IPS referendum

Indianapolis Public Schools may ask taxpayers for more money. A three-year deficit and raises for teachers are driving the decision.

PHOTO: Dylan Peers McCoy
Indianapolis Public Schools leaders may ask the public for more funding.

With Indianapolis Public Schools slowly burning through its savings, district leaders may soon ask taxpayers for more money.

For the third year in a row, the district expects to operate at a deficit, following years of declines in state funding and growing spending on teacher pay. Now, to balance the budget, some district leaders say IPS may need to ask taxpayers for more money through a referendum.

It will be more than a year before the district can put a referendum to increase property taxes on the ballot, said Superintendent Lewis Ferebee. But with state funding stagnant or declining, Ferebee said that he believes the district will “absolutely” need to have a referendum for more funding to pay teachers at the current rate and potentially increase pay in the future.

In recent years Indiana schools have become largely reliant on state funding for operating expenses, with local money primarily paying for transportation and facilities. But districts with pinched budgets often appeal directly to residents to increase property taxes and send more money to schools. Of the 11 school districts in Marion County, eight have asked taxpayers for more funding to pay operating expenses such as teacher salaries and six were successful. The most recent district to make an appeal was Washington Township, which passed a referendum last fall.

Next year, IPS expects to spend about $22 million more on operating expenses then it receives in state, local and federal dollars. The district can make up for that gap in the short-term because it has about $57 million in savings, and it is adding millions of dollars to its coffers each year from the sale of unused buildings. But neither strategy is sustainable in the long term.

“We know we have deficits,” said Weston Young, the district’s chief financial manager. “Ultimately, much like a lot of the other local districts and state districts, an operating referendum is very much a consideration for our district.”

Before district leaders appeal to voters for more cash, however, they are aiming to cut some of the costs that are weighing down the shrinking district — which has lost thousands of students over the last decade. The biggest drain are the district’s underused schools. The district has nearly three times as many seats as there are high school students to fill them, which dramatically pushes up costs at some schools.

(Read: Empty hallways, higher costs force Indianapolis Public Schools to consider closing high schools)

Last summer, IPS leaders announced plans to close some of the district’s high schools. Ferebee said last week that the district could close schools by 2018-2019.

Board member Kelly Bentley said that closing some high schools is one way that the district can show taxpayers that it is managing its finances responsibly — and win more support for a referendum.

“I think the district has been and continues to be really good stewards of the money that we have,” she said. “We need to continue to do that so that the taxpayers feel comfortable that we are doing what we can with what we have, and there really is no other alternative.”

IPS leaders are also looking to prove their fiscal responsibility in other ways: Since Ferebee took the helm three years ago, the district has touted a focus on making sure funding goes directly to schools. Last year, consultants for the district found that spending on management and leadership had fallen to $684 per student in 2015-2016 from $876 in 2012-2013.

But IPS leadership has also spent big on some areas. The district has spent hundreds of thousands of dollars to pay outside consultants to help plan a new approach to school budgeting. And last fall, the district approved the first teacher raise in years, which increased the minimum salary for teachers to $40,000 — at a price tag of about $1.7 million per year, according to an IPS spokesperson.

If the district wants to raise teacher and principal salaries again, the district will need to have a referendum, Bentley said.

“With concentrated poverty like we have in IPS, I just think it’s a huge challenge for principals and teachers,” she said. “We just need to be able to pay them competitively. I just hope that the public will see that.”

IPS referendum

Indianapolis Public Schools offers buyouts to up to 150 teachers

PHOTO: Tajuana Cheshier/Chalkbeat TN
Indianapolis Public Schools is offering $20,000 buyouts to teachers who retire.

Indianapolis Public Schools is offering teachers $20,000 payments to retire, in a move that could cut costs amid a severe deficit.

Nearly 250 educators are eligible for the buyout, which would be contributed directly to retirement plans for teachers who take the offer, according to the district.

District officials say the offer is not a cost-cutting move but rather an effort to enhance the district’s ability to set its budget for next year and plan for its hiring needs. In a written response to questions, head of human resources Mindy Schlegel wrote the offer “is not a buyout, but an early notice incentive.”

“The district is focused on incentivizing early notice of planned retirements so we can apply those notices to budgeting and staffing work principals are doing now versus addressing those challenges in June,” she wrote. “Knowing staffing shifts early is one of the most critical levers they can use in planning for next year.”

Teachers have 11 days to make their decision. They must notify the administration by 5 p.m. on April 20 if they want to take the buyout, according to the district. The district apparently could back out of the deal, though — officials have until May 4 to decide whether to go forward with the program.

A minimum of 100 and a maximum of 150 educators would have to accept the offer for the district to go through with it. If 150 teachers accept the $20,000, the payouts could cost the district as much as $3 million. The district could ultimately save money even if it replaces retired teachers, because veteran teachers are paid more.

When asked how much the offer could save the district in the long run, Schlegel said the payments are “not really about cost savings.”

