School Finance

Schools try to understand why the wealthiest Marion County district got the most new poverty aid

PHOTO: Scott Elliott
Warren Township schools had to make cuts this year after a drop in federal poverty aid.

All but two Marion County districts, excluding Indianapolis Public Schools, saw a cut in federal poverty aid this year. But that doesn’t necessarily mean fewer Indianapolis kids are living in poverty.

Rather, for some districts it might simply reflect a bit of a paperwork problem: If fewer Indianapolis adults completed annual Census surveys used to determine how many families qualify for aid and other services, it might explain why some schools got less money.

Federal poverty aid to schools, often referred to by the section of the Congressional act that created it, Title I, flows to school districts every year through a decades-old federal law now called No Child Left Behind. That money is supposed to help poor families, so it would stand to reason that the school districts with the lowest median family income would qualify for the most federal aid.

But that’s not what happened this year.

Instead, federal poverty aid went up for schools in Franklin Township, the wealthiest school district in Marion County with a median family income above $40,000, but went down in nearly every other school district, including Warren Township, which borders Franklin but has a median family income roughly $10,000 less.

When school districts talk about poverty, they often use the percent of students who come from families that qualify for the federal free or reduced-price lunch programs as a way of comparing one district to another. To qualify, a family of four cannot earn more than $44,863 annually.

But federal poverty aid is actually not based on the percentage of students who qualify for free or reduced-price meals, said Lee Ann Kwiatkowski, an assistant superintendent in Warren Township who also sits on the Indiana State Board of Education.

Federal poverty aid actually depends on many factors, but the biggest is the number of households within a district that are counted by the U.S. Census as below the federal poverty level. That number is based on surveys sent to homes.

The problem is not all families return the surveys. That can skew the district’s poverty percentage if not enough poor families report their income, and there is not much the school district can do about it. Census updates are done every year in between the big census counts each decade.

It’s critical for school districts that families fill out Census surveys, Kwiatkowski said.

“In Warren, something we have to battle is making people understand the importance of them filling out all of that information,” she said.

Less aid means tough cuts

The U.S. Department of Education uses a combination of the American Community Survey, federal income tax returns, food stamp data, social security information, Bureau of Economic analysis surveys and the most recent population estimates to determine how much aid each district should receive.

The department also tried to count the number of neglected children, children in foster homes and those receiving Temporary Assistance for Needy Families federal aid (food stamps), but those kids only account for about four percent of the total count of formula children.

In most states, including Indiana, a single person is considered to be below the poverty level if they make less than $11,770 a year. For each additional household member, that number goes up by $4,160. So a family of four, for example, must report that they make less than $24,250 a year to be considered a poverty-level household. That is a much lower threshold than what counts as “poor” under the free and reduced-price lunch program.

Although it’s common for the amount of poverty aid given to school districts to fluctuate, that inconsistency can be a problem when districts are surprised by big swings.

Warren Township, for example, received $3.4 million this year, which is about $362,000 less than the district received last year, or about a 9.5 percent decrease. The big drop has forced tough choices.

For example, the district announced this summer a cut in the number of teaching assistant jobs. Those salaries had been paid using federal aid. Those assistants are especially important in the lowest-performing schools, where they work one-on-one with struggling students to help them keep up, or catch up, to their peers.

The district also reduced the amount of after-school tutoring it offers at every school, Kwiatkowski said. Those programs are costly in part because of late busing to take kids home. In another example, a new literacy program designed to help 5th and 6th grade students who struggle in reading and writing wasn’t purchased because the district couldn’t afford it for those grade levels.

Warren is lucky, however, to have a federal Race to the Top grant to help fill in some of the holes, especially when it comes to personalized learning and technology.

Making more money count

Beech Grove City Schools is the other Marion County district besides Franklin Township that is getting an increase in poverty aid this year

Superintendent Paul Kaiser said it is not surprising. Poverty is on the rise in Beech Grove.

