Future of Schools

Seven big reasons to pay attention to Indiana education news in 2018

PHOTO: Dylan Peers McCoy
Betsy DeVos during a visit to Indiana.

The election of former Gov. Mike Pence as President Donald Trump’s vice president made Indiana a showcase for school choice advocates nationally. Indianapolis Public Schools, short on both cash and students, moved to close nearly half of its high schools and will ask taxpayers for nearly a billion dollars in extra funding. A spotlight was thrown on underperforming virtual schools.

Those are just a few of the educational challenges and opportunities that Indiana weathered in 2017 — many of which are also sure to capture headlines in the year ahead.

Here is a recap of some of the biggest issues Chalkbeat has covered over the past 12 months, and a hint of what’s likely to come.

  1. A virtual mess

Indiana Virtual School had 1 teacher for every 222 students in 2016-17 and a 5.7 percent graduation rate in 2016, yet has grown by thousands of students since it opened in 2011 — and received millions of dollars in state funding that was paid out, in part, to an affiliated for-profit company. The findings of a Chalkbeat investigation into the school prompted Gov. Eric Holcomb to call for “immediate attention and action” for virtual schools by the state board of education and to pledge to have his staff work with the board to make sure the schools and groups that oversee them are held accountable.

Even charter advocates agree that virtual schools’ authorizers could be more assertive in their oversight of virtual schools with poor performance, suggesting that an area of school choice that has remained largely under the radar could face a new level of scrutiny.

  1. A changing high school landscape

As enrollment in Indianapolis Public Schools has shrunk, the high schools have seen student population drop from about 26,000 at a peak in the late 1960s to about 5,600 this year. The school board voted to close three of the district’s seven high schools and use the opportunity to offer students a variety of programs in the remaining schools in areas such as information technology, construction and the arts.

Students will get to choose which school, and which program, they want to attend next fall. But while that overhaul has addressed the question of underutilized buildings, it has the potential to throw the enrollment system out of balance should more students choose some schools over others.

  1. The path to graduation

To ensure that Indiana’s high school graduates have the skills to fill workforce needs or succeed in college, state lawmakers called for an overhaul of graduation requirements earlier this year. The “graduation pathways” that were ultimately developed and approved by the state board impose new requirements on students, such as taking exams, completing advanced courses, or gaining credit for internships.

But they drew widespread opposition from parents and educators, who say the new requirements are complex and overlap with existing Indiana diploma expectations. The new rules could prove particularly burdensome for students with disabilities or those who struggle academically.

The rules are not the only new stumbling block for future graduates. Indiana was told by federal education officials earlier this year that students who graduate with the general diploma, rather than more rigorous Core 40 or honors diplomas, would not be counted in the state’s graduation rate. Lawmakers and education officials are under pressure to find a solution.

  1. Money matters

Come spring, some Indianapolis taxpayers have a big decision to make: Will they vote to increase property taxes and add $936 million in new funding over eight years to make improvements and cover the costs of operating the city’s largest district? Two referendums will be on the ballot in May, after the Indianapolis school board voted to put the matter to taxpayers.

About $200 million would go to pay for campus safety updates, such as improvements in lighting and new entrances. But the bulk of the money — $92 million a year — would be used for operating expenses, such as to cover the costs of special education and teacher raises.

The district is also hoping to change the way schools are funded with a new approach meant to send more money to schools with more poor students. At the same time, a special $6.5 million pool of money is going to programs that attract middle-class families. District leaders say the system will become more equitable over time, but it’s unclear how long it will take.

  1. Au revoir ISTEP

The end is nigh for the beleaguered state test known as ISTEP. In April, state lawmakers finally settled on a replacement. The new test, called ILEARN, will be used for the first time in 2019.

In choosing the new test, the Indiana Department of Education reached back to an earlier round of educational expectations, the Common Core. Although Indiana abruptly withdrew from the Common Core standards three years ago, the company charged with creating ILEARN will use questions developed for a Common Core test.

