Public Schools (K-12) Spending

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LETTER E-MAILED TO THE EDITOR OF THE INDIANAPOLIS STAR ON MARCH 17, 2002:

I received the following E-mail on March 15: "Is anyone mad enough to call someone now that our most precious commodity, the education of our children, is being threatened. We cannot afford to lose out on these children’s education, regardless of what it costs. It’s a sad world when children are used as pawns in politics."

Informed Hoosiers can use all the facts about Indiana’s budget shortfall to let their elected representatives know that harmful K-12 public school cuts are unnecessary. All the budget shortfall facts are included in the November 15 O’Bannon-Kernan balanced budget plan and the House Bill 1004 versions passed by the Indiana House of Representatives on February 4, passed by the Indiana Senate on February 28, and proposed in the March 13 Conference Committee report. When the facts from these varied sources are organized together in a spreadsheet format, it is clear that teacher layoffs and other harmful public school cuts do not need to occur.

First, consider the size of the budget shortfall this biennium. The largest estimated budget shortfall to date is $1.896 billion, broken down as follows: $1.280 billion revenue shortfall; $323 million for retroactive Medicaid payments to 18,000 claimants; $251 million for Medicaid spending in excess of what was appropriated; $42 million to comply with mandates in the federal Health Insurance Privacy and Portability Act.

Next, the Informed Hoosier should review all the state spending cuts proposed or implemented the past four months. There have been a total of $1.543 billion in spending cuts identified, of which $1.007 billion would be implemented by the General Assembly and a different $536 million implemented by the Governor. The proposed public schools cut is a $289 million monthly payment the Governor is authorized to delay until the 2005 fiscal year.

A total of $712 million in fund transfers and shifts have also been proposed to deal with the budget shortfall. Public schools funding will be affected by House Bill 1196, which reduces the tuition support public schools receive from the state by $57.7 million the last six months of 2002 and $57.7 million the first six months of 2003. However, House Bill 1196 also allows the public schools to offset reductions with transfers from their debt service, capital projects, and transportation funds.

Now, do the math. There have been $2.255 billion in proposed spending cuts and fund transfers or shifts. The budget shortfall is only $1.896 billion. This means that $359 million of the proposed spending cuts are not needed. This $359 million should be used to reduce the announced public schools spending cuts.

The Governor should not delay the $289 million public schools payment. All school superintendents assume this delay is a sure thing, and they have not included it in their budgets. Eliminating the delay would generate a public schools windfall that makes harmful cuts, such as teacher layoffs, unnecessary.

The $57.7 million cut in public schools tuition support the first six months of 2003 should be eliminated by the General Assembly. The $57.7 million cut left in place the last six months of 2002 is only 0.62 percent of the state’s $9.312 billion public schools budget this biennium. Also, this small tuition support cut can be offset with the public school fund transfers allowed by House Bill 1196.

Informed Hoosiers need to contact Governor Frank O’Bannon and instruct him to not delay the $289 million public school payment. Also, the following General Assembly leaders must be told to eliminate the $57.7 million public schools tuition support cut scheduled for the first six months of 2003: Bob Garton (Senate President Pro Tempore), Lawrence Borst (Senate Finance Committee Chairman), Vi Simpson (Senate Finance Committee Ranking Minority Member), Chet Dobis (House Speaker Pro Tempore), Patrick Bauer (House Ways and Means Committee Chairman), Jeff Espich ( House Ways and Means Committee Ranking Minority Member), Brian Bosma (House Minority Leader).

The truth is evident when all the budget shortfall facts are analyzed. No partisan politician should continue to insist that harmful public school spending cuts are necessary.

Best regards,

Aaron Smith
Founder, watchdogindiana.org

The spreadsheet documentation for this letter follows:

SOME ADDITIONAL COMMENTS ABOUT K-12 PUBLIC SCHOOLS SPENDING: 

Page 145 of Indiana’s Comprehensive Annual Financial Report for the fiscal year ended June 30, 2001, shows that statewide education spending in fiscal year 2001 totaled almost $6.1 billion, or $994 per citizen. The $994 each Indiana citizen spent for education in 2001 was a 20.48% increase over the $825 spent in fiscal year 1997. Inflation for this same four-year time period only increased 11.04%. Per capita education spending the last four years has increased 1.86 times more than inflation. In other words, Indiana's citizens provided, and the Indiana General Assembly spent, $697 million more on education than necessary to keep up with inflation and population increases. About  $527 million of this excess spending went to K through 12 education.

What did we get for this generous investment of our hard-earned tax dollars? The Fall 2001 ISTEP+ results for Indiana’s public schools show that only 57 percent of third grade students met the standards in both English/language arts and mathematics. Only 46 percent in the sixth grade, 58 percent in the eighth grade, and 58 percent in the tenth grade passed both tests. For test results this bad, Indiana’s public schools get an "F" grade.

These bad test results might be acceptable if there was improvement. But there is almost no change from the bad ISTEP+ results of Fall 1997. At that time only 57 percent in the third grade, 50 percent in the sixth grade, 60 percent in the eighth grade, and 54 percent in the tenth grade passed both tests. 

While per capita state funding for K-12 public schools from 1997 to 2001 increased 1.86 times more than inflation, public schools spending has not increased as dramatically as state funding for other purposes. Total per capita state spending increased 2.69 times more than inflation the past four years. It is clear that other areas of state spending need to be cut first before additional public school spending cuts are made.

Some Hoosiers believe increased spending is necessary for better education. Past results do not justify this belief. However, an unneeded erosion of current public schools spending could be harmful.

The Governor, and certain special interest groups, are trying to use the threat of unnecessary K-12 spending cuts to increase taxes. Informed Hoosiers need to speak out against this cynical political maneuver to avoid unneeded tax increases.

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