“We did not do anything out of the ordinary,” Kaiser said. “Over half of the homes in Beech Grove are rental properties now. We don’t have that stability we used to have of people growing up in Beech Grove and passing on their houses to relatives.”

But even though Beech Grove’s funding increased, the district still received much less than most Marion County districts at a little more than $714,000, up from last year’s $678,000. By comparison, much larger and poorer Indianapolis Public Schools received nearly $29 million.

Kaiser said the district does its best to alert families about completing Census surveys so that Beech Grove is accurately represented year to year.

“It’s important that we get that information out to our parents and alert them that it will not only help them in their personal lives from a financial standpoint, it helps the schools as well,” he said.

Beech Grove used the extra funding this year to hire two new teaching assistants.

“We obviously can’t hire another teacher for $36,000,” Kaiser said. “But we appreciate the funding. I believe it’s one of the reasons our test scores have been rock solid and part of the reason we’re an A school district.”

He was surprised, however, that Franklin Township received the biggest increase in poverty aid this year. Only 38 percent of students in Franklin Township receive free or reduced-price meals. But the district received a more than $100,000 increase in aid this year.

“There’s a huge difference in demographics,” Kaiser said. “I don’t know what happened there.”

Kwiatkowski is certain it comes back to Census surveys.

“In Franklin, they must have had a lot more people fill it out,” she said.

budget season

New budget gives CPS CEO Janice Jackson opportunity to play offense

PHOTO: Elaine Chen
Chicago Public Schools CEO Janice Jackson announced the district's $1 billion capital plan at Lázaro Cardenas Elementary School in Little Village.

Running Chicago’s schools might be the toughest tour of duty in town for a public sector CEO. There have been eight chiefs in a decade – to be fair, two were interims – who have wrangled with mounting debt, aging buildings, and high percentages of students who live in poverty.

Then there’ve been recurring scandals, corruption, and ethics violations. Since she was officially named to the top job in January, CEO Janice Jackson has had to clean up a series of her predecessors’ lapses, from a special education crisis that revealed families were counseled out of services to a sexual abuse investigation that spotlighted a decade of system failures at every level to protect students.

But with budget season underway, the former principal finally gets the chance to go on the offensive. The first operations budget of her tenure is a $5.98 billion plan that contains some good news for a change: 5 percent more money, courtesy of the state revamp of the school funding formula and a bump from local tax revenues. CPS plans to funnel $60 million more to schools than it did last school year, for a total of $3.1 billion. Put another way, it plans to spend $4,397 per student as a base rate — a 2 percent increase from the year prior.

CPS’ total budget comes out to $7.58 billion once you factor in long-term debt and an ambitious $1 billion capital plan that is the focus of a trio of public hearings Thursday night. When it comes to debt, the district owes $8.2 billion as of June 30, or nearly $3,000 per every Chicago resident.

“The district, without a doubt, is on firmer footing than it was 18 months ago, but they’re not out of woods yet,” said Bobby Otter, budget director for the Center for Tax and Budget Accountability. “When you look at the overall picture (the $7.58 budget), they’re still running a deficit. This is now the seventh year in a row they are running a deficit, and the amount of debt the district has, combined with the lack of reserves, leaves them with little flexibility.”

Earlier this week, standing in front of an audience of executives at a City Club of Chicago luncheon, Jackson acknowledged that it had been an “eventful” seven months and said she was ready to focus on strategies for moving the district forward. “I won’t be waiting for next shoe to drop or wasting time and resources waiting for next problem. I want to design a system to educate and protect children.”

“I’m not in crisis mode,” she added.

Here’s what that looks like in her first year when you just consider the numbers. The biggest line items of any operating budget are salaries, benefits and pensions: Taken all together, they consume 66 percent of CPS’ planned spending for the 2018-2019 school year. Rounding out much of the rest are contracts with vendors ($542.6 million, or 9 percent), such as the controversial janitorial deals with Aramark and SodexoMAGIC; charter expenditures ($749 million, or 13 percent); and spending on transportation, textbooks, equipment, and the like (12 percent).