The state is still working to create the ILEARN exam system, and high school tests will be particularly tricky. Initially, the state planned to stick with year-end subject tests, as it did in the past, but the state board is now recommending a college entrance exam, such as the ACT or SAT. It’s not yet clear how these new suggestions will work into the state’s plans with the ILEARN vendor, American Institutes for Research.

  1. State dollars, private schools

Indiana has found itself at the center of a national debate over whether to give families state-funded vouchers to pay for private school tuition. A Chalkbeat investigation into the voucher program found that 306 of the 313 schools receiving vouchers last year were religious. The reporting shed light on why secular schools seldom participate and why voucher-funded schools in Indiana have stricter testing requirements than any other state. It also revealed how state policy had quietly prevented an explosion of new voucher-funded schools, and how lawmakers were changing the rules to make it easier for new private schools to get state money.

  1. Center stage

Indiana is in the spotlight as President Trump’s secretary of education, Betsy DeVos, pursues an agenda that heavily promotes school choice. Since her confirmation, she has given the Hoosier state a great deal of attention, praising the state’s charter and voucher programs and touting several Indianapolis schools as models for the country. Among them were a struggling neighborhood school that was taken over by a community partnership, a Christian school dedicated to integration, and a charter school for students recovering from drug addiction.

She also made three visits. In May, she stopped by the annual conference of the American Federation for Children, an advocacy group she had led, in Indianapolis to promise an “ambitious expansion of school choice.” She returned again to highlight career and technical education at the national convention of FFA, which used to be known as Future Farmers of America. And she traversed the state as part of a national school tour. But it’s an open question whether the Indiana policies that DeVos has praised will be embraced nationally.

Future of Schools

Here’s how new federal rules could impact Indiana’s $14M private school tax credit scholarship program

PHOTO: Dylan Peers McCoy
Students at the Oaks Academy in Indianapolis, a private school, play during music practice. The Oaks accepts tax credit scholarships.

Some school choice advocates are uneasy that new federal tax rules could be detrimental to Indiana’s $14 million tax credit scholarship program.

In August, the U.S. Department of the Treasury released rules clarifying new tax law that limited how much state and local taxes an individuals could deduct from their federal taxes. Some fear the changes might discourage donors from contributing to charities like the state’s tax credit scholarship program, in which individuals and businesses can give money to fund students’ private school tuition in exchange for a tax credit from the state.

“Our primary concern is to make sure that the families who are relying on these scholarships, that they can continue to do so,” said Leslie Hiner, vice president of legal affairs for EdChoice, a national school choice advocacy organization based in Indianapolis. “There are a lot of unknowns.”

Jerry Stayton, superintendent of Elkhart Christian School, submitted a public comment about the regulations saying the scholarships are vital to helping private schools stay afloat and give opportunities to low-income families. The tax incentives have “encouraged giving to schools on a scale never before seen.”

“For the federal government to impose a tax on a state tax credit represents a strange and dangerous precedent,” Stayton wrote. “While the federal government is supreme in the United States, its strength is derived from strong, growing, supportive states with great local economies and excellent education.”

There’s optimism, though, that the regulations’ impact could be far more limited in Indiana than in other states,  given how established its scholarship program is, how low income taxes are here, and how many donors are individuals making smaller contributions.

“So far, Indiana is in a better position, I’d say, than some of the high-tax states,” Hiner said. “Nonetheless, that uncertainty is the thing … I have a lot of faith that people in Indiana, and I’m hoping, that any impact in Indiana because of its long history of charitable giving will not be great.”

Below, we break down how this news could impact Indiana’s school choice programs, as well as how the program works and got its start.

First, what are tax credit scholarships?

Indiana’s tax credit scholarship program, which lawmakers passed in 2009, lets taxpayers donate money to nonprofit, state-approved “scholarship granting organizations” in exchange for a 50 percent credit on their state taxes.

