Focus on Dollars for Students, Not Districts


The following is a column penned by Derek Redelman, our VP of education and workforce policy, that appeared in several Indiana newspapers. The piece continues to draw attention; see it here in the Muncie Star Press.

It is a myth that suburban and charter schools are favored by the state budget that was just adopted, while Indianapolis Public Schools and other urban districts "took it on the chin,” as the Indianapolis Star article elsewhere on this page phrases it.

In reality, the winners of this state budget are overwhelmingly urban districts like IPS. Sure, some of those districts will face funding cuts; but those cuts are disproportionately small compared to their losses in enrollment. Conversely, growing districts will receive increases, but those increases are disproportionately small compared to their increases in enrollment.

IPS, which is projected to lose nearly 4,000 students over the next two years, will start with $8,580 per student, or $9,429 when federal funds are included. Over the next two years, those amounts rise to $9,014 and $10,254, respectively. (These numbers include all state funding but do not include funds from property taxes).

That’s an increase of five percent in base funding and 8.2 percent when federal funds are included. Cumulatively, that means that continuing students in IPS will receive an increase of more than $13.6 million in baseline funding and more than $26.5 million when federal funds are included.

Contrast that with Hamilton Southeastern, which is projected to gain more than 1,600 students. The district starts with only $5,762 per student and just $5,784, including federal funds. Over the next two years, those funding levels actually fall to $5,701 and $5,772, respectively.

That’s a decline of 1.1 percent in base funding and 0.2 percent when federal funds are included. Cumulatively, Hamilton Southeastern students will lose more than $1 million in baseline funding or just under $300,000 including federal funds.

By the logic of urban school leaders, these enrollment changes are irrelevant. Based solely on changes to district-level funding, they suggest that urban districts will "suffer" while suburban districts and charter schools will be "the winners."

Where does that logic end? If IPS had lost half its students and Hamilton Southeastern had doubled its enrollment, would urban school leaders insist that each of their budgets remain unchanged?

Consider this from another perspective: IPS students will start the current budget period with funding levels that are 132 percent of the state average or 140 percent when federal funds are included.

Over the next two years, those levels will rise to 137 percent and 148 percent, respectively.

Meanwhile, Hamilton Southeastern students start with funding that equals 89 percent of the state average, or 86 percent when federal funds are included. Those levels will actually fall to 87 percent and 84 percent, respectively. So the urban districts start with far more money than the state average and their advantage over suburban schools actually grows.

Much of this disparity in funding is driven by historical mechanisms in our funding formula that were designed to protect districts with declining enrollment from losing funds. The Department of Education estimates that this year our state will pay districts for more than 16,000 students they no longer educate, costing more than $30 million.

That approach might have been a luxury that the state could afford in better financial times; but it would be irresponsible to do that today. As 30-plus states are facing cuts for K-12 education — some by double-digit percentages — Indiana’s school leaders ought to be grateful for the fiscal management that has protected them from the same fate. Focusing on students, rather than districts, is a continuation of sound fiscal stewardship.

The Indiana Chamber agrees with those who have called for a comprehensive review of our state’s school funding formula. We also agree with those who suggest that urban districts need more money per student to address special challenges of their students.

The overall focus should be on students, not districts. Urban school leaders are working hard to keep us away from that focus, and unfortunately, the Indianapolis Star’s coverage of this issue feeds right into their hands.

Derek Redelman is vice president of education and workforce development policy for the Indiana Chamber of Commerce.

Where does that logic end? If IPS had lost half its students and Hamilton Southeastern had doubled its enrollment, would urban school leaders insist that each of their budgets remain unchanged?

Consider this from another perspective: IPS students will start the current budget period with funding levels that are 132 percent of the state average or 140 percent when federal funds are included.

Over the next two years, those levels will rise to 137 percent and 148 percent, respectively.

Meanwhile, Hamilton Southeastern students start with funding that equals 89 percent of the state average, or 86 percent when federal funds are included. Those levels will actually fall to 87 percent and 84 percent, respectively. So the urban districts start with far more money than the state average and their advantage over suburban schools actually grows.

Much of this disparity in funding is driven by historical mechanisms in our funding formula that were designed to protect districts with declining enrollment from losing funds. The Department of Education estimates that this year our state will pay districts for more than 16,000 students they no longer educate, costing more than $30 million.

That approach might have been a luxury that the state could afford in better financial times; but it would be irresponsible to do that today. As 30-plus states are facing cuts for K-12 education — some by double-digit percentages — Indiana’s school leaders ought to be grateful for the fiscal management that has protected them from the same fate. Focusing on students, rather than districts, is a continuation of sound fiscal stewardship.

The Indiana Chamber agrees with those who have called for a comprehensive review of our state’s school funding formula. We also agree with those who suggest that urban districts need more money per student to address special challenges of their students.

The overall focus should be on students, not districts. Urban school leaders are working hard to keep us away from that focus, and unfortunately, the Indianapolis Star’s coverage of this issue feeds right into their hands.

One thought on “Focus on Dollars for Students, Not Districts

  1. There are two reasons that public government run schools do not want funding tied directly to the students.

    1) If individuals were to be considered on a case by case basis, it would prove for all to see, that some children are getting much more money than others. Start with free/reduced lunch money and keep on going! These students will invariably still be doing fair to poorly on average in the poorer school districts. IF people see that SOME kids are getting 10,000+ and doing worse than other kids who getting $8,000 … strife will ensue.

    2) Once money is tied to individuals, then it’s the slippery slope (that Democrats usually use to get their policies in place over time) to simply agreeing that vouchers are the way to go. And that, my friends, is all you need to know about why funding ideas that make sense, will never make it into law.

    B. B. Bennett

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