School Finance

Who supports Indianapolis Public Schools’ bid for more money? It’s not clear.

PHOTO: Dylan Peers McCoy

More than a month after Indianapolis’ largest school district unveiled plans to ask voters to increase property taxes, it is unclear what groups support it and who will shepherd it through the likely political fight.

Local groups that are often involved in district politics overwhelmingly told Chalkbeat that they have not decided whether to back the measure. And few high-profile community leaders have come out in support.

The district will face two contentious issues: voter concern about large increases in property tax bills, and questions about how the money will be spent. Many probable supporters are waiting to learn more, including whether district schools run by outside operators, known as innovation schools, would benefit.

District leaders are forming a political action committee to lead the campaign and they have not yet determined who will be at the helm, Superintendent Lewis Ferebee said. When asked for high-profile supporters of the referendums, he said he did not want to be “presumptuous.”

“I haven’t asked anyone specifically,” he said. “I anticipate over the next couple of months we will see people come out and speak in support.”

The referendums, which are expected to appear on the ballot in May, would increase school funding by as much as $936 million over eight years. One referendum would pay for $200 million to improve school buildings, primarily safety updates. A second ballot measure would raise up to $92 million per year for eight years to pay for operating expenses, such as the cost of special education, with about $66 million dedicated to raises for teachers.

The appeal to voters is driven by declines in state and federal funding, according to the district. Ferebee’s administration says they have trimmed costs as much as possible without impacting academic quality. Without more money from taxpayers, they say they won’t be able to sustain spending on teacher raises and special education services.

Since the Indiana legislature capped property taxes and increased reliance on state money for school budgets in 2008, districts across the state have turned to taxpayers to raise money. More than a third of school districts have asked for tax increases, said Larry DeBoer, an economics professor with Purdue University. About 60 percent of the 164 referendums have been successful.

It is hard to predict which ballot measures will prevail, said DeBoer, who follows referendums across the state.

“So much of it depends on the quality of the campaign and the popularity of the superintendent,” he said. “I’ve given up attempting to predict.”

For now, several of the politically influential groups in the district are on the sidelines while they decide whether to support the measures. That includes the Indianapolis Chamber of Commerce, the Metropolitan Indianapolis Board of Realtors, the district teachers union, and Stand for Children, a parent organizing group that helped many of the board members win their seats.

The office of Indianapolis Mayor Joe Hogsett, a Democrat, offered a neutral statement from spokesperson Taylor Schaffer. “Mayor Hogsett urges residents to become educated on the proposal, and become engaged by letting their voices be heard at the ballot box in May,” she wrote.

Some of the most involved community members say they understand the need for more money, but they have not decided about the referendum. At least in part that’s because supporters and critics of innovation schools are waiting for the district to explain how much those schools would benefit from the tax increase.

Innovation schools are part of the district but managed by outside nonprofits or charter operators. The schools are often in district buildings and educate children who live in the district. But their teachers are employed by the operator and they cannot join the district union.

David Greene of Concerned Clergy of Indianapolis, which has been consistently critical of Ferebee’s administration, wrote in a statement that the group supports quality facilities and competitive teacher pay, but the community does not know what will happen with the money raised.

“It would be a great tragedy to the community if taxes were paid and facility upgrades happened to building(s) that went to innovation schools,” he added.

That’s also a sticking point for the teachers union. Even with the promise of raises for teachers, some members are ambivalent about the proposal because they are concerned the district will direct the money to innovation schools, said Rhondalyn Cornett, president of the Indianapolis Education Association.

“The state is starving districts using public funds to fund charter schools and parochial schools or private schools now. You don’t leave districts with a choice,” Cornett said. But teachers “don’t trust that the money is going to be used just for … IPS employees.”

At the same time, supporters of innovation schools, such as the parent organizing group Stand for Children, want to know more about how much money will go to those schools before deciding whether to back the measures.

Stand has members with children in traditional district and innovation schools, said executive director Justin Ohlemiller. They want to ensure that “kids across all the district regardless of school type are benefiting.”

Despite the uneasiness over how much of the money will go to innovation schools, many local leaders agree the district needs more money.

“This is the school district’s only way to get the adequate funding to give teacher pay raises and to adequately fund their operating needs at the school district level,” said Sen. Greg Taylor, a democrat who represents part of the district in the state legislature and has two children in IPS schools.