School board member Mary Ann Sullivan said the offer has a number of benefits. It could help the district get a clearer picture of its staff and finances at a time when it is facing a severe budget shortfall. But it could also help the district avoid laying off teachers, she said.

“If you can manage to not do that — avoid that situation — most people would think that’s a good goal,” she said.

To take advantage of the deal, teachers need to be eligible for regular retirement under the rules of the Indiana Public Retirement System. Teachers as young as 55 years old could be eligible if they have at least 30 years of service. Older teachers would be eligible with fewer years of service. Teachers would need to retire at the end of the 2017-18 school year.

The retirement plan administrator, VALIC, will host a session 4:30 to 6 p.m. Thursday in the boardroom of the Education Services Center, according to an email sent to teachers and obtained by Chalkbeat.

“I hate to lose teachers,” said Rhondalyn Cornett, president of the Indianapolis Education Association. But the offer could be desirable for teachers who were trying to decide whether they can afford to retire, she said. “It’s a good opportunity because I do know there are some teachers who are going to want it.”

Some teachers were already considering retirement because they were displaced during the high school closing process, Cornett said.

The incentive for higher-paid teachers to retire comes at the same time as the district is considering ways to cut costs after withdrawing a request for more funding from taxpayers. Superintendent Lewis Ferebee has told RTV6 the district might also freeze hiring and furlough administrators. Last week, Schlegel told Chalkbeat the district had not yet decided whether teachers might be laid off.

In her email about retirement incentives, Schlegel wrote she did not anticipate the plan would affect class size. Whether the district replaces teachers will depend on the subjects they teach, she wrote.

The district has been grappling with budget deficits for years, but the issue has become more severe in recent months. District leaders say the budget crunch is caused by declining state and federal funding as well as the high cost of operating expenses such as raises for teachers.

In November, the administration released a plan to appeal to voters to increase property taxes and school funding. But following a rocky rollout and campaign, district leaders first reduced their request and then withdrew the referendum. They are currently working with the Indy Chamber to review finances and craft a request that would appear on the November ballot.

IPS referendum

147 Indianapolis educators still don’t know where they will work next year

Thomas Barwick | Getty Images

Nearly 150 Indianapolis Public Schools educators don’t know where they will teach next year, more than six months after the district announced that many high school teachers would be required to reinterview for their positions.

The administration displaced 418 certified staff for 2018-19 as part of the closings of three of its seven high schools. Many of those educators have found positions, but 147 current high school staffers have not, according to the administration.

If the teachers are not hired for a new position, they remain on the displaced list. If they do not find positions by July 15, they will be placed in vacancies that match their license area, according to Mindy Schlegel, who heads human resources for the district. There are currently 163 open positions in secondary schools, and educators could move to middle or elementary schools depending on their licenses.

“We think that given the fact that 400 teachers were initially displaced as a part of the transition, this process has gone smoothly,” Schlegel wrote in an email.

The decision to displace teachers at high schools across the district — including campuses that will stay open — was designed to help educators find schools that are “the right fit.” But the move created additional uncertainty at a time when high schools were already in upheaval, and some teachers are dejected that they were required to apply and reinterview for positions they have held for years.

Now, there is additional uncertainty around the process because the district is in the midst of a severe budget crunch. After postponing a referendum that would have appealed to voters for tens of millions of dollars in extra funding each year, the district is facing a large shortfall next year. The district could impose hiring freezes or other cuts to spending on staff in order to help close that gap.

The administration has not yet decided whether to lay off any teachers through a reduction in force, Schlegel wrote, and her office is focused on placing high school teachers.

“The administration has had discussions with staff internally around what’s the best way to approach reducing expenditures, but also protecting the classroom and maintaining as many staff members as possible,” she wrote.

Not all high school teachers were displaced. Some educators remained in the same positions even if they transferred to new schools, including those with training to teach International Baccalaureate courses, arts specialists, life skills teachers, and career and technical teachers.

The move to require teachers to reinterview for positions was part of a broad push to reconfigure the district’s high schools in a bid to save money, improve the schools’ quality, and attract students. The district is closing three high schools and overhauling the academic approach at the four remaining campuses to create academies with focuses such as engineering, construction, and teaching. High school students also were required to select new schools based on their interests.

Media specialist Gregg Nowling considers himself lucky. After nearly five years at Arsenal Technical High School, he was required to reinterview for his position at the school, and he was not rehired. Within weeks, however, he had found a position at Harshman Middle School. Many of his friends have not yet found positions.

“There’s a lot of guilt there,” he said. “It’s horrible. You have teachers applying for jobs that they’ve had for years — that they’ve been really good at for years.”

Rhondalyn Cornett, president of the Indianapolis Education Association, said that many teachers are distrustful of the process. Veteran educators are frustrated watching younger teachers get placed before they do, she said, and some believe they have not gotten placed precisely because they are more experienced. (Although veteran teachers are higher paid, school principals pay the same amount regardless of experience level and the district absorbs the difference in pay.)

“It is demoralizing,” Cornett said.