Student Scores: ISTEP and ‘National Report Card’

The Indiana State Board of Education (SBOE) met last month with the plan to set cut scores and finalize ISTEP grades from the 2014-2015 school year. As a reminder, setting cut scores is done by a panel of educators that determines the passing score for that year’s test. However, during that meeting, questions were raised regarding the differences between the online and paper-pencil versions of the exam. This was identified in a report submitted to the Indiana Department of Education in early October – yet that report was not provided to the test’s Technical Advisory Committee or the SBOE until right before the meeting. The SBOE then requested a comparison study done by its own test experts to determine any discrepancies. Sarah O’Brien, vice chair of the SBOE, had originally made this request back in July.

SBOE – after the comparison studies were in hand – set pass-fail benchmarks for the latest ISTEP scores. What’s anticipated is that a notable increase in students will see drops in their scores, with a portion falling below the pass line. While no one wants to see test scores go down, it is explainable as students and teachers were adjusting to the new, more rigorous academic standards and a new assessment that were adopted for the same school year. In other words, this drop is expected, and many other states have experienced similar decreases. In fact, Indiana’s scores were either on par or higher than other states that have recently adopted new standards and/or a new assessment. While the news of dropping ISTEP scores is disappointing, it is important to note that the changes to the standards will benefit students as they will be more prepared for college and career in the future. The Indiana Chamber appreciates all of the hard work of Indiana teachers and students.

Due to this somewhat turbulent transition year, Gov. Pence released a letter to Superintendent of Public Instruction Glenda Ritz and SBOE members recently stating that he is working with leadership in the Indiana General Assembly to have legislation drafted to ensure that the 2014-2015 test results would not negatively impact teacher evaluations or performance bonuses this year. The Chamber has a longstanding policy to support accountability and transparency for students and teachers but understands that unforeseen circumstances with ISTEP delays and testing issues would allow the need for this pause.

Positive news:

The recently-released National Assessment of Educational Progress (NAEP) scores – aka a “National Report Card” – shows that Indiana is achieving more than other states in all four categories:

  • Fourth grade math: Indiana 248; national average 240
  • Eighth grade math: 287; 281
  • Fourth grade reading: 227; 221
  • Eighth grade reading: 268; 264

Indiana is actually widening its advantage over other states. We commend our teachers and school administrators for their important role in helping our students reach these higher levels of achievement.

While our ISTEP scores are lower as expected, these NAEP scores reinforce that our students are achieving at a higher overall level than many of their counterparts. We expect that to accelerate going forward with the enhanced college and career ready standards in place.

Lawmakers Hear from INDOT on Road Funding; Gov. Makes $1 Billion No-Tax Proposal

30449450Two key events in recent weeks on the transportation front in Indiana: A long-awaited Indiana Department of Transportation (INDOT) study on long-term funding options for Indiana’s roads, highways and bridges was presented on Oct. 15 to the Interim Study Committee on Roads and Transportation; and just a few days before, on Oct. 13, Gov. Pence proposed a $1 billion, four-year plan for short-term transportation needs whose most prominent feature was no tax increases. INDOT Commissioner Brandye Hendrickson appeared with the governor at his announcement and testified before the interim study committee.

Hendrickson provided a broad overview of the state of Indiana’s roads and bridges during her testimony and INDOT’s study vendor, Cambridge Systematics, testified at length on the options available to the state to address long-term transportation funding, concluding that policymakers need to “decide what Indiana should invest in and how best to pay for it.” Both federal and state highway revenues are expected to decline in future years due to a number of factors, including increased fuel efficiency standards and more alternative-fuel vehicles hitting the roads.

All fuel excise tax revenues from the state’s highway fund are required for maintenance of existing infrastructure; no funding is available for expansion projects such as completion of I-69, adding lanes to I-65 or I-70, or new bridges across the Ohio River. Additionally, more than half of the state’s bridges are in the last 25 years of their useful life (50-plus years or older) and will need significant reconstruction or remediation in coming years.

Bottom line: The state needs more revenues to address a growing need for maintenance of existing infrastructure – let alone expansion of the state’s highway network.

