School Finance

Compact model of school finance plan still in the shop

A stripped-down version of last year’s school finance overhaul may soon join the growing line of bills that hope to tap a one-time surplus of K-12 funding.

But that proposal may face resistance from groups that want to increase basic school funding, not pay for new programs, and it may conflict with plans to save some surplus funds for the future.

Sen. Mike Johnston’s Senate Bill 13-213 didn’t go into effect because voters subsequently defeated Amendment 66, the ballot measure that would have paid for it. So the Denver Democrat now is scavenging parts of that plan to build a smaller model he hopes to sell to the 2014 legislature.

Johnston said last week that the bill could be introduced within a few weeks, but the timetable likely depends on how much support Johnston can gather. The bill’s contents are a moving target, and some influential interest groups that have kicked the tires aren’t impressed. Negotiations are continuing.

On the other hand, taking the bill public soon may be necessary to give Johnston’s ideas visibility in the discussion over how to use what could be as much as $1 billion available in the State Education Fund (SEF), an account that’s dedicated to K-12 spending.

“We need to make our case in the midst of all the other education debate,” said Johnston, who is working on the bill with Rep. Millie Hamner, D-Dillon, and Rep. Carole Murray, R-Castle Rock.

Six bills with a combined draw on the SEF of $40 million already have been introduced. Another 10 bills without specific price tags also are in the mix, including potentially expensive plans to expand full-day kindergarten and broaden services for English language learners.

The 2013 coalition is fraying

Johnston’s SB 13-213 and A66 were a big political compromise intended to unite various education interests, from reform groups to school districts, because the $1 billion in new income tax revenue would have paid for some initiatives reformers wanted and for partial restoration of recent years’ budget cuts, something districts wanted. (Refresh your memory on the details in this story from the Chalkbeat Colorado archives.)

Since there’s now no new money for anybody, jockeying for what funding is available has intensified competition among interest groups, and all eyes are focused on the SEF.

The fund is more flush than it’s been in years, primarily because a 2012 law put $1.1 billion in state surpluses into the SEF. Legislative economists project the SEF will contain about $2 billion when the 2014-15 budget year starts next July 1. Some $850 million already is scheduled to be spent, leaving a balance of just under $1.2 billion when the 2014-15 year ends.

Executive branch economists in the Office of State Planning and Budgeting take a more conservative view, estimating there will be $1.6 billion in the SEF at start of 2014-15, $887 million in planned spending and a $712 million ending balance.

Whatever the number, it’s a tempting target for lawmakers, even it’s one-time money, unlike the $1 billion-plus that A66 would have generated for schools every year.

Johnston-Hamner bill would combine key initiatives

While other legislators are proposing individual dips into that pot, Johnston is working to assemble a plan that would combine several spending programs in a single bill.

Those ideas are downsized versions of some programs and spending proposed in SB 13-213, leading some statehouse observers to dub the new measure “Son of 213.” Its reported formal working title is the Student Success Act.

“We have some concepts out there,” Johnston said, without going into details. He noted he’s looking for Republican support for the bill. (Republican lawmakers, Johnston allies on previous education bills, abandoned him last year over SB 13-213 because they opposed the tax increase.)

According to several people familiar with the discussions, the following elements are being considered for inclusion in the bill. The cost is estimated at $230 to $250 million, about half in one-time spending and half in recurring annual costs. As with the elements, the cost is a moving target.

  • Increased kindergarten funding – The bill may include $100 million to increase state reimbursement for kindergarten students as an incentive to expand full-day programs. (Kindergarten reportedly has replaced increased preschool funding as a priority in an effort to gain GOP support.)
  • Reform implementation – Also under consideration is $100 million for districts to help them pay for implementation of new standards, tests and educator evaluations.
  • Early literacy – Districts also could receive $20 million to help fund implementation of the 2012 READ, which requires students to be reading at grade level by the time they enter fourth grade.
  • English language learners – The measure may include $15 million for expansion of services to these students.
  • Enrollment counting – Conversion to the average daily membership method of counting enrollment could get $10 million for technology costs.
  • Financial transparency – Districts also could receive $5 million for the costs of improved spending reporting to the public.
  • Charter school construction – Also under consideration is providing an additional $20-$25 million to charter schools for facilities needs.

Republican lawmakers already have introduced individual bills related to kindergarten funding, English language learners, enrollment counting, financial transparency and charter construction needs. While those bills are unlikely to pass on their own in the Democratic-majority General Assembly, including those issues in his bill could give Johnston a lever to gain some GOP support.

Districts push back on earmarked funding

Plans to dip into the SEF face two big hurdles.

The first is the push by the Colorado Association of School Boards, the Colorado Association of School Executives and the Colorado Education Association to reduce the “negative factor,” the formula used by the legislature to reduce annual school funding from how the state funding formula otherwise would have calculated it. It’s a device used to balance the overall state budget.