Taylor said he wants to understand the details of the referendums before endorsing them, but he is likely to support them. “There’s no doubt in my mind that teachers’ salaries need to go up a notch,” he added.

But some potential supporters balked at the steep tax increases the district is proposing. The operating referendum is one of the largest an Indiana school district has sought since 2009. If both referendums pass, taxes could go up as much as $28 per month for a house worth $123,500.

Betsy Wiley, who leads the pro-school choice advocacy group Institute for Quality Education, said that as an IPS taxpayer, she is personally leaning against the referendum because of the cost.

“I think investment in IPS makes sense. I think the size that they are asking for is what people may question,” said Wiley. “If I were on a fixed income, I would freak out.”

Asking people to vote to increase their taxes will always be a challenge, said school board President Mike O’Connor. But “people support paying teachers competitive wages. People support providing good, high-quality education.”

Over the next four months, it will be up to the supporters of the referendum to convince voters that increasing school funding will pay off.

“We’ve got work to do,” O’Connor said.

spending squeeze

Facing a state budget crunch, Gov. Cuomo proposes modest 3 percent education boost

Governor Andrew Cuomo delivers his executive budget address.

Facing budget pressure at home and from Washington, Gov. Andrew Cuomo proposed increasing school aid by 3 percent this year —  far less than what advocates and the state’s education policymakers had sought.

Cuomo put forward a $769 million increase in school aid during his executive budget address on Tuesday, less than half of the $1.6 billion sought by the state’s Board of Regents. In response, the state’s top education officials said they were “concerned,” and suggested that they would press lawmakers to negotiate for more education spending.

The governor’s modest increase in school funding comes amid a projected $4.4 billion state budget deficit, a federal tax overhaul expected to squeeze New York’s tax revenue, and the threat of further federal cuts.

Still, Cuomo, a Democrat who plans to run for reelection this fall and is considering a 2020 presidential bid, defended his spending plan as a boost for schools at a time of fiscal uncertainty.

“We have increased education more than any area in state government,” he said during his speech in Albany. “Period.”

He also floated a plan to have the state approve local districts’ budgets to ensure they are spending enough on high-poverty schools. And he set aside more money for prekindergarten, after-school programs, and “community schools” that provide social services to students and their families.

Now that Cuomo’s proposal is out he must negotiate a final budget for the 2019 fiscal year with lawmakers by April 1. While the Democratic-controlled assembly is likely to push for more school spending, the senate’s Republican leaders are calling for fiscal restraint and tax cuts.

What was the response?

Advocates and policymakers were alarmed by Cuomo’s proposed $769 million education bump — a 3 percent spending increase compared to last year’s 4.4 percent boost.

Last month, a coalition of statewide education organizations estimated that the state would need to increase spending by $1.5 billion just to maintain current education services. The group, which includes state teachers union and groups representing school boards and superintendents, called for a $2 billion increase.

In a statement Tuesday, Board of Regents Chancellor Betty Rosa and State Education Commissioner MaryEllen Elia noted that Cuomo’s proposal was less than half the amount they sought. They promised to work with lawmakers to ensure the final budget amount “will meet the needs of every student throughout our State.”

Anticipating such criticism, Cuomo noted in his speech that he has expanded education spending by nearly 35 percent since taking office. His proposal would bring total school aid to $26.4 billion — the largest portion of the state budget.

Still, that didn’t prevent pushback. A state assemblyman heckled Cuomo as the unveiled his education spending plan, suggesting it was not enough money.

“It’s never enough,” Cuomo shot back.

Will poorer schools get more funding?

Cuomo said he wants to fight “trickle-down education funding” and ensure that poor schools receive their fair share of cash.

To that end, Cuomo wants the state education department and his budget office to review local school district budget plans. The plan is aimed at larger school districts, including New York City, which Cuomo singled out in his speech.

“Right now we have no idea where the money is going,” Cuomo said on Tuesday. “We have a formula. We direct it to the poorer districts. But what did Buffalo do with it? What does New York City do with it?”

It’s unclear how the proposal would impact New York City, which already uses a funding formula designed to send more money to schools with needier students. But some education advocates were intrigued by Cuomo’s idea, which they said could be a way to expose and fight inequities in school funding across the state.

