Vic’s Statehouse Notes #191 – January 13, 2015

Dear Friends,

As Governor Pence prepares for his State of the State address this evening, he no doubt will again call this the education session. His budget unveiled last Thursday (Jan. 8th), however, was stingy on education funding.

His budget continued his policies of favoring private schools over public schools and offered no relief to public schools from the paltry funding of the past two year biennium.

He recommended a 2% increase in the first year followed by a 1% increase in the second year of the biennium. That is exactly the pattern of the 2013 budget that has left many public school districts in financial distress when funding didn’t even cover the cost of living, which economists told the legislators was 1.6% per year. The “2%/1%” pattern is the lowest budget for tuition support since the public school accountability law was passed in 1999, except for the two budgets during the Great Recession.

Now that the Great Recession is behind us, you would think we would restore public education to a high priority, but the Governor says no.

The Governor’s budgetary bad news then gets worse. He says he will give $41 million of the “2%/1%” plan to charter schools to make up for the lack of property tax support under the charter school law. Then he says he will give $4 million of the same fund to private schools to remove the cap on vouchers to pay the private school the full amount that they charge.

When all this is sorted out, community public schools will get far less than 2% and 1% in the next two year. Thank goodness the Governor’s budget is just the first bid. The House and Senate budgets need to be more positive for public schools. Your legislators need to hear from you about the need for public school funding.

Tuition Support Funding

Governor Pence has asked for $134 million more for tuition support in the first year. That is a 2% increase over the last budget, which was $6.692 billion.

The Governor recommended another 1% in the second year of the biennium, which is well below the cost of living pegged by the federal government this year at 1.7%. A 1% increase in the second year would require $68 million more in the tuition support fund.

Here’s where the math gets a bit complex. The first year’s increase of $134 million has to be repeated in the second year to form the new base for adding the 1%. This means the new money required in the second year totals $134 million plus the $68 million, or a grand total in the second year of $202 million.

Thus, the new money asked for in the Governor’s budget is $134 million for the first year and $202 million for the second year. Adding the two years together results in a biennium total of $336 million.

Politicians like to add the two years together in this way and to publicize the total amount to make it sound like a huge amount, when in reality as you have seen, it doesn’t cover the cost of living.

If the Governor’s budget plan had stopped here, the verdict would be that it is a weak level of funding which mimics the record low funding in the 2013 budget, which was the lowest funding for non-recession years in recent memory. With a continuing surplus of $2 billion, you would think he would fund our schools in a better way.

Unfortunately, his budget plan didn’t stop here. It gets worse.

Diversions and Fuzzy Math

The Governor’s budget then proposes to give charter schools a new grant of $1500 per student since they do not get property tax money. The stated estimated cost of this was $41 million over two years.

Secondly, the Governor says he would use $4 million each year to remove the cap on voucher payments for private school tuition.

Both of these come out of the proposed 2% and 1% for tuition support.

Senator Tallian said the plan was full of “fuzzy math.” I agree.

Fuzzy #1: If $1500 is multiplied by charter school enrollment of 35,678 (2013-14), the total cost is $53.5 million each year, not $41 million over two years. The two year total is $107 million. Do the math.

Fuzzy #2: If removing the cap on 30,000 vouchers is going to cost taxpayers $4 million each year, that means that private school tuition is on average only $133 higher than the current cap of $4800. That seems highly unlikely and the $4 million seems to be a clear underestimation.

In 2013-14, the IDOE financial report on vouchers showed that the 2013 voucher expansion had changed the voucher program from a money saver for the state to a fiscal cost for the state of $16 million. If the 2014-15 voucher numbers rose by 50% from 20,000 to 30.000, it is a fair estimate that the costs to the state also rose by 50% from $16 million to $24 million. This $24 million also comes out the tuition support fund since there is no separate line item for voucher payments. Republican leaders have resisted calls to give the voucher program its own transparent line item.

What is Left for Community Public Schools?

These diversions leave public school districts in dire shape in the Governor’s budget.

Let’s start with the Governor’s first year plan of adding 2% or $134 million.

