UPDATE: GOP budget includes big shift in school funding

Indiana schools could see major shifts in funding under a state budget plan presented by Republicans who control the Indiana House.

Republican leaders said that their two-year, $28 billion budget held most spending flat and avoided tax increases. The budget would keep overall education spending at current levels, but includes changes to the distribution formula will hurt some urban and rural schools and help some suburban schools. The House Ways and Means Committee is slated to vote on the budget proposal Friday morning.

House Ways and Means Committee Chairman Rep. Jeff Espich, R-Uniondale, said the proposed school funding formula eliminates extra grants for small schools and only pays schools for students actually enrolled, eliminating the extra cash shrinking districts currently receive to help ease their financial losses after students leave.

"The money really should follow the child — and the child should exist," Espich said. "You shouldn't be funding a ghost child."

Republican lawmakers have pushed for years to even out the disparities between schools that get high per-pupil funding and those that get lower amounts. Shrinking urban and rural districts often get higher funding per student and fast-growing suburban districts get lower amounts.

When Democrats controlled the House in recent years, they insisted on buffers to prop up schools with declining enrollments in an effort to minimize teacher layoffs and increases in class size. Now that Republicans control the House, GOP leaders want to quickly equal out per-pupil funding levels.

The proposed funding formula aims to move each school district toward its "target" amount of per-student funding, which is a base amount of spending plus additional money for districts with larger numbers of poor students. Most districts are currently above their target amounts and would gradually receive less per-pupil funding to eventually reach their target within 9 years.

But a handful of districts currently more than 20 percent above their per-pupil targets would see bigger drops immediately because the formula states that districts cannot be more than 20 percent above target numbers. Espich said the abrupt change was needed.

"If you don't do something rather drastic, you have these outliers that are sucking up all the money," Espich said.

Education officials said the changes proposed Thursday would mean serious cuts of millions of dollars to some districts. Even keeping overall education spending flat over the next two years amounts to a cut, they argue, because of schools' rising costs.

"We knew this was not going to be a pretty picture," said Dennis Costerison, executive director of the Indiana Association of School Business Officials. "It's a cut. There's no other way to look at it."

Rep. William Crawford, D-Indianapolis, said schools are continually being told that they have to do more with less.

"I don't know how much they're going to be able to do," he said.

House Minority Leader Patrick Bauer, D-South Bend, said the budget proposal will hurt public schools, as will Republican education initiatives such as expanded charter schools and vouchers that use tax money to help parents send their children to private school.

"We're concerned about the whole approach to education this year," Bauer said. "There are going to be a lot of teachers laid off and a lot of programs cut this fall."