“Right now, school-level expenditure with consistent definitions is really a mystery,” said Ian Rosenblum, executive director of The Education Trust – New York. “It means that a lot of inequity can be swept under the rug.”

Cuomo officials also said that 73.1 percent of funding will be directed to high-needs districts in this year’s budget, which the state said was the highest share ever. Last year, they received 72 percent.

But advocates are more concerned with the state’s “foundation aid” formula, which funnels a greater share of funds to high-needs districts. The formula was created in response to a school funding lawsuit settled more than a decade ago; advocates say schools are still owed billions from the settlement.

Cuomo proposed boosting foundation aid this year by $338 million, a far cry from the $1.25 billion requested by the Board of Regents. Without more foundation aid, some advocates say Cuomo’s promise of greater funding equity rings hollow.

“Equity is you’re actually helping to lift up poor districts so that they can provide an equitable education,” said Billy Easton, executive director of the union-backed Alliance for Quality Education. “Not just that they’re receiving a larger share of a too-small pot.”

What does all of this mean for New York City schools?

New York City is not immune from Albany’s budget crunch.

The total increase proposed for the city — $247 million — falls about $150 million short of the mayor’s projections in November, according to the city’s Independent Budget Office.

It may also be difficult for the city to wrangle funding for big-ticket items. Mayor Bill de Blasio wants to expand his prekindergarten program to 3-year-old students, but he estimates that he will need $700 million from state and federal sources by 2021. (The governor proposed $15 million to expand pre-K seats across the state.)

How about charter schools?

Cuomo would boost spending for charter schools by 3 percent the same rate as for district schools. He also wants to provide more support for schools that rent private space, which is a major financial burden for some schools.

“Once again, Gov. Cuomo demonstrated his unwavering commitment to ensuring every student in our state has access to a great public education,” said James Merriman, CEO of the New York City Charter School Center.

Business of education

Memphis leaders say diversifying school business contracts will help in the classroom, too

PHOTO: Laura Faith Kebede
Winston Gipson confers with his wife and daughter, who help run Gipson Mechanical Contractors, a family-owned business in Memphis for 35 years.

Winston Gipson used to do up to $10 million of work annually for Memphis City Schools. The construction and mechanical contracts were so steady, he recalls, that his minority-owned family business employed up to 200 people at its peak in the early 2000s.

Looking back, Gipson says being able to build schools was key to breaking through in the private sector.

“When we got contracts in the private sector, it’s because we did the projects in the public sector,” said Gipson, who started Gipson Mechanical Contractors with his wife in 1983. “That allowed us to go to the private sector and say ‘Look what we’ve done.’”

But that work has become increasingly scarce over the years for him and many other minorities and women. The program designed to address contract disparities in Memphis City Schools was cut during its 2013 merger with Shelby County Schools.

A recent study found that a third of qualified local companies are owned by white women and people of color, but such businesses were awarded just 15 percent of the contracts for Shelby County Schools in the last five years.

It was even worse for black-owned construction companies, like Gipson’s, which make up more than a third of the local industry but were awarded less than 1 percent of contracts.

The disparity is being spotlighted as the city prepares to mark the 50th anniversary of the death of civil rights leader Martin Luther King Jr., who was assassinated in Memphis while trying to fight for the rights of minority workers in 1968.

On Jan. 25, Chalkbeat will co-host a panel discussion on how Shelby County Schools, as one of the city’s largest employers, can be an economic driver for women- and black-owned businesses. Called “Show Me The Money: The Education Edition,” the evening event will be held at Freedom Preparatory Academy’s new Whitehaven campus in conjunction with MLK50 Justice Through Journalism and High Ground News.

Community leaders say school-related business contracts are a matter of equity, but also an education strategy. Since poverty is a crucial factor in why many Memphis students fall behind in school, the lack of job opportunities for their parents must be part of the discussion, they say.

The district already is taking steps to improve its record on minority contracting, starting with setting new goals and resurrecting the city district’s hiring program.

Big district, big opportunity

Shelby County Schools is Tennessee’s largest district. With an annual budget of more than $1 billion, it awards $314 million in business contracts.   