Now take out the $1500 grant to 35,678 charter school students totaling $53.5 million. That leaves $80.5 million.

Now take out the $4 million for removing the voucher caps, using the Governor’s own estimate. That leaves $76.5 million.

Now take out the estimated $24 million fiscal cost for the expanded voucher program paying for private school students who have always attended private schools which has to come out of the tuition support fund. That leaves $52.5 million.

Instead of 2%, the Governor is proposing 0.78% for public school districts, less than 1%.

In the second year of the biennium, his proposal to for an additional $68 million is completely eaten up by the $53.5 million for charter schools, $4 million for vouchers, and the $24 ongoing fiscal cost for voucher students who have always attended private schools. Funding for public school students would decrease.

The Governor’s efforts to degrade public education in favor of private schools must be turned around by the General Assembly.

Please talk to your legislators about giving the one million plus public school students better financial support in the new budget than what the Governor has in mind.

Thanks for attending to the math and for your efforts in support of public education!

Best wishes,

Vic Smith vic790@aol.com

“Vic’s Statehouse Notes” and ICPE received one of three Excellence in Media Awards presented by Delta Kappa Gamma Society International, an organization of over 85,000 women educators in seventeen countries. The award was presented on July 30, 2014 during the Delta Kappa Gamma International Convention held in Indianapolis. Thank you Delta Kappa Gamma!

ICPE has worked since 2011 to promote public education in the Statehouse and oppose the privatization of schools. We need your membership to help support the ICPE lobbying efforts. Joel Hand will again be our ICPE lobbyist in the Statehouse. Many have renewed their memberships already, and we thank you! If you have not done so since July 1, the start of our new membership year, we urge you to renew now.

We must raise additional funds for the 2015 session, which begins on January 6th. We need additional members and additional donations. We need your help and the help of your colleagues who support public education! Please pass the word!

Go to www.icpe2011.com for membership and renewal information and for full information on ICPE efforts on behalf of public education. Thanks!


Some readers have asked about my background in Indiana public schools. Thanks for asking! Here is a brief bio:

I am a lifelong Hoosier and began teaching in 1969. I served as a social studies teacher, curriculum developer, state research and evaluation consultant, state social studies consultant, district social studies supervisor, assistant principal, principal, educational association staff member, and adjunct university professor. I worked for Garrett-Keyser-Butler Schools, the Indiana University Social Studies Development Center, the Indiana Department of Education, the Indianapolis Public Schools, IUPUI, and the Indiana Urban Schools Association, from which I retired as Associate Director in 2009. I hold three degrees: B.A. in Ed., Ball State University, 1969; M.S. in Ed., Indiana University, 1972; and Ed.D., Indiana University, 1977, along with a Teacher’s Life License and a Superintendent’s License, 1998. In 2013 I was honored to receive a Distinguished Alumni Award from the IU School of Education, and in 2014 I was honored to be named to the Teacher Education Hall of Fame by the Association for Teacher Education – Indiana.

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Vic’s Statehouse Notes #174 – February 26, 2014

Dear Friends,

Let’s view the controversy over cutting the business property tax through the lens of the K-12 school voucher/school choice controversy:

Governor Pence has clearly favored private schools over public schools in the competitive marketplace of schools which we now have in Indiana. When public schools are kept in a perpetual state of financial uncertainty and budget cutting, they have a hard time competing with private schools for parent selections, especially when parents are often looking for small class sizes when they choose a school. Low school funding increases in the 2013 state budget – only 2% this year and 1% next year - have led many public schools to raise class size.

The Governor’s plan to eliminate $1 billion in business property taxes to help businesses has threatened schools, cities, towns, libraries and county governments with the latest self-inflicted crisis of financial instability. For public schools, that translates into more difficulty in competing in the school choice marketplace. Parents may not choose schools with well-known financial problems that are cutting services and even having trouble funding school buses. This is no time to give public schools another financial headache through a new round of funding cuts resulting from changes in the business property tax.