A closer look at how some of those items are allocated offers a window into Jackson’s vision. The Board of Education is scheduled to vote on the plan July 25.

Investing in choice

Earlier this month, the district announced a nearly $1 billion capital plan, funded by bonds, that would support new schools, technology upgrades, and annexes at some of the district’s most popular campuses. The operating budget, meanwhile, accounts for the people and programs driving those projects. It proposes nearly doubling the staff, from 10 to 17, in the office that manages charters, contract programs, and the creation of new schools. It reestablishes a chief portfolio officer who reports directly to the CEO. And it adds expands access to International Baccalaureate programs and Early College STEM offerings. In a letter at the beginning of the 2019 Budget Book, Jackson said such expansions “move the district closer to our goal of having 50 percent of students earn at least one college or career credential before graduating high school.” 

Advocating for students

The budget seeds at least two new departments: a four-person Office of Equity charged with diversifying the teacher pipeline, among other roles, and a 20-person Title IX office that would investigate student abuse cases, including claims of student-on-student harassment.

Leaning into high schools

Fitting for a budget designed by a former high school principal – Jackson was running a high school before age 30 – the plan leans in to high schools, establishing $2 million to fund four new networks to oversee them. (That brings the total number of networks to 17; networks are mini-administrative departments that track school progress, assist with budgeting, and ensure policy and procedures are followed.) And it earmarks $75 million across three years for new science labs at neighborhood high schools. What’s more, it supports 10 additional career counselors to help campuses wrestle with a graduation mandate – set forth by Mayor Rahm Emanuel – that seniors have a post-secondary plan to graduate starting with the Class of 2020.

Throwing a lifeline to small schools

The budget also sets forth a $10 million “Small Schools Fund” to help schools with low enrollment retain teachers and offer after-school programs. It also earmarks an additional $5 million to help schools facing precipitous changes in enrollment, which can in turn lead to dramatic budget drops.   

Supporting modest staff increases

After a round of layoffs were announced in June, the budget plan adds at least 200 teachers. But the district would not provide a clear accounting of whom to Chalkbeat by publication time. Earlier this week, it announced plans to fund additional school social workers (160) and special education case managers (94).

The district plans to add positions for the upcoming 2018-2019 year.

As Chicago Teachers Union organizer and Cook County Commissioner candidate Brandon Johnson pointed out in an impromptu press conference earlier this week in front of district HQ, the budget is still “woefully short” on school psychologists, nurses, and counselors. And it doesn’t address the calls from parents to restore librarians and instructors in such subjects as art, music, physical education — positions that have experienced dramatic cuts since 2011. “What is proposed today still leaves us short of when (Mayor Emanuel) took office,” Johnson said. “The needs of our students must be met.”

Principal Elias Estrada, who oversees two North Side schools, Alcott Elementary and Alcott High School, said he was still figuring out how the additional staffing would work. He’s getting another social worker – but he oversees two campuses that sit three miles apart, so he figures he’ll have to divide the person’s time between campuses. Estrada asked the board at Monday’s budget hearing to help him understand the criteria it uses to determine which schools get extra staff or additional programs, like IB. “I need a counselor, a clerk, and an assistant principal,” he said; currently those positions also are shared between the elementary and the high school.

After the meeting, he said that schools might have gotten slightly bigger budgets this year, but the increase was consumed by rising salaries and he wasn’t able to add any positions. What’s more, his building needs repairs, but it didn’t get picked for any of the facilities upgrades in the $1 billion capital plan that accompanied the budget.

“What is the process?” he asked. “The need is everywhere.”

At two public hearings on Monday, fewer than a dozen speakers signed up to ask questions of the board, central office administrators, or Jackson.

To see if your school is getting one of the newly announced positions or any funding from the capital plan, type it in the search box below.

School Finance

IPS board votes to ask taxpayers for $315 million, reject the chamber’s plan

PHOTO: Dylan Peers McCoy

Indianapolis Public Schools officials voted Tuesday to ask taxpayers for $315 million over eight years to help close its budget gap — an amount that’s less than half the district’s initial proposal but is still high enough to draw skepticism from a local business group.