Pence proposes a mix of bonding (debt), general fund appropriations and use of the state’s reserves in his “21st Century Crossroads” plan. His proposal would seek $450 million over three years to be appropriated by the General Assembly from the state’s general fund, $250 million to be used from the state’s reserve funds, $50 million from the state’s Next Generation Trust Fund (established by Major Moves monies) and roughly $240 million in new bond financing as existing debt gets retired or refinanced. The plan is short term in nature and, while tapping appropriate sources, needs the consent of the Legislature (where several Statehouse voices expressed reservations about the bonding aspect of the plan).

The Indiana Chamber would like to see a mix of increased fuel excise taxes, indexation, tolling, fees on alternative fuel vehicles and other tools based upon a “user fee” model discussed in the 2016 legislative session, along with the use of existing tax authority by cities, towns and counties to address the needs of local streets and county roads. Policymakers must make some hard choices with the support of the state’s business community to address the scale and scope of the challenge.

In short, the era of strategic investments fueled by the Major Moves program is over. The prevailing (default) practice of making stop-gap appropriations from the state’s general fund is not a reliable or strategic means to pay for future maintenance and upgrades to Indiana’s surface transportation network. Currently, we risk wasting strategic investments already made, and our roads and highways will deteriorate along with our reputation as “The Crossroads of America.”

Chamber Applauds Early Payoff of the Federal UI Trust Fund Loan

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on Gov. Mike Pence’s approval of an early payoff for the state’s federal unemployment insurance (UI) trust fund loan. This is to be accomplished by temporarily borrowing from Indiana’s reserve funds during the next eight months. The funds will be paid back by employers through their regular state UI payments:

“This allows Hoosier employers to save $126 per employee or an additional $327 million in total federal penalties for 2016. That’s very significant for the business community. That money now can be reinvested by growing companies and adding more jobs.

“In the last few weeks alone, we’ve heard from several hundred businesses all across the state about how important this early payoff is to them. They appreciate the efforts of lawmakers to place this option in the state budget and the State Budget Committee and Gov. Pence for their actions to make it happen.”

State Board of Education — New and Improved?

The revamped Indiana State Board of Education met on June 1 with very little fanfare or drama compared to previous board meetings. The new board follows the passage of SEA 1, authored by Sen. Travis Holdman (R-Markle), which required a change in
the composition as well as a reconstitution of the board.

While the Indiana Chamber was happy for a productive meeting in June, only time will tell if this cooperation will last long term with a majority of the board members being appointed by the Governor and with Superintendent Glenda Ritz’s recent announcement to run against Gov. Pence in 2016. They have very different philosophies when it comes to education policy.

As a reminder, the Indiana Chamber publicly supported the House version of the legislation that simply allowed the State Board to elect its own chair, HB 1609 authored by Rep. Jud McMillin (R-Brookville). We felt this was the most simple and straightforward way to fix the problems that had been occurring with the State Board over the past two years. However, the Senate version of the bill was the vehicle chosen to move through the legislative process so we worked diligently to make sure the bill was in the best shape possible.

The legislation, signed into law by Gov. Pence on May 7, included a 2017 implementation date for electing a new chair of the State Board, the creation of a vice chair of the board that shares agenda-setting responsibilities with the chair (which we expect to be elected during the July board meeting) and changed the makeup of the board itself. The Governor’s appointees decreased from 10 to eight, with two legislative appointees added – one by the Speaker of the House and one from the President Pro Tempore.

Gov. Pence reappointed the following three new members to the State Board:

  • Eddie Melton – a resident of Merrillville (First District), Melton works as manager of federal governmental relations and community relations at NIPSCO. He was also appointed by the Governor to serve on the Commission on the Social Status of Black Males and serves as the Midwest regional director on the American Association of Blacks in Energy.
  • Dr. Vince Bertram – a resident of Zionsville (Fifth District), Bertram serves as president and CEO of Project Lead The Way, the nation’s leading provider of K-12 STEM programs serving more than 6,500 elementary, middle and high schools across the country. Bertram is the former superintendent of the Evansville Vanderburgh School Corporation and was appointed by the U.S. State Department to be the STEM education expert for the United States Speaker and Specialist Program. Bertram also serves on the Indiana Chamber’s K-12 policy committee.
  • Lee Ann Kwiatkowski – a resident of Greenwood (Ninth District), Kwiatkowski currently serves as superintendent for school improvement at the Metropolitan School District of Warren Township in Indianapolis. She is also a former staffer at the Indiana Department of Education where she served in such roles as director of school turnaround, director of differentiated learning and director of the Title I

