INDIANAPOLIS | Munster schools and similarly situated Northwest Indiana districts coping with revenue shortfalls are unlikely to turn their finances around under Gov. Mike Pence's proposed state spending plan.
On Jan. 8, the Republican submitted to the General Assembly a two-year budget that hikes state spending for K-12 classroom instruction by $134 million (2 percent) for the 2016 budget year that starts July 1, 2015 and an additional $67 million (1 percent) in 2017 -- a total boost of $201 million.
However, the increases in both years are less than the 2.06 percent average inflation rate over the past 10 years. Which means Pence is, in effect, actually reducing school funding by failing to keep up with the rising costs of everything schools must buy.
At the same time, Pence wants nearly $50 million of the $201 million increase directed specifically at charter schools and the state's private school voucher program, leaving even less money for public school corporations.
His budget proposes changing the school funding formula to provide charter schools a grant of $1,500 per student above what a public school in the same community is receiving for each student. It also removes a longstanding cap on the value of elementary school vouchers.
Chris Atkins, director of Pence's Indiana Office of Management and Budget, said the increases are necessary to attract additional charter school companies to Indiana.
"We're concerned that some higher-quality charter operators are not willing to look at locating here or investing here because of our charter financing system," Atkins said.
The governor did not recommend altering school funding in a way that would ensure school corporations with few low income students, like Munster, no longer receive less revenue per student than the state average of approximately $6,600.
His plan also includes nothing on improving property tax collection rates. The School Town of Munster board last week announced it will lay off 50 staffers, most of them on Jan. 30, due to a $2.22 million shortfall in local property tax receipts.
What Pence's budget does have is a lot of unspent cash: $648.5 million over the two-year period. He also is proposing to pay some $700 million cash for state construction projects that instead could be bonded at low interest rates, freeing those funds for other immediate uses.
In addition, Indiana boasts a $2 billion budget reserve that Pence said he is committed to not spending except in a dire emergency.
The Republican-controlled General Assembly, on the other hand, is likely to tap at least some of the unspent money from Pence's budget in crafting its own school funding plan, though it's too early to know how region schools might fare.
State Rep. Hal Slager, R-Schererville, a member of the budget-writing House Ways and Means Committee, said he expects to help devise a school funding formula that's more generous than the governor's, but he said figuring out how the funds are distributed will be tricky.
"The idea is to try to get money for the benefit of all students, but that's not to say that we want it to be at the expense of any particular group," Slager said.
State Rep. Bill Fine, R-Munster agreed.
"I don't think anybody feels comfortable taking money away from one student to give it to another," Fine said.
That likely will doom Pence's plan for extra charter school funding, which already raised the eyebrows of state Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, when Atkins said even charter schools rated D or F would be paid a premium above traditional public schools.
State Sen. Ed Charbonneau, R-Valparaiso, a member of the Senate Appropriations school funding subcommittee, said everyone in the Legislature agrees something should be done to improve school funding, and more money definitely is needed.
"Short of that we're doing nothing but moving money from one area to solve a problem and creating a problem where we just took the money from," Charbonneau said.
The House is expected to finalize its school funding proposal in late February. It then will go to the Senate for review and changes.
The final state spending plan will be hammered out in April by a House-Senate conference committee, subject to approval by both chambers and the governor.