The school board pledged to continue discussions in the next week with the Indy Chamber, which released an alternative proposal last week calling for massive spending cuts and a significantly smaller tax increase. The school board rejected the proposal as unrealistic and instead voted to add a much larger tax measure to the November ballot.

If the school board and the chamber come to a different agreement before the July 24 meeting, the board can change the request for more taxpayer money before it goes to voters. Some board members, however, were dubious that they would be able to find common ground.

“While I appreciate the fact that we want to continue to negotiate, I’m pretty sure that I’m at rock bottom now,” said school board member Kelly Bentley. “That initial proposal by the chamber is, unfortunately in my mind, it’s insulting. It’s insulting to our children, and to our neighborhoods, and to our families.”

Chamber leaders, whose support is considered important to the referendum passing, were skeptical about the dollar amount. In a press release, the group said the district was “taking another step towards seeking a double-digit tax increase.”

“We’re concerned that our numbers are so divergent,” said chamber president and CEO Michael Huber in the statement. “We need to study the assumptions behind the $318 million request; clearly the tax impact is significant and the task of winning voter support will be challenging.”

During the board meeting, which lasted more than two hours, district leaders discussed why schools need more money and why the chamber report is unrealistic. They also took comments from community members who were largely supportive of the tax increase.

Joe Ignatius, who mentors students through 100 Black Men of Indianapolis, said that he has seen the benefits of more funding from referendums in other communities.

“This should be a no brainer, to invest in our future for the students,” Ignatius said. “Don’t think about the immediate impact of the dollars that may come out of your pocket but more the long-term impact.”

If the district goes forward with its plan, and voters approve the tax increase, the school system would get as much as $39.4 million more per year for eight years. A family with a home at the district’s median value — $75,300 — would pay about $3.90 more per month in property taxes. (Since the initial proposal, the district reduced the median home value used in calculations on the advice of a consultant.)

The district plan comes on the heels of months of uncertainty. After the school board abandoned its initial plan to seek nearly $1 billion for operating expenses and construction, district officials spent weeks working with the Indy Chamber to craft a less costly proposal. Last month, the board approved a separate referendum to ask taxpayers for about $52 million for school renovations, particularly school safety features.

But the groups came to different conclusions about how much money the district needs for operating expenses.

The chamber released an analysis last week that called for $477 million in cuts, including eliminating busing for high school students, reducing the number of teachers, closing schools, and cutting central office staff. The recommendation also included a $100 million tax increase to fund 16 percent raises for teachers.

District officials, however, say the cuts proposed by the chamber are too aggressive and cannot be accomplished as quickly as the group wants. The administration and board members spent nearly an hour of the meeting Tuesday discussing the chamber plan, why they believe it’s methodology is wrong, and the devastating consequences they say it would have on schools.

Even if the $315 million plan proposed by the district passes, it will come with some sacrifices compared to the initial plan. Those cuts could include: reduced transportation for magnet schools, field trips, and after school activities; school closings; increased benefits costs for employees; and smaller pay increases for teachers and employees.

The district did not make a specific commitment to how much teacher pay would increase if the amount asked for in the referendum is approved, but Superintendent Lewis Ferebee said the funds would pay for consistent raises.

“We would be at least addressing inflationary increases and cost of living, but we hope that we can be higher than that,” said Ferebee. “It would depend a lot on what we are able to realize in savings.”

The school board’s decision to rebuff the chamber’s recommendation puts the district in a difficult position. The chamber has no official role in determining the amount of the referendum, but it could be a politically powerful ally.

Last week, Al Hubbard, an influential philanthropist and businessman who provided major funding for the chamber analysis, said that if the district seeks more money than the group recommended, he would oppose the referendum.

The total tax increase would vary for each homeowner within district boundaries. The operating increase would raise taxes by up to $0.28 for every $100 of assessed property value, while the construction increase would raise taxes by up to $0.03 per $100 of assessed property value.