coming if weighted budgeting is eventually put in place. She only learned IPS wanted to move toward a new system because she is vice president of the school’s parent-teacher-student association, where it was discussed. She worries about what will happen if the school loses money.

“We like the way our school is now,” she said.

Impact on schools

Just how fair and equitable the future funding system would be using weighted budgeting is up to the board.

Under weighted budgeting, there are two ways for districts to approach to teacher pay.

One option, which is rarely used because it can cause significant turmoil in school staffing, charges schools the actual cost of the salary of each teacher. That means each school would receive a set budget to hire teachers and buy supplies, forcing principals who hire highly paid veteran teachers to spend more on wages than principals who hire novice teachers making the minimum $40,000. The top step of the pay scale in the new IPS contract is $58,600, but dozens of the most experienced teachers make $70,000 or more.

The other, less radical approach, would charge schools the same amount for all teachers, regardless of their salaries. The cost of a teacher would be based on the average district salary, so schools whose teachers earn more than the average salary would be charged the same amount as schools whose teachers earn less than the average. IPS teachers earned an average salary of $52,384 in 2013-2014, the latest year available from the Indiana Education Employment Relations Board.

The second approach would not have much impact on the status quo. Schools like School 15, which has lower-paid teachers, would still be subsidizing schools like School 84, which has higher-paid teachers, said Marguerite Roza, director of the Edunomics Lab at Georgetown University and an advocate for weighted budgeting. But even the less radical approach to student-based funding could have at least some influence on funding inequities.

For example, it could correct inequities that have resulted in some schools having fewer students per teacher than others, Roza said.

The more modest approach would also allow the district to correct inequities by steering new dollars to schools that are currently not getting their fair share. Bentley noted that the district expects to free up some money over the next few years as it considers closing or consolidating some schools, rents out empty building space and reduces central office spending. She also hopes IPS will attract new students into the district—and the state aid dollars they would bring—by expanding its best programs.

There is is value in even just beginning the weighted funding discussion, Roza said. It could help bring the problem of inequities into the open so they can be addressed.

“Right now (some schools) are over-funded, and no one understands how or why,” she said. “If I’m across the train tracks from another school that’s getting 20 percent more than I am, I’m going to be like, ‘you’re taking my money.’ But right now, we don’t know whose money it is. It’s very confusing.”

Winners and losers

Whatever approach Indianapolis decides to use, if the board votes to proceed with the new funding model, some IPS schools will come out ahead, while others will lose out.

David Rosenberg, a partner at Educational Resource Strategies, a consulting firm that’s helping the district plan and pilot weighted budgeting, said the board’s choice comes down to how they want principals to manage.

“I don’t think there’s a single right answer,” Rosenberg said. “It’s more about what do you want your principals to focus on. With average salary, I’m basically freeing principals from thinking about the cost of a teacher and letting them focus only on the effectiveness of a teacher.”

Under the current system, the CFI magnet schools, for example, are able hire as many highly-qualified teachers as they can recruit.

“I value experience, and I can hire experience as a principal because that teacher costs the district more but they don’t cost me more,” said Chris Collier, a CFI co-founder who leads School 84.

But even if the district uses the less dramatic—and less equitable—approach to weighted funding, popular magnets like the CFI and Montessori schools could lose out. The model is designed to give extra funding to schools with the most needy students. Many magnets serve wealthier students with fewer barriers to learning  than the rest of the district.

Specialized magnets could be badly handicapped if they lose funding because they are more expensive to run than an average school, Collier said. Both Montessori and CFI schools, for example, spend extra on the curriculum and training needed to support their unique teaching approaches.

“Whether you are a magnet school or whether you’re a neighborhood school, there are schools that have needs,” Collier said. “Equity doesn’t always mean the same thing. It should mean everybody gets what they need.”

Waiting for data

Before the district makes decisions about how to allocate funding among schools, it needs to know just how equitable the current funding system is.

Right now, it doesn’t.

Educational Resource Strategies, the district’s consultant, is conducting an analysis of district spending that will be available early next year. That report should give educational leaders and the public a clearer picture of just how wide the divide is between the schools getting the most money and those getting the least.

“The analysis will give an indication of where we are spending our resources and if it is allocated with equity,” Ferebee said. “For example, if a school has struggled persistently with under achievement or there’s a large number of special education students, are we spending more or less to support those students compared to other schools in the district?”

The new system might ultimately be painful for some of the city’s top schools, but board member Mary Ann Sullivan said she plans to vote for what’s fair.

“I want to be able to sleep at night,” she said. “I want to know that our kids that have the greatest need are getting fair and equitable resources to meet their needs.”

Chalkbeat Indiana is a not-for-profit news site covering educational change in public schools.