Writer / Dr. Rich Arkanoff, Superintendent
As parents and educators, we work with children to instill the concept of equality. We tell them that equality is how we treat each other fairly. We teach them that if you treat others equally, you will be treated fairly. Unfortunately, another learned lesson is that life is not fair.
An essential role in government is to provide an equal starting point. In other words, to “level the playing field” so that all have equal opportunity, but sometimes governments aren’t fair either. With regard to funding per student and in comparison to the state average, the state of Indiana is not distributing tax dollars fairly to the Center Grove Community School Corporation and several other districts across the state.
The 2015 state average funding per pupil is just over $5,700. Center Grove receives approximately $5,000 per pupil, while other districts receive more than $7,000. Center Grove’s funding is nearly $800 below the state average. This funding deficit is hitting many districts across the state, including Munster, Southwest Allen, Southern Hancock, Hamilton Southeastern, Zionsville, Carmel and West Lafayette. “Students in some of the highest performing Indiana school districts are missing out on programs that are staples in most Indiana schools,” said Scott Robison, superintendent at Zionsville Community Schools. “We have no elementary physical education teachers, we had to drop our International Baccalaureate program and we even had to close our high school science labs to experiments due to safety issues during high class sizes.” To help avoid this same situation from occurring in our district, Center Grove has joined Dr. Robinson in the formation of a group of school districts called the “Fix-It Coalition” which is urging lawmakers to fix the school funding formula. “The skew seen in the current school funding scheme is absurd and broken, and it must be fixed,” said Dr. Robinson.
Fixing the Formula
The Center Grove administration agrees with the Fix-It Coalition’s belief that the dollars should follow the student, and per pupil funding should be equitable no matter where in Indiana the student attends school. Unfortunately, that is not the case with the current funding system for public schools. To understand this issue, you first need to understand the way Indiana’s school funding works.
Public schools operate five major funds to fund the educational system in our community:
1. General Fund — Funded by State Sales Tax
2. The Capital Projects Fund — Funded by Local Property Tax
3. Transportation — Funded by Local Property Tax
4. Bus Replacement — Funded by Local Property Tax
5. Debt Service — Funded by Local Property Tax
The funding issue impacts only schools’ General Funds, which are the primary funds used to pay teachers, classroom assistants and administrators. Other funds support other financial obligations. For example, local property tax supports the Capital Projects fund, which supports the upkeep of school buildings and to build future schools within the community.
With all that stated, let’s focus on the General Fund.
State income tax and sales tax are the primary sources of state revenue for school funding. In 2008, the Indiana General Assembly changed the Indiana public school funding formula to rely much more on sales tax, thus reducing the reliance on local property tax as a central revenue source for school corporations’ General Funds. They removed property tax revenue completely from General Funds in 2009. Legislators increased the state sales tax from 6 percent to 7 percent, so the State could supposedly support 100 percent of school districts’ General Fund revenues. Many school administrators, business officials and representatives from professional school associations condemned this idea because the generation of revenue was moving away from a stable revenue source, local property taxes, to an unstable revenue source, sales tax.
Impact on Center Grove
Let’s calculate the impact to Center Grove. In September 2014, the school district’s official student enrollment was nearly 7,800 students. At approximately $5,000 per student, the total revenue from the state was roughly $39 million. However, if you apply the state average per student funding of $5,793, the district would have received over $45 million. This is an estimated shortfall of over $6 million to Center Grove, while other school districts will receive the state average or even higher. Do I have your attention? I hope so.
“As you can see, Center Grove is not receiving its fair share of state funding,” said Dr. Paul Gabriel, Center Grove Chief Financial Officer. “We continue to innovate, prioritize and make difficult choices to optimize every dollar of funding and yet there still remains an impending budget deficit.”
The current state funding system uses a number of variables that state legislators can manipulate to adjust funding for schools. One main variable is the “Complexity Index.” The Complexity Index was created to provide additional funds to school corporations with a greater number of traditionally disadvantaged students. The intent of these revenues is to help school corporations close the student achievement gaps that persist in classrooms throughout the state including Center Grove. This corresponds to the theory that one can redistribute tax revenues to provide a fair and equitable system of school funding across all 296 school districts in the state.
Under the current system, Center Grove will continue to be funded unfairly and eventually face more significant issues such as increased class sizes, program reductions and, finally, staff cuts. The only option for school districts like Center Grove to replace the lost funding from the state is to seek a General Fund Referendum, which will increase taxes. This process is risky and an unfair “Double Taxation” on the residences and businesses of White River Township.
How You Can Help
What can you do to help? Encourage your state legislators to support a recalibration of the state’s school funding formula to serve Center Grove students on par with other Indiana school children without the necessity of a “pay-twice or perish” system that forces a choice between increasing class sizes and losing programs or double taxation through operating referenda. The current school funding formula is not fair to many schools like Center Grove, it’s bad for business and it’s bad for our children.
Learn more at indianaschoolfunding.org or email INFixItCoalition@gmail.com.
