With the Christmas holiday fast approaching, millions of people have in mind certain gifts they hope to receive. Indianapolis Public Schools (IPS), the state’s largest school district, could be asking local taxpayers for a gift worth millions of dollars.
This month, district officials will be asking the IPS board of commissioners to approve a referendum that would raise $92 million for operating expenses, as well as $200 million for capital improvements. If the board approves it, the referendum will be presented to Marion County residents for their vote on Election Day, May 8, 2018.
Public hearings will be held on Dec. 12 and Dec. 14 for the board to consider the operating and capital referenda.
This week, Dr. Lewis Ferebee, superintendent of IPS, told the Recorder that additional funding is necessary because the district of 31,820 students is facing a critical deficit.
“We’re at a point now where we are operating with a structural deficit,” Ferebee said.
He noted that a combination of a reduction in state funding, an increasing number of students with special needs and recent agreements to raise teacher salaries threaten to put a fiscal stranglehold on IPS.
School districts in Indiana have relied largely on state funds and local property taxes to fund operational expenses. However, Ferebee said IPS has been getting “significantly less” — about $10 million less — in state funds compared to the 2010-11 school year. This reduction amounts to $300 less to spend on each student, specifically a 5.88 percent decrease.
“Of course that’s a big hit to us,” Ferebee said. “That’s been a significant challenge for us.”
In fact, per-pupil funding for IPS has decreased while the average school district in Indiana has seen an increase of 4.74 percent.
According to an official IPS report shared with the Recorder, the school district has lost an average of $16.8 million annually since 2011 due to property tax caps.
Also, federal funding has declined by $14.2 million due to phasing out of the American Recovery and Reinvestment Act, while circuit breaker tax credits have reduced the district’s funding for capital projects and transportation by $16.8 million.
Ferebee said current state funding only covers a portion of educating the district’s special education students and English language learners, who now represent 17.5 percent, and 14.7 percent, respectively, of the total student body. These figures are higher than the state averages of 14.4 percent and 4.7 percent.
At the same time, IPS wants to keep its commitment to raising teacher compensation to attract and retain “high quality” educators.
“We’ve invested a significant amount,” Ferebee said.
IPS says it has invested over $8.8 million annually since the 2015-16 school year to provide teacher raises and maintain cost-neutral benefits (in spite of significant increases in healthcare costs).
IPS has not pursued a referendum since 2008. In recent years, however, turning to the ballot has become a common practice for school districts across the state seeking ways to cope with budget shortfalls, even in largely affluent communities.
In May of this year, 10 Indiana school districts asked voters to support funding increases. Three of those districts, located in neighboring Hamilton County north of Indianapolis, were successful in getting referenda passed to pay more teachers, fund new programs and support building expansions in Carmel, Sheridian and Westfield.
“This is an avenue that school corporations in our state must take,” Ferebee said. “It’s just something that is done to stay competitive. We want to stay competitive with other school corporations by making sure we are able to hire and train the best teachers for our students, and not lose them because they find better salaries and benefits.”
Currently, the minimum teacher salary in IPS, $40,000, stands in the middle of the highest minimum salary in the Indianapolis metropolitan area, which is in Speedway City Schools ($43,384), and the lowest, $38,000, which is in Beech Grove City School.
Another significant problem faced by IPS has been declining enrollment in recent years, due to more families moving to districts in suburban areas in and around Marion County.
According to the annual report released by IPS for the 2017-18 school year, overall enrollment has remained steady, with only a modest decrease from 32,470 in 2013 to 31,888 this year.
However, the number of traditional students in the district has dropped significantly in that same time frame from 30,496 students to 24,032.
Still, administrators are happy that overall enrollment has stabilized and is at least moving upward.
IPS officials say that the good news is that the deficit is not as bad as originally forecast by budget analysts. In March, they announced a projected budget shortfall of at least $21.8 million, which could have been as high as $30 million.
Ferebee said the district has been able to cut that shortfall in half by selling buildings, liquidating some assets and finding more efficient ways to use funds.
Specifically, IPS has generated $15,295,000 in revenue by selling five properties no longer needed for district operations, and another $1,155,000 by selling four former school buildings for community re-use. In addition, the district generates $736,500 annually by leasing underutilized facilities to charter school operators, who serve more than 1,700 students.
Still, he added, revenue from the referendum is needed to support teacher compensation and capital improvements to make certain campuses safer with adequate lighting, updated playground equipment and maintenance of facilities.
“Without significant dollars in our budget since our last capital referendum, there is a lot of deferred maintenance that needs to be addressed,” said Ferebee.
However, some are not convinced that a referendum is needed at this time.
“These decisions should be based on data, and there has not been any data to support some of the proposed changes that will have a substantial financial impact on the district,” said Dountonia Batts, executive director of the IPS Community Coalition (IPSCC), a local education advocacy organization.
Batts, who was informed of the referendum in another community meeting in the late summer, said there have not been enough details presented by IPS at this time for IPSCC to take a position on the upcoming referendum.
IPSCC recommends an independent audit of all the funds, program/curriculum offerings, and for a five year projected demographic study to be completed.
“There has been no data released in a comprehensive form that shows what is being spent, how much is needed and what the expected changes are,” Batts said. “What if the referendum isn’t enough to deal with the changes that are being proposed? Where has the money gone from the surplus IPS was supposed to have? We need more; (there is) not a lot of transparency in how the money is being spent.”
When asked how IPS best uses the money it already has, Ferebee provided answers related to how the district has “done everything” to be as efficient with existing resources as possible while also investing in more compensation for teachers.
“We are much more efficient than most school corporations in Marion County in terms of central services,” he said. “When you look at what they spend and their student population and what we spend, we’re below the bar compared to our peers.”
In its report, IPS stated that since 2011, it has cut annual central administration expenditures by $5.3 million, a reduction of 32.5 percent, while comparable districts have witnessed an average 14.5 percent increase.
Ferebee also cited other efficiencies such as selling under-utilized facilities, moving from a “two-tier to three-tier” transportation system and using fuel-efficient propane buses.
If approved, the referendum would amount to an average monthly increase of $25 to $30 per household in Marion County.
Of course, there will likely be residents at the board meetings and voting on the referendum who do not have children in the IPS district and have never attended a school in the district. Why, they may ask, should they support the referendum?
Ferebee said he believes they will also benefit from investing in more funding for IPS, because a quality education system is the heart of economic growth and is very much connected to meeting the challenges of building a robust workforce and keeping home values up.
“We help breathe life into the city,” Ferebee said. “We believe that for Indianapolis to be strong, IPS has to be strong. IPS has been making progress, but to continue that path we need these additional resources to stay on our path of excellence.”
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