The Journal Gazette
Monday, November 07, 2016 10:01 pm

School funding sleight of hand

Indiana lawmakers have a favorite refrain: "More than half of the state’s budget goes to education." 

That’s their go-to answer to any question regarding public education, suggesting there should be no question about support for schools because so much money is spent on them. 

Of course, lawmakers don’t acknowledge 2008 property tax changes – achieved with a 17 percent increase in the sales tax rate – shifted all school general fund costs from local taxpayers to the state. It suddenly appeared the state was spending more, even after $300 million was permanently cut from schools in 2010.

Nor do they acknowledge two important points – the state last year spent $131.5 million on vouchers, and the legislature places almost no accountability on those dollars. A report from Indiana University’s Center for Evaluation & Education Policy makes that painfully clear.

Researchers Jodi S. Moon and Molly S. Stewart reviewed funding mechanisms for voucher programs in six states, concluding Indiana "offers more vouchers than any statewide voucher program in the country"; has no cap on voucher distributions; and is open to students who have not previously enrolled in a public school, meaning the state "assumes an additional funding burden" for those students.

Of the six states reviewed, they found Indiana is the only one that allows parents of voucher recipients to choose whether to have a private or public school provide special education services and "there are no minimum qualifications or oversight regarding the private school’s ability to provide the necessary services."

In an email, Stewart notes federal special education law ensures students with special needs get a "fair, appropriate, public education." If their public school services fail to meet this requirement, parents have options, including litigation.

"If a parent chooses to have the private school provide services, they no longer have any legal rights other than the right to withdraw their child from that school and get the services from the district instead," Stewart wrote. "Since the school does not have to meet any minimum requirements regarding the ability to provide services – such as teacher certification, for example – the student may end up with inadequate services. In other states, the voucher program may not award the state special education funds to the private school, but in Indiana, these funds follow the student. Thus, public funding may be paying for special education services that may not be appropriate for a particular student’s needs."

Also unlike other states, there is no fiscal accountability requirement for the Indiana voucher program. Since it began in 2011, only one review of spending has been done – an internal compliance report by the Indiana Non-Public Education Association. That report – never made public – found one in four voucher schools miscalculated amounts charged to the state for vouchers. With great fanfare, the schools voluntarily refunded $4 million to the state, but lawmakers never followed up with their own audit.

"If a state does not collect fiscal information from private schools, they also cannot report that information, so data collection, reporting, and public accountability are all related," Stewart wrote. "Audits for private schools receiving public money are required in four out of the six cases in our study – not in Indiana or Arizona – so required audits would be a recommended change for Indiana policy."

The IU study considers fiscal accountability, but there’s also a public policy element. Voucher schools are not subject to the accountability provisions required of public schools. Their school board members are not accountable to voters. Their board meetings are not open to the public. Taxpayers do not have the right to inspect their financial records.

And one more point about the amount of money Indiana spends on education. The property tax changes made in 2008 – as well as the vast expansion of school choice options – render long-term spending comparisons nearly useless. The Center on Budget and Policy Priorities each year reviews public investment in K-12 education, but Indiana is left out of the 50-state review because "changes in its education formulas between fiscal years 2008 and 2016 prevent meaningful comparisons across years."

In other words, when you hear an Indiana lawmaker boast more than half of the state’s budget goes to education, it doesn’t mean your neighborhood school is well funded, nor does it mean the lawmaker – in the case of millions of dollars used by voucher schools – has any idea how the state money is spent.

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