School Finance

State funding debate makes IPS budgeting 'murky'

PHOTO: Scott Elliott
IPS will give bonuses to many support staffers and administrators. But AFSCME Local 661 has not ratified the contract.

Indianapolis Public Schools could lose as much as $18 million in state aid over the next two years if changes to the state’s school funding formula approved by the Indiana House last month make it into law.

Without changes to the budget bill, those losses could be much more.

As it stands today, an apparent mistake in calculating school district poverty rates could set IPS back another $14 million if it’s not fixed by the Senate this month.

Despite all that uncertainty, IPS on Monday proposed an operating budget that assumes state revenue will be basically unchanged from last year.


Well, district officials say, there wasn’t much else they could do for now.

State law requires school districts to publish and advertise their budget proposals before submitting them to the state by an April 1 deadline.

But at this point, IPS can only guess how much state aid it will receive next year.

The district simply cannot make a budget based on a proposed state budget that is likely to change, Superintendent Lewis Ferebee said. The best it can do is plan as if everything will remain the same and be prepared to adjust as the budget takes shape.

“It would be an overreaction or a knee-jerk to start the plan based on what we’ve learned thus far,” Ferebee said.

IPS’s proposed $232.7 million general fund budget for 2015-16 instead assumes state aid will continue to drop by $91.40 per student as part of a seven-year plan to even out state support between wealthy and poor districts. Districts like IPS, with large numbers of poor children, can receive up to $3,000 per student more than the school districts with the least poor children.

Republicans, who control the legislature, have argued that gap is too wide and should be narrowed. IPS and other poor district say they need every extra dollar to help poor children overcome barriers to learning that many of them face.

The school board will vote on the budget next week, knowing it is simply a best guess.

Board member Sam Odle said the board must aid Ferebee in making the district’s case to the legislature.

“The rest of us have to make sure IPS is represented at the Statehouse and our lawmakers understand how important it is to keep IPS’s funding up so we can create the right educational experience for our students,” he said.

One further complication for IPS: the district is shifting from a calendar year budget to a fiscal year budget that runs July 1 until June 30 of the following year. The goal is to better match the budget process to the rhythms of the school year.

“This first transition year is of course awkward,” Ferebee said. “We believe this will allow us to be good stewards and live within our means and have better allocations to schools. We know it’s going to be a little murky at first.”

Here’s what the district envisions that next school year’s general fund budget for day-to-day expenses will include:

  • No surplus. Income is expected to match expenses. IPS had surpluses of $4 million and $8 million the past two years.
  • An assumption that the district’s enrollment will remain basically steady. The district is not planning for enrollment to grow as it did in 2011-12 and 2012-13, but also does not expect it to fall as it did last year.
  • No plan for a significant raise for employees. The budget includes only a tiny $114,000 bump to about $164.6 million allocated for salaries. The district expects to spend $1.4 million more than last year on benefits.

Board member Gayle Cosby said she was not thrilled to see a meager increase in the district’s proposed budget for salaries. Board members and Ferebee have repeatedly said they’d like to give raises next year to IPS teachers.

But Ferebee said the plan was difficult to put together because of the uncertainty of budget talks at the Statehouse. The Senate has just begun their debate about the issue, and will later have to confer again with the House before coming to an agreement.

“You do it knowing there’s going to be a lot of back and forth at the Statehouse and you wait patiently until you get the final word,” Ferebee said. “We’ll be a part of those conversations and we look forward to fruitful conversation about how IPS can be best supported.”

It’s too early to know what the district will be able to do when it comes to raises, Ferebee said. Bargaining with the teachers union will begin over the summer.

“What we worry about is that what’s being proposed may compromise our ability to move forward with some of our strategic priorities we’ve discussed and may comprise our ability to be as competitive as we want to be with teacher compensation,” Ferebee said.

The school board is scheduled to vote to adopt the budget on March 19.

Paying for school

Sweeping study proposes major changes to the way schools are funded in Michigan

Michigan needs to change the way it funds education so that schools get more money for students who need extra attention — such as those who live in poverty and those who don’t yet have a strong command of the English language.