The reappointed members of the State Board include:

  • Dr. David Freitas – a resident of Granger (Second District) and has served in higher education for over 30 years including time spent as a university vice provost, dean of education at four universities and dean of the schools of business, fine arts and technology.
  • Cari Wicker – a resident of Uniondale (Third District) and a sixth-grade language arts and social studies teacher at Riverview Middle School in Huntington.
  • Sarah O’Brien – a resident of Avon (Fourth District) and a fourth-grade teacher at River Birch Elementary School.
  • Gordon Hendry – a resident of Indianapolis (Seventh District) who serves as first vice president of CBRE, Inc.
  • BJ Watts – a resident of Evansville (Eighth District) who teaches in the Evansville Vanderburgh School Corporation.

The Governor did not re-appoint Tony Walker, Troy Albert or Brad Oliver, while members Andrea Neal and Dan Elsener (the Indiana Chamber’s current chair of the K-12 policy committee) requested that they not be considered for reappointment.

Speaker of the House Brian Bosma (R-Indianapolis) appointed Dr. Byron Earnest to the board. Earnest was Indiana’s 2010 Teacher of the Year, is the current head of schools for Hoosier Academies and is the former principal for Manual High School in IPS. President Pro Tempore David Long (R-Fort Wayne) appointed Steve Yager of Fort Wayne, who is the former superintendent of Southwest and Northwest Allen County Schools.

A Look at Indiana State Budget Estimates

19145168The monthly revenue estimates referenced in connection with Indiana’s state budget and commonly used to evaluate how Indiana is doing can be confusing because they change periodically and result in different baselines. First, there are the estimates on which the budget is formed – those established by the revenue forecasters in mid-April each year that a two-year budget is put together by the Legislature. And then there are the most recent revised estimates – updated by the forecasters each December.

If you look closely enough at the reports from the budget agency each month, you can discern the differences. Appropriately, the budget agency compares the actual monthly collections to the most recent updated estimate. But if you go beyond their summary, commentary and main chart you can find out how the monthly revenues compare to the original numbers on which the budget was formed.

Since we are now into the last month of fiscal year 2015 and the last month of our current two-year budget that was written in April of 2013, it seems a good time to look at just how well those forecasters did. While the numbers fluctuate considerably from month to month, with 11 of 12 months actual collections known, they are off by less than 1% (just .8 of a percent.) They projected collections of $13,152,600,000 and actual year to date collections were $13,042,800,000. They were off by $109.8 million, or eight-tenths of a percent, statistically as good as anyone can reasonably expect. In fact, it is pretty extraordinary and the forecasters are to be commended for such accurate work. Good, reliable projections are important to the fiscal integrity of our state.

And our fiscal picture doesn’t look bad at all right now. The collections now stand at $211.3 million or 1.6% above the revised/updated projections (those made in April of this year.) But it is not the estimates that are the real indicator of how the state is doing. It is a comparison of actual year-to-date collections that show actual growth. Those same monthly reports also show how the current fiscal year-to-date collections compare to the actual collections through the same period of the prior fiscal year. With the fiscal year nearly complete, Indiana is 3.6% above the prior fiscal year collections. And most encouraging is the 4.4% year-to-date growth in sales tax (our biggest revenue stream) and the 6.9% growth in individual income tax (the next biggest).

Boiling all this down there are two points: (1) the state forecasters do a great job, and 2) the present fiscal picture of the state looks good.

Chamber on Federal Approval of HIP 2.0 to Satisfy ACA Requirement

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the federal Centers for Medicare & Medicaid Services giving the green light to the Healthy Indiana Plan expansion (HIP 2.0), which is in lieu of traditional Medicaid expansion required under the Affordable Care Act (ACA).

“We are very pleased that the Centers for Medicare & Medicaid Services (CMS) appreciated Indiana’s unique brand of addressing the needs of our uninsured population and recognized HIP 2.0 as the best option for Indiana to expand health care coverage. The Indiana Chamber had reviewed HIP 2.0 and urged CMS to approve it.

“HIP provides reimbursement to health care providers at Medicare rates. Otherwise, health care providers recover such losses by increasing prices for private sector employers and their employees through cost shifting. Any attempt to lessen that cost shift is welcome.

“What’s more, the approval of HIP 2.0 will provide health care coverage for tens of thousands of additional Hoosiers and bring billions of dollars into Indiana’s economy.

