Schools keep close watch as state considers tweak to state funding formula

Trena Sultzer has graduated kids from all walks — advanced students looking to finish high school early, kids with discipline issues who struggled in large-school settings, students working to help out their families and even kids with their own children to care for while earning their diplomas.

Whatever their individual needs, Sultzer and her tiny staff at Indianapolis Public Schools’ Graduation Academy work to meet them and, in many cases, graduate kids who probably would have struggled to do so otherwise. Many of the kids at Graduation Academy are there because they’re behind in credits, which puts them at greater risk of dropping out.

The program is working, Sultzer said, but the small class sizes, the extra support and intervention, the flexible scheduling and more all add up to a resource-intensive program that the district is afraid it won’t be able to keep funding if the state continues moving toward a flatter funding model.

Traditionally, districts serving higher-poverty populations have received higher state funding than their more affluent peers, but that balance has started to shift — because of legislative changes and an improving economy — toward more equal funding for all districts, regardless of need. 

“That is our choice,” said Weston Young, chief financial manager for IPS. “We're saying that there are kids (and) families that need that extra help. We could say, ‘You know what? Funding is getting tight…’”

If they cut those programs, though, it’s unclear what happens to the kids Sultzer is serving right now — the kids who can only come half-days because they have to work, who are trying to raise kids of their own or the kids who got behind and are trying to catch up, rather than dropping out.

Lawmakers to review school funding Tuesday

Lawmakers on Tuesday will be looking at the portion of the state’s school funding formula that helps programs like the Graduation Academy. The Indiana General Assembly’s interim study committee on tax and fiscal policy will be reviewing what is known as complexity funding.

Any of its recommendations are unlikely to be implemented for another two years but could have a big impact on schools. 

In the formula, there is foundation funding — a set dollar amount that public schools get for every student enrolled — and there is complexity funding — an additional dollar amount schools get for students who are considered “complex,” or who have greater educational needs. Generally considered a count of kids who are at-risk of falling behind or dropping out of school, states measure this in different ways for funding purposes.

Some use the number of students who qualify for free or reduced-price meals. Indiana has used that measure in the past but now counts the number of students who come from families qualifying for meal assistance or needy family services or are in the foster care system. Several other states, including South Carolina and Massachusetts, use a similar system.

Schools saw large funding drops

This standard came under scrutiny in Indiana earlier this year after new data showed large drops in the number of students qualifying as complex, meaning large drops in complexity funding for many school districts.

This was especially true in districts like IPS that serve large populations of at-risk kids. Under the current formula, IPS would have lost $36 dollars per child while more resource-rich suburban districts would have seen significant gains in per-student funding.

With educators ringing alarm bells, lawmakers put a provision in the budget that would limit the funding cuts a district could see from one year to the next, but less needy districts are still seeing their budgets grow at a faster rate than districts like IPS.

For example, several suburban districts in Hamilton and Boone counties, where fewer than 10% of kids qualify as “complex,” are projected to see their budgets grow this year and next by anywhere from 3% to 7% annually. IPS and some of the higher-need township school districts in Marion County, where poverty rates are two to four times higher will see budget increases of 1% to 3%.

“We have to have a mindset change that we, strategically as a state, believe that kids in poverty need more resources,” Young said.

As part of that budget compromise back in the spring, lawmakers promised to study the complexity issue.

They start that work Tuesday, considering if there is a better way to measure complexity, adequately fund the state’s public schools and meet the needs of its more than 1 million K-12 students.

How should state fund education? Debate ensues

There are some who think school funding should be distributed more equally, with all schools getting the same amount — or close to it — for each student they enroll. Plenty of others argue that the current formula doesn’t go far enough to fund schools equitably and the schools that are educating students with greater needs should be getting more money per child than those with less needy populations.

DeVetrica Quinn lands firmly in the latter camp. She’s seen the hard choices that urban schools have to make, like going without a media specialist to help kids check out books in the school library.

