The Boring School Financing Bill That Could Change Everything

Kyle Stokes / StateImpact Indiana

How many students do you count in this photo? (Taken at Indianapolis' Washington High School)

Even for those who care deeply about education issues, any talk about school financing is generally enough to make anyone’s eyes glaze over.

Student count dates? Yawn. School funding formula? Big yawn.

This year, stay awake for the discussion. A change to how the state counts students — a change that has all the legislative support it needs to pass — could mean two out of every three Indiana school districts could see reductions in their state funding come 2013.

Indiana education officials currently pick one date each year (in September) to count the number of students attending public schools, using the number to determine how much state funding each district receives.

Assuming the right-to-work bill doesn’t grind the Indiana General Assembly to a complete halt, legislative experts believe lawmakers will likely pass a bill adding a second count date this session.

Still considering hitting the snooze? Consider this: Two count dates would mean — for the first time ever — Indiana districts wouldn’t get a constant level of state funding through the school year. If the bill passes, funding levels would fluctuate with the natural ebb-and-flow of students entering and leaving schools through the year, making every district’s budget process much less predictable.

‘Reghost’-Busters

“This is a huge change,” says Libby Cierzniak, a partner at Baker & Daniels who lobbies the legislature for Indianapolis Public Schools.

“Huge,” because as recently as last year, state education officials would determine a district’s per-student funding allotment using a method that took a great deal of volatility out of a district’s budgeting process.

Instead of a kid-for-kid headcount, the state would use a three-year rolling average of the number of students a district enrolled — a practice shorthanded by legislative types as the “reghoster.”

Wait a minute — “ghost” students? Rolling averages? Why make counting kids so complicated? Cierzniak explains to StateImpact:

There’s a recognition that a school district gets 100 new children from one year to the other. If they’re scattered over several different schools, the school district isn’t going to do anything different. They’re not going to open a new classroom — it probably wouldn’t make sense to do so, since you’ve got 2 students [at one school], 2 students [at another]. The same goes if you lose 100 students.

By the time you count, by the second or third week in Septmeber, you’ve hired new teachers, you’ve got your boundaries set… [The reghoster] was a recognition on the part of the legislature that if you’re a declining enrollment school district — or even a rapidly growing school district — it’s going to take a few years for you to either add the new schools or close schools and redistrict to really make the kind of savings you’re going to need to adjust to the reductions in funding.

Contrast the “reghoster” method of counting students with the proposed new method.

The rolling averages get thrown out the window. The bill before the Indiana General Assembly instead proposes taking two headcounts in September and January. A change from one headcount to the next would mean the amount on the state’s checks to districts in the fall could be different from the amount on the state’s checks in the winter and spring.

Why The Bill Will Pass

A Legislative Services Agency report says 200 Indiana school districts would see their state funding decrease in 2012 if the bill passes, while 143 other districts would see their state funding increase. 15 other districts would see no change, the analysis finds. Understandably, this change has districts concerned, Cierzniak says.

But the bill is still likely to pass for two other reasons:

So-called ‘market-based reformers’ generally like this idea. Those who support close ties between education policy and free market principles want a district’s state funding to accurately reflect the number of students actually enrolled in its schools. Their common refrain is that ‘state education money should follow kids.’

[bill id=”SB 280″ state=in session=”2012″ align=right]

David Dresslar, director of the non-partisan Center of Excellence in Leadership of Learning, agrees with this idea.

“Enrollment should dictate state aid, and the more accurate you can be in providing the grant to schools based on enrollment, the better off you are,” Dresslar tells StateImpact.

Indianapolis Public Schools officials believe the district could potentially benefit from the policy. In October, IPS superintendent Eugene White accused charter schools of enrolling Indianapolis students for the sole purpose of receiving state funding for them.

White says he has evidence that charter schools then end up “dumping” the students later in the year. The students end up in IPS, but the state funding stays in the charter school that allegedly “dumped” the student.

Cierzniak — who, again, represents the district before the legislature — says the bill “cuts both ways for IPS.” Students tend to migrate out of IPS each year to township or charter schools, which would cut the district’s funding. On the other hand, if the district’s charter-dumping accusations are true, the proposal could at least allow IPS to receive state funding to educate these students.

“Right now, in IPS, without a reghoster, the overall cost of just keeping the lights on are spread among fewer students, which actually takes dollars away from the classroom,” Cierzniak says.

Dresslar doubts accusations of widespread charter-dumping are true, but says they “might have happened in some isolated cases.” But Dresslar and Republican House Speaker Brian Bosma both say multiple count dates would increase “fairness” in Indiana’s school funding formula.

“I think [the charter-dumping accusation] is really a red herring that opponents of charter schools throw up a lot. Let’s deal with it. Let’s have multiple count days,” Bosma told the Evansville Courier & Press in November.

The bill, SB 305, is due up for a hearing in the Senate Education & Career Development Committee on Wednesday.

UPDATE: This post only refers to SB 305, which was the only bill on the Senate committee schedule at post time. After the post — just before noon Monday — Senate Bill 280 was added to the Senate Education & Career Development Committee docket. The bill also proposes two student count dates, but includes other changes to state school funding statute.

ANOTHER UPDATE: (January 18) Under the heading of SB 280, this bill will move into the Senate Appropriations committee. We’ve changed our bill tracker module above to reflect this change.