That’s the top recommendation from a prominent group of educators, policymakers, and business leaders who have been studying Michigan’s school funding system for much of the past two years.

While many states use a complex formula that gives schools more money if they serve children facing extra challenges, Michigan has long used a system that distributes the same amount of money for virtually all students, regardless of their needs.

The state provides some extra funding for students with disabilities — but not nearly enough, according to a state study last year that found schools across Michigan are getting $700 million less a year than they need to serve those students.

The study released Wednesday recommends a major restructuring so that schools would be fully funded for special education programs and would get extra funds to provide resources to students who need extra help. With that money, schools could offer lower class sizes, add counselors and social workers, and give teachers more support, the report says.

The study was conducted by Augenblick, Palaich and Associates on behalf of the Michigan School Finance Research Collaborative.

The collaborative — including top business and education leaders across the state — came together in 2016 after an earlier “school adequacy study” was largely ignored by political leaders.

The earlier study, which was funded by the state legislature, recommended that the state significantly increase the amount of money it sends to schools per student.

The collaborative hopes this new more robust study, which clocks in at more than 300 data-packed pages, will have a greater impact.

Since this study used multiple methods to determine the right funding method for schools, it will be more difficult to ignore, the group hopes.

The study — paid for with $843,000 from major foundations and 18 county school districts — included interviews with hundreds of educators including district and charters school teachers to determine how much money schools need to more effectively do their jobs.

The study examined geographic cost differences in different parts of the state, labor cost differences, and other factors and determined that schools need approximately $9,590 each for students who don’t have special needs, including funds that would come from the state and federal governments.

The study recommends that schools get 35 percent more for students living in poverty, between 50 and 70 percent more for students who are learning English, 70 percent more for students with mild disabilities and 115 percent more for students with moderate disabilities.

Among other recommendations in the  report is that charter schools receive the same per-student funding as districts. Currently, the state’s funding system pays some districts more per student than others based largely on historic funding levels as opposed to current needs. Some districts — including most charter schools — are currently getting around $7,600 per child from the state while others get thousands of dollars more. Schools also get federal funding on top of that. 

It’s difficult to compare how much funding schools are getting now with the proposed $9,590 per student because schools get a mix state and federal dollars and the $9,590 doesn’t include things like transportation dollars.

The report suggests that the state use a new approach to student transportation in which transportation dollars are distributed differently, taking into account differences between urban and rural school districts.

The report did not put a price tag on the cost of implementing the recommendations. It also did not spell out how Michigan could come up with the extra money, instead outlining that conversation as a next step — and highlighting a potential pitfall that could arise.

“While outside of the scope of this current study, the study team feels it is important to highlight during the implementation of a new system that student and taxpayer equity will also need to be considered,” the study’s executive summary reads. “Ensuring that each district and charter has the ability to raise funds needed to meet all resource needs is critical to ensuring both an adequate and equitable school funding system.”

The findings were released Wednesday morning, with press conferences planned in Lansing, Grand Rapids, and in the Detroit area.

Read the full report here:

spending squeeze

Facing a state budget crunch, Gov. Cuomo proposes modest 3 percent education boost

Governor Andrew Cuomo delivers his executive budget address.

Facing budget pressure at home and from Washington, Gov. Andrew Cuomo proposed increasing school aid by 3 percent this year —  far less than what advocates and the state’s education policymakers had sought.

Cuomo put forward a $769 million increase in school aid during his executive budget address on Tuesday, less than half of the $1.6 billion sought by the state’s Board of Regents. In response, the state’s top education officials said they were “concerned,” and suggested that they would press lawmakers to negotiate for more education spending.

The governor’s modest increase in school funding comes amid a projected $4.4 billion state budget deficit, a federal tax overhaul expected to squeeze New York’s tax revenue, and the threat of further federal cuts.

Still, Cuomo, a Democrat who plans to run for reelection this fall and is considering a 2020 presidential bid, defended his spending plan as a boost for schools at a time of fiscal uncertainty.

“We have increased education more than any area in state government,” he said during his speech in Albany. “Period.”

