Education, From The Capitol To The Classroom

Why Governor Daniels Thinks Small School Districts Should Consolidate

Office of the Governor

Governor Mitch Daniels backed a piece of legislation which would have forced schools with low enrollments to consolidate with neighboring districts. The bill was eventually defeated.

About 20 percent of school districts in the state are rapidly facing a choice: either pass a referendum or consolidate with a neighboring school district.  In 2007, Governor Mitch Daniels commissioned a study titled “Streamlining Local Government” (also known as the Kernan-Shepard Report). Among other findings, was a simple suggestion– eliminate all school districts with fewer than 2,000 students.

Based on this report, Daniels backed a package of legislation which would have forced consolidation on a number of Indiana’s small school districts.

We bring you three major educational conclusions from that report.

1. Small Schools Are Inefficient

According to the study, schools account for 54 percent of all the property taxes collected in Indiana.  That revenue is spread among the state’s 293 districts.  The survey concluded consolidating school districts below a certain level of enrollment would streamline the cost of education by eliminating administrative staff needed to run multiple corporations. According to the report, Indiana is above average when it comes to the percentage of administrative and support staff per teacher.  This includes positions like cafeteria worker, bus driver, and janitor.

The bill that would have forced consolidation died in the General Assembly.  David Dressler, with education policy think tank Center for Excellence in Leadership in Learning, says the governor may still be pursuing this agenda through budget cuts and changes to Indiana’s property tax code.

“It is a structural problem for school corporations and for that matter for municipalities and other governmental units,”said Dressler. “These caps will continue to cut into revenues and revenues will continue to cause them to be able to offer less in terms of programming.”

While the Kernan-Shepard report calls for a structured transition to consolidated school corporations, Dressler says the route pursued by the governor’s office is more like death by a million cuts.

2. Small Schools Cannot Provide A Comprehensive Education

Small school corporations are unable to provide the diversity of programing available at larger districts.  Administrators at many of the state’s smallest school districts admit this is true.

The “Streamlining Local Government” report goes past this, saying many small schools are unable to meet the state’s minimum graduation requirements.

The Rural Schools and Community Trust has taken issue with this claim.  According to a report published on the group’s website, consolidation negatively affects students outside of a school’s home community and is almost always destructive to towns which lose school buildings through the process.

The group points to a number of alternative approaches which allow districts to maintain autonomy while working together with neighboring corporations.  These include co-opertive administrations where districts share superintendents, administrators, and even teachers across school boundaries.  Another alternative is the creation of a county wide agency charged with coordinating curriculums so that district’s can better share services.

3. There Is An Optimal Size For Schools

The report claims that school districts between two thousand and six thousand students represent the ideal balance between efficiency and educational achievement– allowing the district to maintain small class sizes, while still having the resources to offer a variety of programming.  This claim is based on assessment data from the Indiana Department of Education.

Dressler says this may be misleading as many districts of the size mentioned in the report are in suburban areas or in midsize cities.  These communities have been much quicker than smaller school districts in passing funding referendums to make up for any budget shortfalls.  Dressler says this has created a structural system of haves and have nots, since budget cuts always have a smaller affect on communities with a robust and diverse property base.

“The more assessed valuation in the school corporation the lower the rate of increase that a referendum has to have in order to generate a significant amount of funding.”

Similar research from Indiana University’s School of Public and Environmental Affairs shows rural communities are among the least likely in the state to pursue a referendum.


  • Robbelcher

    Perhaps strictly by numbers this appears to be true. I teach at the tenth smallest school district in the state. In addressing the diversity of small schools, their facts are incorrect. Our students have the opportunity to graduate with twenty-four college credits through our Advanced Placement and dual credit courses. So diversity can and does exist in small schools.
    Geography also figures into school size. In metropolitan areas, it is much easier than in rural areas to have schools of 2000 or more students.We have three districts in our rural county. Two of those districts are now in the process of reorganization. If we were to combine all three schools we would barely meet the 2000 student limit. But to achieve that one county school we would have students on a bus for an hour and a half each way (three hours round trip). Will this lead to a better education for our students? I contend that it would not.

    • StateImpact Indiana

      Thanks for the comment Rob.

      If your district could consolidate without closing any buildings, do you think that would be a net benefit to students? I mean, the report is largely focused excess administrative and support staff.

      Playing devil’s advocate, is there any loss of to students if they have one superintendent or three superintendents?

      • Objective Hoosier

        It is true that the schools will be saving money by having one superintendent instead of three, but it is possible that transportation costs in a rural area may nullify these savings. If there are many students that live so far away from the school that they are traveling on the bus three hours each day the school district will likely have a very large fuel bill to pay.

      • Robbelcher

        If consolidation is done properly, there would be benefits to students. For example, one of these two schools does not have an ag program. The ag teacher could be shared between the schools. Students are not directly effected daily by the number of superintendents, so having one county superintendent could be beneficial. In fact Daniels proposed this when I spoke to him. The cost savings would be minimal compared to the cuts the state has already given us. As an aside, I asked this of Daniels as he was in our district because the state was seizing land for yet another state park in our area, thereby removing more property from the tax rolls and decreasing dollars to struggling schools and local government.
        But reorganization leading to consolidation may cost both districts students. I have had parents tell me that if the schools are consolidated, they would live closer to two other districts and would have their children attend a school closer to home. So the consolidation could lead to further decreased funding due to lower enrollment than the separate school had.

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