News From Terre Haute, Indiana

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May 19, 2013

Vigo schools prepare to tighten belts

Funding estimates show a zero percent increase for first year of state budget

TERRE HAUTE — State funding for the Vigo County School Corp. will remain “pretty flat” for the next two years, said Donna Wilson, chief financial officer.

And the district already is preparing to tighten its belt, once again.

The Legislature approved a state budget that provides a 2 percent increase in total funding for schools the first year and a 1 percent increase the second year.

But not every district will see increases.

According to Terry Spradlin, of the Center for Evaluation and Education Policy at Indiana University, 121 of Indiana school districts — or 42 percent — will see no increase or they’ll have a decrease in funding.

Under funding estimates posted on the Senate Republican website, Vigo County’s funding would increase just $18,000 the first year, from $99,900,499 this year to $99,918,474 next year, a zero percent increase.

The following year it is projected to decrease 0.4 percent, to $99,490,898.

The funding formula projects a 2.8 percent decline in enrollment the first year, or 425 in average daily membership (ADM). The second year, it projects another enrollment decline of 1.6 percent, to 14,284 ADM. Kindergarten students count as one-half student for ADM purposes.

“I don’t anticipate that big of a drop,” Wilson said, so hopefully, funding will be somewhat better than projected.

The total per student funding actually increases each year, from the current $6,685 to $6,882 in 2014 and $6,965 in 2015.

Vigo County receives more dollars per student, but as enrollment goes down, funding flattens out, she said.

The estimate is based on forecasted enrollment, which could change when the actual enrollment is counted. “Our funding doesn't move much based on estimated enrollment data,” Wilson said.

VCSC does get extra funding for such areas as career and technical education and in something called a complexity index, which takes into account the district’s high free/reduced lunch (poverty) rate.

The district will receive added funding for full-day kindergarten both years, up 5 percent to $3.3 million in 2014 and up 3.9 percent to $3.4 million in 2015.

The expansion of the private-school voucher program also could adversely impact revenues for the school district, she said. As more state dollars go to vouchers, “There is less money on the table for public schools,” Wilson said.

“We’ll deal with the hand we’re dealt. We’re fortunate because we have been very responsible and have maintained a cash balance, although it’s not as healthy as it once was,” she said. “We have gone through several years of rough waters, and overall we’ve fared pretty well.”

At its peak, the district’s cash balance was about $21 million a few years ago. The district started this year with a cash balance of $16.2 million, which is about 15.2 percent of the general fund budget.

While the Legislature has provided additional funding for schools, it still doesn’t make up for significant cuts implemented under the Mitch Daniels administration, said Superintendent Dan Tanoos.

“It’s still very challenging to keep up with our ever-increasing costs,” he said. The district hasn’t been able to give employees a raise on the salary schedule for two years, he said.

The district is looking at ways to cut costs without laying off personnel or cutting academic programs, he said. The board also wants to maintain a healthy cash balance, which has been eroding over time.

 He anticipates the district will have fewer employees next year, but through attrition.

The Affordable Care Act, also known as Obamacare, will have an impact on the budget and negotiations, he said.

One area that will be affected is transportation, he said. “That fund is underwater, basically,” he said. Travel for athletic programs, particularly at the middle school level, as well as field trips, are being closely scrutinized.

Vic Smith, of the Indiana Coalition for Public Education, who closely follows the Legislature, writes that “the budget increases for tuition support, when viewed in the context of the past eight budgets, were truly anemic.

“This is the first time in the eight budgets (16 years) when funding increases did not exceed 2 percent, except for the budgets of 2009 and 2011 when the Great Recession controlled the agenda. The strong push to expand vouchers appears to have been accompanied by a lower priority and diminished interest in funding public schools.”

 Considering that revenue forecasts in the 2013 session were all positive and the legislature found $500 million for tax cuts,  “The conclusion seems obvious that limiting the school formula increase to 2 percent and 1 percent reflected a low priority for funding public education,” Smith wrote in his Vic’s Statehouse Notes.

Spradlin said the funding formula is becoming more equitable for school districts, which he views as a positive thing.

But the challenge now is whether the Legislature is providing enough funding “to achieve the outcomes and objectives we expect of public education,” Spradlin said.

In the second year of the budget, the new funding will be below inflation. Districts “will have a hard time continuing what they are doing without having to make cuts,” he said.

Spradlin said he’s a champion of public education, and he’d like to see it funded at an adequate level “that gives students every opportunity to learn and succeed.”

The Legislature and governor wanted a reduction in state income taxes, and hopefully that will generate economic growth in the state, he said.

Perhaps in two years, that will translate into more jobs and more revenue for the state, and the Legislature will be in a better position to increase funding for public education to “truly sufficient levels,” Spradlin said.

Sue Loughlin can be reached at (812) 231-4235 or sue.loughlin@tribstar.com.

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