Indianapolis Public Schools offers buyouts to up to 150 teachers

Indianapolis Public Schools is offering teachers $20,000 payments to retire, in a move that could cut costs.

Nearly 250 educators are eligible for the buyout, which would be contributed directly to retirement plans for teachers who take the offer, according to the district.

District officials say the offer is not a cost-cutting move but rather an effort to enhance the district’s ability to set its budget for next year and plan for its hiring needs. In a written response to questions, head of human resources Mindy Schlegel wrote the offer “is not a buyout, but an early notice incentive.”

“The district is focused on incentivizing early notice of planned retirements so we can apply those notices to budgeting and staffing work principals are doing now versus addressing those challenges in June,” she wrote. “Knowing staffing shifts early is one of the most critical levers they can use in planning for next year.”

Teachers have 11 days to make their decision. They must notify the administration by 5 p.m. on April 20 if they want to take the buyout, according to the district. The district apparently could back out of the deal, though—officials have until May 4 to decide whether to go forward with the program.

A minimum of 100 and a maximum of 150 educators would have to accept the offer for the district to go through with it. If 150 teachers accept the $20,000, the payouts could cost the district as much as $3 million. The district could ultimately save money even if it replaces retired teachers, because veteran teachers are paid more.

When asked how much the offer could save the district in the long run, Schlegel said the payments are “not really about cost savings.”

School board member Mary Ann Sullivan said the offer has a number of benefits. It could help the district get a clearer picture of its staff and finances at a time when it is facing a severe budget shortfall. But it could also help the district avoid laying off teachers, she said.

“If you can manage to not do that—avoid that situation—most people would think that’s a good goal,” she said.

To take advantage of the deal, teachers need to be eligible for regular retirement under the rules of the Indiana Public Retirement System. Teachers as young as 55 years old could be eligible if they have at least 30 years of service. Older teachers would be eligible with fewer years of service. Teachers would need to retire at the end of the 2017-18 school year.

The retirement plan administrator, VALIC, will host a session 4:30 to 6 p.m. Thursday in the boardroom of the Education Services Center, according to an email sent to teachers.

“I hate to lose teachers,” said Rhondalyn Cornett, president of the Indianapolis Education Association. But the offer could be desirable for teachers who were trying to decide whether they can afford to retire, she said. “It’s a good opportunity because I do know there are some teachers who are going to want it.”

Some teachers were already considering retirement because they were displaced during the high school closing process, Cornett said.

The incentive for higher-paid teachers to retire comes at the same time as the district is considering ways to cut costs after withdrawing a request for more funding from taxpayers. Superintendent Lewis Ferebee has told RTV6 the district might also freeze hiring and furlough administrators. Last week, Schlegel told Chalkbeat the district had not yet decided whether teachers might be laid off.

In her email about retirement incentives, Schlegel wrote she did not anticipate the plan would affect class size. Whether the district replaces teachers will depend on the subjects they teach, she wrote.

The district has been grappling with budget deficits for years, but the issue has become more severe in recent months. District leaders say the budget crunch is caused by declining overall funding as well as the high cost of operating expenses such as raises for teachers.

In November, the administration released a plan to appeal to voters to increase property taxes and school funding. But following a rocky rollout and campaign, district leaders first reduced their request and then withdrew the referendum. They are currently working with the Indy Chamber to review finances and craft a request that would appear on the November ballot.

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