An otherwise dismal 1994 study of local government contract spending highlighted Memphis City Schools’ program to increase participation of historically marginalized businesses as one of the county’s most diverse, though some areas were cited as needing improvement. The same study criticized the former county school system, which lacked such a program, for its dearth of contracts with Minority and Women Business Enterprises (MWBEs).

But when the two districts merged in 2013, the program in Memphis City Schools disappeared.

“We had to cut, cut, cut,” said school board member Teresa Jones. “We were trying to stay alive as a district. We did not focus as we should have.”

Jones, a former school board chairwoman, said it’s time to revisit the things that were working before the merger. “We have to get back,” she said, “to make sure there’s equity, opportunity, access, and an atmosphere that promotes business with Shelby County Schools.”

District and community leaders say the consolidated district has lost its ability to develop relationships with qualified minority-owned businesses.

“There was an infrastructure where African-Americans felt comfortable enough approaching the school system” for work, said Melvin Jones, CEO of Memphis Business Contracting Consortium, a black business advocacy group formed in 2015. “There was trust. During the merger, they dropped the infrastructure.”

Brenda Allen

Without the outreach, “we’re seeing the same vendors,” said Brenda Allen, hired last summer as procurement director for Shelby County Schools after working in Maryland’s Prince George County Public Schools, where she oversaw a diversity contracting program.

“We’re not marketing the district like we should,” she told school board members in November.  

Shelby County Schools is not alone in disproportionately hiring white and male-owned companies for public business. Just 3 percent of all revenue generated in Memphis goes to firms owned by non-white people, even though people of color make up 72 percent of the city’s population, according to a 2016 report by the Mid-South Minority Business Council Continuum.

Not coincidentally, district and community leaders say, Memphis has the highest rate of young adults who aren’t working or in college, and the highest poverty rate among the nation’s major metropolitan areas. About 60 percent of students in Shelby County Schools live in poverty and all but three of the district’s schools qualify for federal funding for schools serving high-poverty neighborhoods.

Jozelle Luster Booker, the CEO of the MMBC Continuum, developed an equity contracting program for the city utility company following the 1994 study that was so critical of the city. The program funneled half a billion dollars to minority-owned businesses — an example of how government policies can promote equitable contracting, and grow businesses too.

“When that happens, you could basically change the socioeconomic conditions of that community, which impacts learning,” Booker said. “They’re ready to learn when they come to school.”

Shelby County Schools plans to hire a consulting firm to help develop a procurement outreach program and set diversity goals for its contractors and subcontractors. The program will launch in July, and Allen plans to hire three people to oversee it.

PHOTO: Brad Vest/The Commercial Appeal
Bricklayers from TopCat Masonry Contractors LLC work on an apartment complex in downtown Memphis in 2014.

The district also is part of a city-led group that provides a common certification process for businesses seeking contracts with city and county governments, the airport, the transit authority, and Memphis Light Gas & Water. The city’s office of business diversity and compliance also has a list of qualified minority businesses, offers free business development courses, and accepts referrals from other government entities to reduce redundancy.

“As you spend public dollars, you always want those dollars to be spent in your neighborhoods because that money comes back into your economy,” Allen said. “When people have jobs, you should see crime go down. You should see more people wanting to do business in the community if you have a good program.”

Leveling the playing field

In order for it to work, there has to be consistent reports, measures and, most of all,  accountability, according to Janice Banks, CEO of Small Planet Works, who helped the district with its disparity study.

Gipson agrees.

A wall of his second-floor Memphis office is lined with photos of some of his most significant projects during his 35 years of business, including a multimillion-dollar mechanical contract with AutoZone when the Memphis-based car part company moved its headquarters downtown in the early 2000s.

The work was made possible, he said, because of public sector jobs like constructing nine schools under Memphis City Schools. But that work evaporated after the merger. “It’s mostly been Caucasian companies that do the work (now),” he said. “It’d be one thing if you didn’t have anyone qualified to do it.”

Shelby County Schools will have to show commitment, he said, if it wants to level the playing field.

“You have the mechanism in place to make a difference,” he said. “Now do you make a difference with that mechanism or do you just walk around, beat your chest, and say we have a disparity study and let things run the way they’ve been running?”

“If you don’t make it happen, it will not happen,” he said.