For anyone who wants a glimpse of how money — and the lack of it — will shape the conversation on education reform in Indiana, look no further than the “de-ghoster.”
At a legislative committee hearing in October, state lawmakers discovered they spent nearly $94 million in taxpayer dollars on thousands of “ghost” students last year.
The money went to public schools where the students once attended, but have since left. That means that in 2009, Indiana public schools were paid for the cost of educating 16,315 students no longer enrolled in their districts. The payment, known as the de-ghoster, has been part of the state’s education funding formula for more than a quarter-century.
For years, it’s been defended by recipient schools that say their expenses continue even when enrollment drops. With the de-ghoster, they collect money at a decreasing rate over three years to pay for those expenses.
But just because the de-ghoster is a time-honored practice doesn’t mean it’s set in stone.
Three Indiana school districts have taken the state to court over the issue, but lawmakers may cut short the legal fight. Faced with a $1 billion revenue shortfall as it enters the next biennial budget session, the Indiana General Assembly may feel compelled to eliminate the de-ghoster to shift the money elsewhere.
That’s what Gov. Mitch Daniels wants lawmakers to do. For months, he and Public School Superintendent Tony Bennett have been pushing the idea that education reform means reforming education spending.
Bennett sums it up this way: “I don’t think the job of the state should be to continue to pour money into the way we’ve always done things.”
Not messing around
Indiana spent $8.5 billion on elementary and secondary education last year. That’s more than half the state’s annual budget.
Daniels and Bennett don’t think students and parents got enough for their money. At a recent speech in front of the Indiana Fiscal Policy Institute, Bennett put up a PowerPoint presentation with a slide headlined: “Indiana’s Education Mess.”
The “mess,” as detailed on the slide, was a litany of failures. Among
them: 23,000 third-graders who can’t read at grade level; 25,000 dropouts every year; and half the state’s schools that failed to meet federal improvement standards in English or math.
Also on his “mess” list was the de-ghoster, along with a system that bases teacher pay and tenure on seniority rather than performance.
To clean up the “mess” — which he compared to the BP oil spill in the Gulf of Mexico — there needs to be, he said, “a structural change in the way we fund education.”
“We do not need any more money in this system. We need courage to change it,” Bennett said. “Money is cheap. Courage is scarce.”
A fight for control
It’s that kind of language that infuriates Nate Schnellenberger, the president of the Indiana State Teachers Association.
“It’s the demonization of public school teachers and public education,” Schnellenberger said. “That’s what some politicians do when they want to come up with easy answers for how to fix public education.”
Schnellenberger is convinced Bennett and Daniels will exploit the looming budget battle to get more control over how education dollars are spent in Indiana. Schnellenberger and others say that means removing more decision-making from local school boards.
Driving that fear, in part, is how education funding has changed. In 2008, as part of the tax reforms that capped property taxes, the state took over the bulk of K-12 education funding. Local property tax revenues — over which school boards had some control — were eliminated from education funding and replaced with revenue from the state’s sales tax.
That switch, in essence, put education funding in the hands of the state.
“They’re going to argue that these are state dollars now, so the state should have more control over how they’re spent,” Schnellenberger said.
“My answer would be: These are tax dollars that came from people all over Indiana. Just because they changed the way they collect money for our schools doesn’t mean they should change the way schools are governed.”
State Sen. Tim Skinner, a Democrat and school teacher who sits on the Senate Education Committee, agrees.
“This is all an attempt for them to control the entire education system,” Skinner said. “There’s a massive amount of change ahead.”
From the ground up
What are those changes?
Both Daniels and Bennett talk about “structural” changes they believe are essential to education reform. Those changes revolve around three themes — accountability, competition and freedom.
• In the accountability category, Daniels wants teacher pay and job security to hinge on how effective educators are in the classroom.
That’s a tough task, but better, he argues, than a system that bases pay on seniority.
But to get that, the state Legislature would have to roll back the state’s collective bargaining law for teachers. In doing so, they would undo the current contracts that local teachers’ unions have negotiated with local school boards. ISTA strongly opposes this.
• Accountability for Daniels also means more dollars directly to the classroom. A State Budget Agency report, released this summer, concluded Indiana schools spend on average 58 cents of every dollar they receive on classroom instruction. Daniels wants that number up to 65 cents. To get there, though, school districts would have to cut back on other expenses, from athletics to transportation.
• Daniels wants dollars to follow the student. Last year, state lawmakers started down this path when they passed a law that allowed students unhappy with their schools to transfer into a neighboring district without having to pay tuition. Now, Daniels and Bennett want lawmakers to provide state-funded grants to students who are attending schools deemed to be failing, for use at the school of their choice, including private and parochial schools. As Bennett describes it: “For years, we’ve been funding school corporations. Now, it’s time to fund the education of students.”
• Competition also means taking the lid off charter schools:
expanding their numbers, accelerating their timeline for state funding, and giving them more access to empty school buildings currently in the hands of local school districts.
• In addition to giving students more freedom about where they could attend school, he also wants legislation that would entice students to get through quicker. Students who could get through high school in three years rather than four could take money that would have been sent to their school districts — about $8,000 to $10,000 a year per pupil — and use it for college costs, instead. That could translate into fewer dollars for local school districts.
Linking funding to reform
Critics of the proposed reforms already have lined up. In the weeks before the Nov. 2 election, when state legislators were on the ballot, the Democratic leadership accused Daniels of abandoning the state’s constitutional obligation to provide funding for public education.
“They’re trying to privatize education,” said then-Democrat House Majority Leader Pat Bauer.
How the proposed reforms play out in the next legislative session, which begins in January, remains to be seen. Even with the Legislature controlled by Republicans, it doesn’t mean Daniels will get his way.
“Republicans aren’t in lockstep with the governor,” said political analyst Ed Feigenbaum, editor of Indiana Legislative Insight. Education reform on the state level also might depend on what happens at the federal level.
As the Republican Daniels often notes, it’s the Democratic president, Barack Obama, who ignited the debate over education reform with his proposals to expand charter schools and to link teacher pay to student achievement.
And it’s Obama’s Secretary of Education, Arne Duncan, who has tied federal education dollars to major reform, including the way teachers are hired and evaluated.
One thing is certain: In Indiana, lawmakers will start out the year planning for a budget that’s already in the red. It will be up to them whether they’ll link education funding to education reform.
Daniels and Bennett don’t see how legislators can’t. “A lot of what the changes will look like will depend on what happens in the Legislature,’’ Bennett recently told a group of teachers. “But make no mistake: The changes are coming.”