School Finance

State budget debate: Should charter schools get extra cash?

PHOTO: Alan Petersime
A new charter high school is planned for the East side of Indianapolis.

In most cases, Indiana charter schools draw money from fewer sources and generally get less aid per student then traditional public schools.

But the question for the Senate Appropriations Committee today was whether that was fair or if they should get a financial boost in the state’s next two-year budget.

Unlike traditional public schools, charter schools do not receive local property tax dollars from the state to pay for school buildings and busing. Proponents of charter schools argue they get less money to spend on educating students because some of those dollars must fill the gap for costs outside the classroom. They want the legislature to back Gov. Mike Pence’s proposal to boost charter school state aid by $1,500 per student.

“Traditional public schools spend local dollars on capital, which frees up general fund revenue to spend on teachers and classrooms,” said Chad Timmerman, Pence’s director of education policy. “Charters have to swallow (capital costs) as pure overhead.”

But critics of the idea say charters already get their own special funds that traditional schools can’t tap. State Superintendent Glenda Ritz said if the concern is the need for charter schools to have capital dollars to support building purchase, rental or maintenance, extra aid should be focused on that problem.

“I know the conversation is about the $1,500 increase to charters schools, and I know that one of the reasons is for the capital piece, but I have not heard the $1,500 added to that would just be for capital,” she said. “I don’t feel the data shows that public charters should receive more tuition dollars to use as they wish.”

Ritz said charter schools have the same access to state and federal dollars as public schools, plus specific charter school grants that could provide up to three years of extra aid.

Others argued that the cost for adding $1,500 per student to charter schools — estimated at $90 million — was too high. The governor has proposed a total increase to the state’s education spending of about $200 million.

Over a decade, Indiana has seen charter schools grow quickly. Nearly 80 charter schools are now operating statewide, and some critics say fear that they are beginning to drain significant dollars from traditional public schools.

But Jon Hage, CEO of Florida-based Charter Schools USA, was among those who argued the state’s lower funding for charter schools discourages some high quality national networks from bringing more good charter schools to Indiana. CSUSA operates three former Indianapolis Public Schools under a contract with the state and wants to open charter schools here too.

But committee chairman Sen. Luke Kenley, R-Noblesville, asked if the charter schools Indiana already has should first prove they can raise student test scores before more funding is added or efforts are made to attract new charter school networks.

“We have an awful lot of charter schools authorized by an awful lot of different people,” he said. “If we’re going to dedicate any additional funds to charter schools, I think the committee needs to be thinking about what those standards outght to be before we go ahead and decide to do that.”

Indiana's 2018 legislative session

Indiana lawmakers OK up to $100 million to address funding shortage for schools

PHOTO: Scott Elliott

Indiana lawmakers agreed to dip into reserves to make up a shortfall to get public schools the money they were promised — and they’re trying to make sure it doesn’t happen again.

Both the House and Senate overwhelmingly voted to approve the final plan in House Bill 1001. The bill now heads to Gov. Eric Holcomb’s desk.

Rep. Tim Brown, a co-author of the bill and chairman of the House Ways & Means Committee, said it was necessary to take the uncommon step and have the state to use reserve funds to make up the gap, but in the next budget year making up that difference will be a priority. Brown said he, other lawmakers, and the Legislative Services Agency will work to make sure projections are more accurate going forward.

“Do procedures need to be changed?” Brown said. “We’re going to be asking those questions” during the next budget cycle.

Estimates on the size of the shortfall have ranged widely this year, beginning around $9 million and growing as new information and student counts came in. Projections from the Legislative Services Agency reported by the Indianapolis Star had the gap at $22 million this year and almost $60 million next year.

The final bill requires the state to transfer money from reserves if public school enrollment is higher than expected, as well as to make up any shortages for students with disabilities or students pursuing career and technical education. The state budget director would have to sign off first. Transfers from reserves are already allowed if more voucher students enroll in private schools than projected, or if state revenue is less than expected.

The budget shortfall, discovered late last year, resulted from miscalculations in how many students were expected to attend public schools over the next two years. Lawmakers proposed two bills to address the shortfall, and the House made it its highest legislative priority. The compromise bill would set aside up to $25 million for this year and up to $75 million next year. The money would be transferred from reserve funds to the state general fund and then distributed to districts.

The bill also takes into account two other programs that lawmakers think could be contributing to underestimated public school enrollment: virtual education programs and kids who repeat kindergarten.

District-based virtual education programs would be required to report to the state by October of each year on virtual program enrollment, total district enrollment, what grades the virtual students are in, where they live, and how much of their day is spent in a virtual learning program. These programs, unlike virtual charter schools, are not separate schools, so it can be hard for state officials and the public to know they even exist.

The report will help lawmakers understand how the programs are growing and how much they might cost, but it won’t include information about whether students in the programs are learning or graduating. Virtual charter schools in the state have typically posted poor academic results, and Holcomb has called for more information and action, though legislative efforts have failed.

Finally, the bill changes how kindergarteners are counted for state funding. The state changed the cut-off age for kindergarten to 5 years old by Aug. 1 — if students are younger than that, they can still enroll, but the district won’t receive state dollars for them. Some districts were allowing 4-year-olds to enroll in kindergarten early, Sen. Ryan Mishler said earlier this month. Then those same students would enroll in kindergarten again the next year.

Despite increases passed last year to boost the total education budget, many school leaders have said they struggle to pay salaries and maintain buildings, which is why funding shortfalls — even small ones — matter. This year’s unexpected shortfall was particularly problematic because districts had already made plans based on the state budget.

Find all of Chalkbeat’s 2018 legislative coverage here.

let the games begin

Assembly pushes for $1.5 billion boost to education spending

PHOTO: Photo by Jonathan Fickies for UFT
UFT President Michael Mulgrew interviews New York State Assembly Speaker Carl Heastie.

In a tight budget year, New York State’s Democratic-led Assembly wants to increase education spending by $1.5 billion, officials announced late Monday night.

The proposed increase  which would bring total education spending to $27.1 billion  is significantly more than the governor’s suggested $769 million increase. Still, the amount is a slightly smaller boost than the Assembly backed last year, which is likely a reflection of a difficult fiscal situation faced by the state this year.

State officials are fighting against a budget deficit, a federal tax plan that could harm New York, and the threat of further federal cuts. The potential lack of funding could be the only sticking point in an otherwise quiet budget year for education matters.

As part of its education agenda, the Assembly backed a number of programs it has in the past. The plan supports the My Brother’s Keeper initiative, which is designed to help boys and young men of color reach their potential, and “community schools,” which act as service hubs that provide healthcare and afterschool programs.

The release of this plan kicks off the final stretch of the state’s budget process. The governor has already outlined his proposals and the Senate will likely follow soon, setting up the state’s annual last-minute haggling.

The budget is due by April 1, but could always be resolved later similar to last year.