State should visit funding issue
Friday, March 14, 2014 8:47 AM
School corporations all over Indiana are tightening their belts.
And there’s no magic wand that can be waved to make the fiscal challenges disappear.
But there is one simple step the Indiana General Assembly could take that would provide a measure of immediate relief and allow school boards, administrators and teachers’ unions to make more thoughtful judgments about spending.
Before the legislature’s latest round of tinkering with the school funding formula, school corporations reported their enrollment figures to the Indiana Department of Education each fall. State constitutes about 95 percent of the general fund, the one that’s used to pay teachers, health insurance, utilities and most other operating expenses.
If enrollment were declining, then there would be a reduction in the amount of state support in the school corporation’s next budget year. For instance, if enrollment were down by 30 students, there’d be a reduction of about $180,000 in state support a year later, based upon a figure of about $6,000 per student under the funding formula.
That made sense, particularly because lawmakers and recent state administrations have been interested in having funding “follow the student.”
But then someone at the state level had the bright idea of basing general fund support on not one enrollment count but two.
And instead of giving school corporations a year to respond to enrollment declines, the state decided reductions in support would be retroactive.
That means school systems that had hired faculty based upon the previous year’s numbers and then saw drops in enrollment suddenly had to shift into crisis mode to make their budgets balance.
It also meant things that had been viewed as a positive for years — mid-year graduation by seniors interested in entering the workforce — were now a negative. If 20 seniors graduated at mid-year, they weren’t countable on that new, second enrollment date. And those 20 seniors immediately translated into $120,000 less in state support for the second semester.
While from an accounting standpoint that may have made sense to somebody, it makes no sense at all when it comes to planning and administering a school system.
Rather than making carefully measured decisions, school boards were faced with having to make cuts that — in the long run — might not make much sense.
It’s no way to run Indiana schools, and it’s a problem created completely by the legislature.
Set aside the arguments about the impact of property tax caps, the business personal property tax changes or vouchers for private schools. There’s no consensus on those issues.
But it ought to be relatively easy to find consensus on fixing the school funding formula. —J.R.