Budget has been decreased because projected revenues are insufficient to fund the adopted budget.

For the last two year budget cycle the Tax Revenue projections used to build the budget were way off.   It was the perfect storm for schools.  Their ability to support the general fund was taken away with Property Tax reform.  Schools were now relying on sales tax and income tax receipts from the state. The worst economic recession in 50 years hit the state and nation and revenue was no where close to the projections.   This meant the state had to come back to the schools and let them know they would be receiving a cut in funding.  
Having learned the lessons of the past, this year's budget orders and levy certifications were returned from the DLGF/State of Indiana  including the words, "Budget has been decreased because projected revenues are insufficient to fund the adopted budget."  Budgets are being cut by anywhere from tens of thousands of dollars to multiple millions of dollars.  This means the state has very little faith the economy will grow or expand and has very grim tax revenue projections.  What does this mean for schools?  Another round of cuts, eliminations, and reductions are in schools' future.   This is the reality of the current economy. Who will pursue a referendum?  Who will continue to cut programs and services?  School board are stuck with the tough decisions of where further cuts must come from.   This leads to confusion for teachers, parents, and classified staff who thought the worst was behind them.   Next Blog entry will examine possible cost savings presented by pending legislation.   Education legislation is making its way through the Indiana General Assembly.  In a week or two we should have more of an idea about which bills will make it through. 

Pending Legislation

Check out SENATE BILL No. 27: This bill allows for public entities to use their resources to support referendums.   http://www.in.gov/legislative/bills/2011/IN/IN0027.1.html        
This could really help some small districts in their funding needs and helping to organize their community in support of their needs. 

Senate Bill 384 does the exact opposite.  It limits a school district to one operating referendum at once.  It also does not allow anyone under contract with a school district or anyone having a relationship with the district promote the referendum at anytime.   It basically kills a schools ability to organize an operating referendum or capital project.  This is a further attempt to provide a death nail to school's abilities to fund their needs.   This bill is apparently being introduced by Senator Ed Charbonneau who represents Starke and portions of Porter, LaPorte, Marshall, Jasper, Pulaski and St. Joseph counties.

http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2011&session=1&request=getBill&doctype=SB&docno=0384


While not a a funding issue, it is interesting that there is a bill proposing a Statewide Drop Out analysis committee.
http://www.in.gov/legislative/bills/2011/IN/IN0085.1.html

Senate Bill 4 is interesting in that it requires 3 days of professional development per year for teachers and paraprofessionals.  It also really wants some suicide prevention training for school staff. 
http://www.in.gov/legislative/bills/2011/SB/SB0004.1.html

Senate Bill 287 allows for independent contractors to provide adult education for school corporations.   Allows schools to work with this independent contractor to provide education for dangerous students who are 16 or above. 
http://www.in.gov/legislative/bills/2011/IN/IN0287.1.html

Senate Bill 323 removes the obstacle of requiring a local county fiscal body certify a referendum vote.  The school board could do this. 
http://www.in.gov/legislative/bills/2011/IN/IN0323.1.html

Senate Bill 410 allows more transfers from Capital Projects Fund to General Fund.  The Bill allows for up to a 50% transfer.   With limited increases to the capital projects fund and property tax caps, the "well" of cpf. funding is running dry.   Districts will have no ability to fund technology, equipment, or maintain facilities if this keeps up.
http://www.in.gov/legislative/bills/2011/IN/IN0410.1.html

Competition for the Virtual Charter ADM

The last blog entry focused on reflective ideas for current legislative agenda put forward by Dr. Bennett.  This week focuses on the second year of the Virtual Charter started by the 2009 Budget Law.  The DOE wants to see competition between school districts, how about competition for the virtual students?   The current law is focused serving the student populations who may be challenged to attend school.   I ask why not expand the virtual options?   The current funding formula for virtual students funds an ADM at 80% regular tuition support.  However this option is only available to Charter Schools.  

What do you think?  Should public schools be allowed to create virtual programs to compete for those possible virtual students?  For the State it is a win-win in that they are able to pay less for each student in a virtual program than a bricks and mortar school.  

Costs of reform

So I ask the question to all the great minds out there, what are the possible funding implications for public schools to the proposed reforms being "accelerated" by Dr. Bennett and Governor Daniels? Post your insight under comments.  You must hit preview to post. 
Text from Indiana's 2011 Legislative Agenda: Putting Students First.

"Identify and Reward Great Teachers and Principals: Give Local Leaders Flexibility to Promote Excellence.... Promote excellence by identifying and rewarding great teachers and school principals based on their performance rather than seniority or degrees held...

Reliable, fair, accurate evaluations, which are informed by student achievement or growth data, should be used each year to assess teachers and administrators, recognize our best educators and identify those who need support for improvement. Administrators must use these evaluations to inform decisions about hiring, firing, professional development, compensation, placement, transfers and reductions in force.

Collective bargaining agreements between school corporations and teachers’ unions should focus on salary and wage-related benefits and should be innovative in recognizing performance through compensation.

Tenure should be awarded to teachers based on performance instead of seniority.