Wish list for SEFVarious bills propose to tap the fund to pay for such things as:
  • Data upgrades
  • ECE quality improvement
  • Charter facilities
  • Teacher bonuses
  • Gifted & talented
  • Financial transparency
  • Full-day kindergarten
  • School meals
  • Enrollment count system
  • ELL program expansion

Gov. John Hickenlooper’s revised 2014-15 budget proposal calls for $5.7 billion in K-12 spending, including $3.78 billion in state funds. That would be a $241.1 million increase over this school year. On top of that districts would receive $276.7 million in what’s called categorical funding, money that’s earmarked for ELL students, special education, transportation and certain other costs.

The current negative factor is estimated at $1.004 billion. The governor’s budget would take it to about $1.002 billion next year.

In the wake of A66’s defeat, district interests are pushing hard to use any extra money to “buy down” the negative factor and not to fund new programs like Johnston is proposing.

The school boards group is pushing for a buy down of at least $100 million, and the Denver Area Superintendents Council is suggesting a $275 million increase in school spending, most of it to reduce the negative factor and some of it to increase support for at-risk students. A newly formed group of high-poverty districts also may push for additional at-risk funding.

Without some movement on the negative factor, key education interest groups are highly skeptical about Johnston’s bill-in-progress. District lobbyists say they aren’t getting much sympathy about the negative factor from Democratic leaders, at least in the House.

Spend now or spend later?

The second hurdle to big raids on the SEF is the desire by the Hickenlooper administration and legislative budget writers to maintain a healthy balance in the fund as a cushion against education spending needs in future years, especially if the economy takes a downturn.

K-12 schools are funded by a combination of money from the SEF and the state’s main General Fund. If the schools spending base is increased, even if that initially comes from the education fund, the General Fund bears most of the burden in future budget years. That’s because the state constitution requires base funding to increase by enrollment and inflation every year.

SEF primer

The administration would like to leave a balance of about $700 million in the SEF at the end of 2014-15, letting it decline to $400 million at the end of 2017-18. (In addition to the one-time infusion of cash, the SEF receives an annual share of income tax revenues totaling more than $500 million a year.) Keeping a healthy balance in the education fund allows budget writers to reduce the pressure of K-12 spending on the General Fund.

So lawmakers face a three competing interests when they consider school funding this session – new programs, reducing the negative factor and saving for future education costs.

The riddle likely won’t be answered until April, after new state revenue forecasts are issued in late March, after the main state budget bill firms up and after legislative leaders choose the winners from among all the new spending bills proposed by lawmakers, both for education and other state programs.

School Finance

Why some IPS schools are facing big budget cuts, and others are mostly spared from the pain

PHOTO: Dylan Peers McCoy
School 107 is expected to lose about $230,000 next year, one of the larger cuts in the district.

At campuses across Indianapolis Public Schools, principals are grappling with a painful prospect: cutting hundreds of thousands of dollars from their school budgets. And that may be just the beginning.

The district is looking to cut about $21 million from its $269 million general fund budget for 2018-19, including about $8.9 million that will come from budgets for schools and certified staff such as teachers, according to a preliminary budget document. Officials declined to give school-by-school breakdowns until they are finalized later this summer.

The district initially planned to fill its budget gap by asking voters for nearly $1 billion in extra funding in May, but after the proposal received little support, the board first shrunk and then delayed the request. The cuts that begin next year could continue if the state’s largest district isn’t able to find other savings or win voter support for a referendum to increase taxes and school funding in November.

“We have the hope of a referendum,” said Weston Young, the district’s chief financial manager.

Chalkbeat has the details on what types of schools are expected to lose the most, what schools might cut, and what this means for the future of the district.

Big schools — including high schools — are taking the brunt of the cuts.

When it comes to cutting spending, large schools are carrying more of the burden, according to the preliminary documents. That includes middle and high schools, as well as some elementary schools. At some of the district’s smallest campuses, however, officials say budgets are already too lean for significant cuts.

Indianapolis Public Schools sends money to schools using a formula known as student-based allocation, which gives them funding based on how many students they enroll and student needs. But every school also has a baseline amount of money district officials believe they need to operate.

Small schools that serve wide grade spans, which might only have one class at each grade level, often get extra money to be sure they reach the minimum. In contrast, large campuses typically get enough from the per student formula to be above baseline. On a basic level, the district budget is based around the idea that it costs less per child to educate students in large, efficient schools.

Because of that approach, campuses that were already at minimum funding levels won’t see significant cuts, Young said. On the flip side, however, bigger campuses are shouldering a larger share of the cuts.

That could be bad news for the four high schools that will remain open in the fall. The schools will be among the largest campuses in the district, and they are expected to face significant cuts.

