Larry DeBoer: Crunching Indiana's school funding formula
Thursday, March 12, 2015 11:12 AM
WEST LAFAYETTE – The good folks at the Indiana Department of Education sent me some school finance numbers to play with. School finance is a big topic in the Indiana General Assembly this year, so this is a good time to do some number crunching.
Here’s number crunch one. In fiscal year 2015 – that’s July 2014-June 2015 – the state will distribute almost $6.6 billion to public school corporations and charter schools. State aid was $6.2 billion in calendar year 2012 (it was switched to fiscal years in 2013), so that’s an increase of 5.1 percent in two and a half years.
Consumer price index inflation was about 3.4 percent during that period, so there’s been a small increase in what state aid can buy. Inflation is expected to be about 2 percent per year during the next biennium. Will aid increase enough to match? The increase in state aid will be one of the most closely watched numbers in the debate over the next budget.
Now for number crunch two. There’s quite a range in per pupil aid among the school districts. The 10 highest districts average $7,940 per pupil; the 10 lowest districts average $5,667. That’s a difference of $2,272. The range has narrowed though. Two and a half years ago the difference between the 10 highest and 10 lowest was $2,494.
Of the $6.6 billion total in 2015, $4.6 billion is basic tuition support, $1.2 billion is a complexity grant and the remaining $830 million is distributed for honors, special education, vocational and full-day kindergarten grants. The school funding formula passed by the legislature in 2013 put basic tuition support for fiscal 2015 at $4,587 per pupil. More than half of all districts get exactly that in basic aid.
The variations among districts are due mostly to the complexity grant. This formula tries to take account of the extra cost of educating children from less-advantaged families. Aid per pupil is scaled upward based on the number of kids whose families qualify for free textbooks.
That’s the main reason why, for example, the Indianapolis, Cannelton and East Chicago school districts receive more state money per pupil, and the Carmel-Clay, Sunman-Dearborn and Lake Central districts receive less.
How much more will districts with many lower-income families receive per pupil? The answer is in the details of the formula. Increase the complexity grant relative to basic tuition support and the formula will tilt more toward lower-income districts. Increase tuition support and the formula will tilt less. Lately it’s been tilting less, and the latest school formula proposal this year continues in that direction. The range in state aid from top to bottom is smaller than it was. This is a tough issue for legislators. Once total aid is established, adding aid to one school district means subtracting aid from another. That can make for sharp debate.
And number crunch three. There are 289 public school districts and 76 charter schools on the Department of Education’s list in 2015. The number of public school districts has decreased by two since 2012. Rockville and Turkey Run consolidated their finances into North Central Parke, and North Posey absorbed the New Harmony district. The number of charter schools has increased by 10 since 2012. Charter enrollment grew from 28,000 to 34,000. That’s 3.5 percent of total enrollment of 988,000. Public school enrollment has fallen by about 10,000.
Charters also receive 3.5 percent of total state aid, and that amount is up from 3 percent in 2012, mostly because of the increase in charter enrollment. Measured this way, it appears that the share of charters in total state aid is growing slowly. Measured another way, the increase is more significant. Between 2012-2015, state aid increased by $319 million. Of that amount, charters received $47 million, which is 15 percent of the total increase. The allocation of funds among public and charter schools will be another contentious issue.
How much more money will the budget deliver to K-12 education?
How will it be distributed among rich and poor districts, growing and declining districts, and rural, suburban, and urban districts? How much of the state aid total will charter schools receive? By the end of April we’ll have the answer, and more numbers to crunch!
DeBoer is professor of agricultural economics at Purdue University.