“We applaud Gov. Pence and his administration for recognizing that HIP 2.0 was the best course for the state and for staying firm in that belief.”

Regional Power: New Initiative to Help Leverage Core Cities for Regional Growth

IGov. Mike Pence recently allocated a total of $84 million in the 2016-17 budgets to help fund the Regional Cities Initiative. Led by the Indiana Economic Development Corporation, the plan will take what the organization learned by consulting 11 economically successful cities of varying sizes in the U.S. to help Indiana’s regions develop their own approaches to increasing economic growth.

While the state is helping, each region will be allowed to autonomously craft its own approach — and define what areas each region encompasses, for that matter.

I had the privilege of writing about this innovative concept in our latest BizVoice magazine. State officials hope this will help Indiana’s cities and nearby rural areas thrive by enhancing many factors, most notably “quality of place.”

Pence’s Education Agenda to Take Center Stage — Should Include More Investment in Preschool

The Indiana Chamber’s Executive Committee recently voted to support Governor Pence’s education agenda in principle. The agenda represents an important first step in increasing the focus in Indiana’s K-12 education system to our state’s young people and allowing them to prosper through high-performing teachers and schools.

The list below represents the Governor’s education goals:

  • Increase the base funding per pupil
  • Build on the successful performance funding in the last budget
  • Support efforts by the Commission for Higher Education to expand the performance-based model of funding for universities
  • Allow schools to choose to become “Freedom to Teach Schools – whereby they can improve educational performance by providing more flexibility to superintendents, principals and teachers by easing laws, policies and regulations through waivers granted by the State Board of Education
  • Adjust funding for public charter schools that will allow more communities to offer more choices for families and their kids, and attract more investment for education innovation in Indiana
  • Improve Indiana’s school choice program by lifting the cap on the dollar amount for vouchers and support efforts to raise the cap on the choice scholarship tax credit program
  • Work with legislators to act on the State Board of Education’s recommendations to develop a new, strategic approach to turning around failing schools
  • Increase the amount of money, public and private, to give students more career and technical education opportunities
  • Change how the state funds career and technical education courses, basing funding on performance and relevance instead of enrollment alone
  • Give the State Board of Education authority to elect its own chair

The last bullet item would be a good step if the longstanding Chamber priority of making the state superintendent an appointed position is not enacted. There needs to be, at a minimum, some level of surety that the State Board of Education will function more smoothly and stay on task.

The one area where the Indiana Chamber differs with the Governor’s education agenda is on preschool; he is seeking $10 million a year in this next budget to fund pre-K scholarships for the five pre-K pilot counties.

The Chamber believes the pilot program is not adequate. Indiana has large numbers of children entering kindergarten unprepared to learn. This ultimately impacts all Hoosier students as schools are forced to deal with wide gaps in achievement levels.

The state needs to provide robust funding that will help all low-income parents access education–based preschool programs. Prudent financial decisions are necessary in budget sessions but so too is investing where it makes sense, like in statewide preschool.

Preschool Critical for Early Childhood Development — Take Action

POne of the most important steps Indiana can take to improve education and eliminate the achievement gap for low-income and disadvantaged children is to expand publicly-funded preschool opportunities.

Every year, thousands of disadvantaged children arrive in kindergarten classrooms woefully unprepared to learn. Schools struggle to help these kids catch up, but so many fall behind and a destructive cycle of frustration and failure takes stubborn hold of their educational lives. The educational and social costs of student failures, dropouts and being ill-prepared for a career are staggering.

Less than a quarter of Indiana children attend preschool and about one in seven don’t even attend school until the first grade – one of the lowest early education rates in the nation. Only eight states fail to provide at least partial state funding for educational preschool programs. Indiana would be the ninth state but for a very small pilot program created just months ago.

If we want students to graduate high school and be college and career ready, that means starting these students along the proper education road as soon as possible.

Please take a moment to send an email message to your state legislators to support creation of a statewide preschool program. Legislative leaders of both parties have expressed strong support, but they need to know business leaders care. This is a budget-making year in the Indiana General Assembly. Now is the time to act to make an investment in early childhood education in this state.

Eliminating educational achievement gaps – starting with preschool and especially for disadvantaged populations – is one of the goals in the Indiana Chamber’s Indiana Vision 2025 economic development action plan.