Last month, Superintendent Lewis Ferebee told Chalkbeat that cuts would not damage the effort to revamp high schools because, in addition to baseline funding, the schools will have donations from private partners such as Salesforce.

“Obviously, we won’t have all the resources that we’d like to have,” he said, “but we will be in a good position come August of 2018.”

Magnet schools and career and technical education get extra money — and extra cuts.

On top of their regular budgets, choice programs, such as Montessori, International Baccalaureate, and career and technical education, receive millions of extra dollars each year. That spending is also on the chopping block as the district cuts costs.

But because the district had already planned spending on those programs and some areas are easier to reduce than others, cuts won’t be spread evenly, said Aisha Humphries, director of budget and strategy for the district. In Montessori schools, for example, instructional assistants are integral to the model, she said. In order to cut that, the district would have to change the school model.

“When you do budget cuts, it may be that we want to cut equally and make everybody feel the pain equally,” Humphries said, “but you may not be able to do that.”

But there are other areas where the district can more easily cut back, Humphries said, such as by reducing the number of foreign languages offered in middle school.

Schools are giving up technology, teachers, and other staff.

As the district cuts budgets, principals ultimately decide what painful trade offs to make. Under the new budgeting approach the district rolled out this year, principals are given a set amount of money, and they have control over how they spend most it. If a principal wants to make class sizes slightly larger to pay for a school social worker, for example, they can. When it comes to budget cuts, the approach is the same.

“They are still in the driver’s seat,” Young said.

When schools got budgets earlier this year, they were built on the assumption that the district would win the May referendum. But principals knew that additional funding might not come through, and some planned for potential cuts when they created their budgets, Young said.

When principal Jeremy Baugh learned School 107 is expected to lose about $230,000 next year, he already had some potential cuts in mind. The school will cut back on new technology, instructional supplies, and professional development. Baugh also won’t go through with his plan to hire two new educators.

School 107, which enrolls just over 600 students, is expected to have one of the larger budget cuts in the district. But in part because the school is growing and will get more money for those new students, he doesn’t expect to cut current staff.

“We didn’t have to make significant cuts that were impacting staff right now,” Baugh said. “So we felt pretty lucky.”

School Finance

How much are Indianapolis teachers paid? Here are the highest and lowest paid districts in the city

PHOTO: Alan Petersime

As teachers across the country rally for more education funding and higher salaries, policymakers and the public are paying renewed attention to how much educators are paid.

Nationwide, stagnant teacher pay coupled with plentiful well-paying openings in other fields means that it’s even harder for principals and administrators to fill open positions. For some teachers, low pay is one reason they leave the classroom altogether, whether to become administrators or find another career.

In Indiana, cash-strapped districts often struggle to pay for raises even for their current staff — making it difficult to retain teachers. Educators in Indianapolis have lots of schools to choose from, and teachers can increase their pay by heading to nearby districts.

Educators in Indiana school districts made an average of about $48,743 last year, according to the Indiana Education Employment Relations Board. Pay is higher in districts in the state’s capitol, but it varies widely, with educators in the lowest paying district earning about $11,000 less on average than teachers in the top paid district. (The board only collects data on districts with teachers unions so it does not include average pay for teachers in charter schools.)

When teachers with particularly high demand skills switch jobs, they can also boost their earning by moving higher on the pay scale.

Average teacher pay in Marion County 2016-17

Source: Indiana Education Employment Relations Board collective bargaining report. (Image by Sam Park)

One reason why average pay might be higher in some districts than others is because the pay scale is higher. Starting pay in Beech Grove Schools, for example, is $38,000 per year. In Speedway Schools, a district with consistently high pay, teachers earn a minimum of $44,252.

Minimum teacher pay in Marion County 2016-17

Source: Indiana Education Employment Relations Board collective bargaining report. (Image by Sam Park)

The gap is even wider for experienced educators. In Indianapolis Public Schools, the pay scale sets the maximum salary at $72,740. That’s almost $14,000 less than the max pay for teachers in Speedway — $86,702. (Some teachers may earn more because they are still paid based on older pay scales with higher caps.)

Maximum teacher pay in Marion County 2016-17

Source: Indiana Education Employment Relations Board collective bargaining report. (Image by Sam Park)

But there’s another reason why some districts have lower average pay than others — they have more inexperienced teachers. Both Beech Grove and Indianapolis Public Schools have higher floors and ceiling for pay then they did in 2013-2014. Nonetheless, the average pay in those districts has declined, likely because they have more inexperienced teachers with lower salaries.

This year, both districts have relatively high numbers of teachers in their first year, according to data from the Indiana Department of Education. In Indianapolis Public Schools, nearly 10 percent of certified educators are new to the classroom. In both Beech Grove and Warren Township Schools, about 7 percent of educators are new.