Those donations are then distributed to the nonprofits and given out to income-eligible Hoosier families as private school tuition scholarships. To participate, a family of four can’t make more than $92,870 per year.

In 2018-19, the program could distribute as much as $14 million in tax credits, though the amount that can be donated has no cap. Indiana’s tax credit cap has steadily increased up from $2.5 million since 2009.

While the use of vouchers far outstrips the tax credit scholarships, the program is still sizable. It serves 348 private schools across the state. In 2017, the program awarded 9,349 scholarships totaling more than $16 million.

The National Conference of State Legislatures reports that as of 2017, 17 states had tax credit scholarship programs. The largest one in the country is in Florida, where many corporations participate and the program collects and doles out hundreds of millions of dollars each year.

Is the program controversial?

Yes, though it gets far less attention than Indiana’s voucher program, where families use state tax dollars to pay for private school tuition. It also predates vouchers, which weren’t allowed in the state until 2011.

Tax credit scholarship supporters say the donations benefit students in need who otherwise could attend the school of their choice. They also argue the programs can results in savings for states, as the cost for the tax credits is lower than the cost to educate students in public schools.

Critics of the program say it’s just another version of state-subsidized private school, not unlike vouchers. They also point out it is unclear whether these programs allow states to save money — partially because data on where students go to school and how they transfer between public and private schools can be hard to track.

In Indiana, students do not need to have attended a public school before receiving a tax credit scholarship, and the scholarships can pay up to the full tuition amount at their desired school.

What’s the IRS rule change that is causing the concerns?

It comes in response to a part of the 2017 federal tax bill that limited how much state and local taxes someone could deduct from their federal taxes — up to $10,000. Hiner said federal officials proposed the change to allow the government to get more revenue. Giving fewer opportunities for deductions means the government collects more in tax dollars.

In order to get around the $10,000 cap, some high-tax states, such as New York, California, and New Jersey, took advantage of tax credit programs. As a result, the IRS proposed new rules that prohibit the tax credit workaround, and that’s what has school choice supporters up in arms.

“The IRS had a good reason for taking action, but unfortunately in taking action against those bad actors, they swept in thousands of nonprofits across the country,” Hiner said.

How will the rule change affect Indiana?

Advocates hope is that Indiana won’t take as big a hit as other states with higher taxes.

In a press release, the treasury department said most taxpayers will not be affected by the change, with about 1 percent of taxpayers seeing “an effect on tax benefits for donations to school choice tax credit programs.”

It’s really not clear yet if that will come to pass, Hiner said, because taxes won’t be filed until next year. No one can really say now how donors might change their behavior.

The state-approved nonprofit “scholarship granting organizations” that manage private tuition scholarship funds are already fielding questions from donors. Indiana has seven such organizations, six of which are currently granting scholarships.

“The one thing we’re stressing with everyone is to always contact your accountant, financial advisor, or tax preparer to walk through what the impacts could be,” said Betsy Wiley, executive director of the Institute for Quality Education, one of the state’s scholarship granting organizations.

But in Indiana, according to an analysis from CNBC, taxpayers on average don’t claim deductions over $10,000. While the rule change could impact corporations or very large individual donors, most Hoosiers don’t fall in those categories. The vast majority of donors are individuals, and 43 percent of those donations are for less than $1,000, Wiley said.

Wiley hopes the federal government decides to pause implementing these new rules until after taxes for 2018 are filed. This would give donors and nonprofits more time to understand what the effect might be so they can adjust at the state level.

Federal officials are collecting feedback through November, when there will be another hearing on the rules.

Momentum

Memphis moves from problem child to poster child on Tennessee’s new school improvement list

PHOTO: Brad Vest/The Commercial Appeal
Memphis has been a hub of local, state, federal, and philanthropic school improvement work since Tennessee issued its first list of "priority schools" in 2012.

The city that has been the epicenter of Tennessee’s school improvement work since 2012 got encouraging news on Friday as fewer Memphis schools landed on the state’s newest list of troubled schools.