Real Accountability and Flexibility: Empower School Leaders. Bring Success to Failing Schools.
Hold all schools accountable for achieving results for students. We must demand swift and dramatic improvement from all chronically failing schools and provide the state all the necessary tools to intervene when local leadership has failed to offer a quality education to children. ..... We must free school leaders in our lowest-performing schools from restrictive collective bargaining agreements between school corporations and teachers’ unions that prevent schools from making staffing decisions in the best interest of students.

We must give all turnaround managers adequate time to demonstrate improvement, but we must also set rigorous annual performance goals and replace ineffective managers as quickly as possible. Once schools successfully improve student performance, we must act with care to be sure the school community has the autonomy and freedom to maintain success. The State Board of Education will appoint the first school board to successful turnaround schools and allow the community to decide how best to operate the school once state control is relinquished. Create a ―Parent Trigger‖ – if 51 percent of parents in a school sign a petition, the state can step in early to turn around a failing school.

High Quality Options for Families: Offer Equal Educational Opportunities to All Children. Give Parents a Voice. ....Allow students to graduate early and offer them a college scholarship equal to the amount the state would have spent on the last year of high school. Ensure state education dollars follow the needs of students so parents can select the best possible educational options for their children.

Create an Indiana Charter School Board to authorize new charters across the state. Allow private higher education institutions to apply to the State Board of Education to authorize new charters. Increase accountability for all charter authorizers. Only let the best open, and close poor performing charters. Expand virtual charter schools to reach underserved students and to fill gaps in the traditional system. Eliminate caps on charters and help them access safe and appropriate public facilities. Grant schools and communities more authority to convert failing schools to charters."

Link to the Roundtable Discussion at CELL 12/8

I have been looking around for specifics on Governor Daniel's reform legislative agenda.  These are the best links I have found so far.  


http://www.youtube.com/watch?v=EnzTtYISNzo&feature=related

http://www.doe.in.gov/puttingstudentsfirst 

http://www.in.gov/edroundtable/2332.htm

Indiana's Assessment Problems Leads to School Funding Issues

I wanted to start this Blog with one concise point.  Indiana doesn't have a school funding issue without first having an assessment issue.  We have a tax policy issue created by a property assessment issue.  Starting on June 1, 2001 Indiana was forced to move to a true value property assessment system by the Indiana Supreme Court.  This system did away with the old system which controlled rate increases and allowed amortization of increased values due to the age of homes.   Under the new market value system people with older homes or say lake property, which were undervalued by the previous assessment system, saw increases in their property taxes due to huge gains in assessed value sheltered by the previous system of assessment.  Poor assessment methods by untrained personnel led to unpredictable property tax bills for the public from 2002-2004.  This led to a general tax payer revolt.  The politicians were unfairly held up as scapegoats by the taxpayers. The state level politicians held up the local entities as part of the problem and began to draft policies to control the ability of local lawmakers to raise property taxes, enter the property tax reform of 2008.   One of the changes provided in legislation took away local school boards' ability to support schools through the local tuition support levy. 

As you probably remember, the state raised the sales tax one percent to pay for this additional tuition support they were now responsible for providing.  When this occurred, numerous groups cautioned state leadership not to put school funding on methods which are so closely tied to market conditions as sales tax and income tax.  Schools had used the local property taxes as a stable and reliable funding mechanism to make it through lean times.  It is easy as Monday morning quarterback to point fingers at decision now, but there must have been other possible motivations to take away those specific local levies.
Some debated the Governor chose to take away local tuition support so he could evoke the Golden Rule, "He who has all the gold makes the rules.”  This full state support  may help motivate reforms coming down from the state.  Another outcome appears to be the hope it would spur competition between schools for the student ADM support.    

The rest is well documented history.  The state had huge short falls in tax receipts.  If the money isn't there you can't spend it.  Schools traditionally sheltered from such dramatic cuts by their local property tax support were forced to R.I.F. teachers, cut coaches, reduce administration, teaching assistants, custodial staff and glean every line item for budget cuts. 

What are the lessons learned from this?  Indiana has been a conservative state for a long time.  We were one of the last states to adopt common reforms such as day light savings time and a market value assessment system.  This prolonged delay in adopting an ad valorem assessment system led to large gains in assessed value in a short time period.  I know it will be hard for us, but we need to adopt common nationwide reforms sooner.    Dr. Bennett and Governor Daniels will surely not lot this happen under their watch and have been very progressive in searching for reforms.  Reforms are coming fast and furious.

We have to study the results of taxpayer supported referendums in other states.   Indiana’s current property tax and school funding policies are leading us towards two types of schools in Indiana: those who have communities which support education and those who have communities which do not.   Democracy is a wonderful thing.  Current laws and policies give taxpayers full control in deciding whether their local property taxes go up.  This is as it should be.  It is a natural response to the assessment issue where taxpayers tried to hold state level politicians accountable for their local property taxes.  However, we have to be cognizant of the fact we will have schools which will be better funded due to the demographics of their taxpayer base.  The differences between districts will increase over time until parents will vote with their feet towards education friendly districts.  The state wants schools to compete, but student ADM  in other states has shown not to be enough to make up for additional local support for tuition, capital projects, and technology expenditures.   I could be wrong, but since other states have dealt with such assessment and tax issues before Indiana, we have the luxury of watching what happened in states such as Michigan and Illinois.  

Just remember when someone brings up issues with school funding tell them the real problem started with assessment.