Update on Legislature’s Action to Fix the School Funding Crisis

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Editor’s Note: The January issue featured the school funding crises in our interview with CCS Superintendent Nicholas Wahl. We provide this story as a brief update as to how the Indiana Legislature is attempting to “fix” the funding crisis. If you want to see our earlier story click here. While the Legislature’s efforts to date appear to be headed toward providing some increased funding for schools like Carmel and Zionsville, the question is whether it will be sufficient to avoid local tax referendums.

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In 2007, schools like Carmel got a large percentage of its money from property taxes. Under that model, more expensive homes in the district meant more money for schools. But in 2008, the state placed a cap of 1 percent on the amount of property tax revenue school districts could collect. To replace that funding stream, the state developed a formula to distribute money to schools.

It can get confusing, but there are really only two terms you need to know: foundation and complexity. Foundation is the term for the amount of money the state gives a school for each enrolled student. Therefore, bigger schools would see more money. The other term is complexity — a calculation that awards schools additional money based on how many students from low-income families they educate — determined primarily through free and reduced lunch rates.

For example, the state gives Carmel around $5,000 per student. But that dollar figure amounts to almost $7,000 in the Indianapolis Public Schools district, where the free and reduced lunch rate is 71 percent.

To help close the gap between districts, the legislature is currently rewriting the formula. The new formula would increase the amount of foundation money for each student, but dramatically cuts complexity fund.

For districts with a lot of kids qualifying for free and reduced lunch — that were used to seeing more funds come from the complexity fund — this is just as devastating. Rather than educational programs being cut, these districts worry about personnel, like school nurses, being cut.

The budget already passed through the House and is being considered by the Senate. Senate Appropriations Chair Luke Kenley, R-Noblesville, says his side of the legislature will likely make tweaks to this budget, so the amount of money for both complexity and foundation may change.