He also floated a plan to have the state approve local districts’ budgets to ensure they are spending enough on high-poverty schools. And he set aside more money for prekindergarten, after-school programs, and “community schools” that provide social services to students and their families.

Now that Cuomo’s proposal is out he must negotiate a final budget for the 2019 fiscal year with lawmakers by April 1. While the Democratic-controlled assembly is likely to push for more school spending, the senate’s Republican leaders are calling for fiscal restraint and tax cuts.

What was the response?

Advocates and policymakers were alarmed by Cuomo’s proposed $769 million education bump — a 3 percent spending increase compared to last year’s 4.4 percent boost.

Last month, a coalition of statewide education organizations estimated that the state would need to increase spending by $1.5 billion just to maintain current education services. The group, which includes state teachers union and groups representing school boards and superintendents, called for a $2 billion increase.

In a statement Tuesday, Board of Regents Chancellor Betty Rosa and State Education Commissioner MaryEllen Elia noted that Cuomo’s proposal was less than half the amount they sought. They promised to work with lawmakers to ensure the final budget amount “will meet the needs of every student throughout our State.”

Anticipating such criticism, Cuomo noted in his speech that he has expanded education spending by nearly 35 percent since taking office. His proposal would bring total school aid to $26.4 billion — the largest portion of the state budget.

Still, that didn’t prevent pushback. A state assemblyman heckled Cuomo as the unveiled his education spending plan, suggesting it was not enough money.

“It’s never enough,” Cuomo shot back.

Will poorer schools get more funding?

Cuomo said he wants to fight “trickle-down education funding” and ensure that poor schools receive their fair share of cash.

To that end, Cuomo wants the state education department and his budget office to review local school district budget plans. The plan is aimed at larger school districts, including New York City, which Cuomo singled out in his speech.

“Right now we have no idea where the money is going,” Cuomo said on Tuesday. “We have a formula. We direct it to the poorer districts. But what did Buffalo do with it? What does New York City do with it?”

It’s unclear how the proposal would impact New York City, which already uses a funding formula designed to send more money to schools with needier students. But some education advocates were intrigued by Cuomo’s idea, which they said could be a way to expose and fight inequities in school funding across the state.

“Right now, school-level expenditure with consistent definitions is really a mystery,” said Ian Rosenblum, executive director of The Education Trust – New York. “It means that a lot of inequity can be swept under the rug.”

Cuomo officials also said that 73.1 percent of funding will be directed to high-needs districts in this year’s budget, which the state said was the highest share ever. Last year, they received 72 percent.

But advocates are more concerned with the state’s “foundation aid” formula, which funnels a greater share of funds to high-needs districts. The formula was created in response to a school funding lawsuit settled more than a decade ago; advocates say schools are still owed billions from the settlement.

Cuomo proposed boosting foundation aid this year by $338 million, a far cry from the $1.25 billion requested by the Board of Regents. Without more foundation aid, some advocates say Cuomo’s promise of greater funding equity rings hollow.

“Equity is you’re actually helping to lift up poor districts so that they can provide an equitable education,” said Billy Easton, executive director of the union-backed Alliance for Quality Education. “Not just that they’re receiving a larger share of a too-small pot.”

What does all of this mean for New York City schools?

New York City is not immune from Albany’s budget crunch.

The total increase proposed for the city — $247 million — falls about $150 million short of the mayor’s projections in November, according to the city’s Independent Budget Office.

It may also be difficult for the city to wrangle funding for big-ticket items. Mayor Bill de Blasio wants to expand his prekindergarten program to 3-year-old students, but he estimates that he will need $700 million from state and federal sources by 2021. (The governor proposed $15 million to expand pre-K seats across the state.)

How about charter schools?

Cuomo would boost spending for charter schools by 3 percent the same rate as for district schools. He also wants to provide more support for schools that rent private space, which is a major financial burden for some schools.

“Once again, Gov. Cuomo demonstrated his unwavering commitment to ensuring every student in our state has access to a great public education,” said James Merriman, CEO of the New York City Charter School Center.