Only 45 Memphis schools were designated “priority schools,” compared to 57 in 2014 and 69 in 2012.

Meanwhile, more schools in Nashville, Chattanooga, and Jackson were among the 82 placed on priority status, either for being ranked academically in the state’s bottom 5 percent or having a graduation rate of less than 67 percent. They are now eligible for a share of $10 million in state grants this year to pay for extra resources — but also interventions as harsh as state takeover or closure.

Half of the schools are new to the list but won’t face takeover or closure. Those school communities will begin working with the state education department to develop district-led improvement plans, a change from previous years.

Charter schools face the most dire consequences for landing on the list if they’re authorized by local districts. In Memphis, seven will close at the end of the school year, impacting more than 1,700 students:

  • City University School Girls Preparatory
  • Du Bois Elementary of Arts Technology
  • Du Bois Middle of Arts Technology
  • Du Bois Middle of Leadership Public Policy
  • Granville T. Woods Academy of Innovation
  • Memphis Delta Preparatory
  • The Excel Center (adult education)

Two other priority-status high schools already closed their doors in May. They were operated by former city schools superintendent Willie Herenton’s W.E.B. DuBois charter network.

This was the first priority list issued under Tennessee’s new system for holding schools and districts accountable and is based mostly on student test scores from 2015-16 and 2016-17. No negative results from last school year were factored in because of emergency state legislation passed to address widespread technical problems that disrupted Tennessee’s return to online testing in the spring.

The distribution of more priority schools beyond Memphis was notable.

“Shelby County in particular has had some momentum … (but) we have other districts that have not had that same momentum,” said Education Commissioner Candice McQueen during a morning call with reporters.

She praised Shelby County Schools for “changing the landscape” in Memphis by closing at least 15 priority schools since 2012 and for creating its own Innovation Zone to improve other schools. Another catalyst, she said, was the 2012 arrival of Tennessee’s Achievement School District, which has taken over dozens of low-performing Memphis schools and assigned them to charter networks, spurring a sense of urgency.

But student gains have been better under the iZone than within the state-run district. Of the 25 priority schools absorbed by the iZone, 16 have moved off of priority status. Nine schools taken over by the state have gone off the list.

“When you really try and find great school leaders and great teachers, when you extend time, when you focus on professional development, and when you also focus on accountability, good things are going to happen in schools,” said Brad Leon, a Shelby County Schools strategist who supervised the iZone in its early years.

Of the 45 Memphis schools on the newest list, less than two-thirds are within Shelby County Schools, and five of those could be eligible for state takeover, according to Antonio Burt, who oversees priority school work for Tennessee’s largest district. He declined to name them.

The state Board of Education signed off on the priority list on Friday during a special meeting. The board also approved its 2018 list of “reward schools” to acknowledge a fifth of the state’s public schools for student achievement and academic growth in the last year.

Tennessee’s priority list is issued every three years, and this was the third since 2012. But unlike with the two earlier rosters, 2018 priority status does not necessarily put a school on track for state takeover. That’s now an option of last resort as the state seeks to be less punitive and more collaborative with local school leaders.

PHOTO: Ruma Kumar
Shelby County Schools Superintendent Dorsey Hopson visits classrooms and students in 2015. He’s led Tennessee’s largest district since 2013.

“Our new school improvement model takes a student-focused, evidence-based approach to tailor interventions for our priority schools,” said McQueen, who promised to work closely with school communities to provide new resources. 

Those new resources will be welcomed in Memphis, where Shelby County Schools has absorbed the cost of continuing interventions even as federal and state grants expire.

“At the end of the day, we’re very proud of the work, but we’re not satisfied,” said Superintendent Dorsey Hopson. “We’re going to keep on working.”

In Nashville, Mayor David Briley called the increase from 15 to 21 priority schools “unacceptable” and promised to make swift improvements in the state’s second largest school system.

You can find the 2018 list here, but check back for a sortable list from Chalkbeat.