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.