Twenty-two statewide associations representing local governments, schools and libraries have joined the “Replace Don’t Erase” Coalition. The Indiana Coalition for Public Education is one of the members. ICPE lobbyist Joel Hand has been attending weekly meetings of the “RDE” coalition, which is simply asking that the two bills that would cut business property tax, House Bill 1001 and Senate Bill 1, include dollar for dollar replacement money for any cuts enacted in business property tax to guarantee public schools and local government budgets are not harmed by the effort to attract more businesses to Indiana.

Stable funding for public schools is vital for the sake of over one million public school students in Indiana.

House Bill 1001

The House response to the Governor’s call to eliminate the entire business property tax was a locally based response. HB 1001 started out allowing each county to decide whether to zero out property tax on new business equipment. That move would guarantee that counties would not lose tax money currently coming in, but instead would stop the growth in new property taxes. Opponents say it would introduce a new era of cut-throat competition among counties, pressuring some counties to cut the tax when they really need the revenue growth.

After changes in the Senate, the latest streamlined version passed yesterday (Feb. 25th) by the Senate Tax and Fiscal Policy Committee would still cut a projected $2.0 million from public school revenue with no provision for replacement dollars.

Senate Bill 1

The Senate response to the Governor’s call was quite different. Senators introduced a bill to eliminate all business property tax for all small businesses, those with up to $25,000 in assessed value. This had a much smaller price tag than the Governor’s original plan costing $1 billion. It also cut red tape for small businesses. The Governor has said that he would support replacing the local dollars lost with state tax dollars, although Senators have not sounded like they want to back up his idea with state dollars in a non-budgetary year.

It’s All About Competition

Once again, public schools stand to lose big if the equipment property tax is dropped. Kathy Friend, Chief Financial Officer for the Fort Wayne Community Schools, has said that under the Governor’s original plan the Fort Wayne schools would take a bigger financial hit from losing this property tax money than they did when property tax caps were put into place four years ago.

If Governor Pence can keep public schools weak and reeling financially, the private and parochial schools can gain the upper hand in the live or die competition that is now a constant for schools. Public schools must have the financial support they need to remain the stable community force that they have been for decades.

This issue is active in both the House and the Senate. Let all of your legislators know that schools and local governments don’t need a financial crisis over the business property tax. Too many school districts, such as Decatur Township and Muncie, are already facing huge problems in funding school bus transportation. Any change in the equipment tax should be accompanied by a direct replacement of the lost local property tax dollars by state dollars.

The unrelenting erosion of financial stability in Indiana’s public schools must end. “Replace Don’t Erase!”

Thanks for contacting your legislators and for your active support of public education!

Best wishes,

Vic Smith

ICPE has worked since 2011 to promote public education in the Statehouse and oppose the privatization of schools. The 2014 session of the General Assembly is now past the half way mark in its deliberations. We need your membership to help support our hard working lobbyist Joel Hand. Many have renewed their memberships already, and we thank you! If you have not done so since July 1, the start of our new membership year, we urge you to renew by going to our website.

Although ICPE entered this session of the General Assembly in better financial shape than in any previous session, we still need additional support to fund the commitments our board has made for our lobbying efforts. We are counting on your financial help during the session.

We have raised the needed money in past sessions, and we must do so again. We need additional members and additional donations. We need your help and the help of your colleagues who support public education! Please pass the word!

Go to www.icpe2011.com for membership and renewal information and for full information on ICPE efforts on behalf of public education. Thanks!


Some readers have asked about my background in Indiana public schools. Thanks for asking! Here is a brief bio:

I am a lifelong Hoosier and began teaching in 1969. I served as a social studies teacher, curriculum developer, state research and evaluation consultant, state social studies consultant, district social studies supervisor, assistant principal, principal, educational association staff member, and adjunct university professor. I worked for Garrett-Keyser-Butler Schools, the Indiana University Social Studies Development Center, the Indiana Department of Education, the Indianapolis Public Schools, IUPUI, and the Indiana Urban Schools Association, from which I retired as Associate Director in 2009. I hold three degrees: B.A. in Ed., Ball State University, 1969; M.S. in Ed., Indiana University, 1972; and Ed.D., Indiana University, 1977, along with a Teacher’s Life License and a Superintendent’s License, 1998.

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