“I never knew it was even possible to have a school not have a library kids could get books from,” she said.

Two of Quinn’s three school-age children go to George Buck School 94, in the IPS district, where there is no media specialist. A district spokesperson said the school saw significant budget cuts this year because of a drop in enrollment and that meant tough staff decisions.

Quinn can’t help but wonder what kinds of resources her kids would have if they lived somewhere like Carmel.

“I’m pretty sure they have an operating library,” she said.

A quick scan at the websites for all of the elementary schools in the Carmel Clay district finds that they all do, in fact, have media specialists and operating libraries.

Carmel Clay Schools receives fewer state dollars per student than IPS, but it also has a much lower population of students growing up in poverty, so its schools don’t necessarily have to dedicate dollars to dealing with the same challenges that IPS schools do.

“It’s a fine line to be walked, to determine that mix,” said Denny Costerison, executive director of the Indiana Association of School Business Officials and an expert on Indiana school funding.

“The economy is good right now,” Costerison said. “There may be less people who are qualifying … but that doesn’t say that a child whose parent gets a job today but has been at risk before that, that tomorrow they’re going to be out of ‘at risk.’”

Kids growing up in poverty — what the complexity index generally tries to measure — often enter school behind their more affluent peers. They tend to end up in under-resourced schools and are at risk of continuing to fall further behind without the appropriate interventions and support to catch them up and keep the on track.

Angela Denman sees this every single day at the Step Ahead Academy. The middle school-age kids in this IPS alternative education program are at least a grade level behind where they should be for their age group. Some of them have been held back for multiple years, making them increasingly likely to drop out.

Step Ahead works to reach those kids and catch them up before they reach high school. That’s the age that most kids start to drop out and when being a grade or two behind your peers becomes harder for kids to swallow.

“Our goal is to make sure that student doesn't feel so far behind skill-wise and social-wise that they want to drop out of school,” Denman said.

Alternative education programs can be costly

These kinds of alternative education programs are often expensive, though. They have smaller class sizes, and the programs often hire additional counselors, social workers or academic interventionists to meet the more intense needs of their students.

If the state continues to shift money away from poor, urban districts and toward a funding model where schools across the state are funding equally — regardless of need — then, like the students they’re designed to serve, these programs themselves could be at-risk.

“We get a really small alternative education grant from the state,” said Brent Freeman, unified student supports officer at IPS, “but that's somewhere like 10 or 15% of the cost spent on alternative education.

“So the rest of that comes out of complexity funding.”

IPS received roughly $50 million dollars in complexity funding last year. Schools don’t differentiate between foundation and complexity dollars when they receive their funding from the state, but Young said it’s easy to start identifying the services that IPS provides to help at-risk kids and start putting dollar amounts on them.

They include:

• $7.6 million on contracts for social and emotional health support workers.
• $6.5 million on English as a Second Language teachers.
• $1.8 million for the Newcomer School, which serves immigrant students.

It’s also easy to draw a line between complexity funding and special education services, another resource-intensive endeavor that is never fully funded. Freeman said that 30% to 40% of special education spending in the district isn’t covered by special education revenue, so the rest comes from foundation or complexity dollars.

Conversations like that — about what happens to programs funded by complexity dollars if those dollars start to go away — are what make parents like Shawanda Tyson nervous. A mom of two young children, Tyson’s oldest child is in the fifth-grade at Ignite Achievement Academy. Merrell is on the autism spectrum and developmentally delayed.

School has been a continual challenge for Merrell, but Tyson said she’s seen her son make significant progress. Last year, he was in a self-contained classroom serving only special needs students. This year, he’s back in a regular classroom setting but gets help from the special education team, including regular one-on-one instruction.

“If they take this funding away,” Tyson said, “what will happen to my son?”

Call IndyStar education reporter Arika Herron at 317-201-5620 or email her at Arika.Herron@indystar.com. Follow her on Twitter: @ArikaHerron.