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School-savings checklist poses big challenges

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County's superintendents point to requirements in contracts, public law

By Kevin Koelling, Managing Editor

PERRY COUNTY - Gov. Mitch Daniels advocated in a Dec. 28 news release that Indiana residents use a checklist to determine if local school systems are doing all they can to avoid teacher layoffs in the face of budget shortfalls.

That checklist was to have been considered and adopted by the state board of education Friday, according to a Dec. 18 news release from that agency. It includes several actions that are difficult, if possible at all, for school corporations to accomplish under existing laws or contracts negotiated with teachers.

Published by The News Thursday, the governor's release announced $297 million in cuts to kindergarten-through-high-school funding beginning with this month's payments. He had previously announced that approximately $300 million would have to be cut from statewide school funding and urged administrators to do it without laying off teachers. Cuts had already been made in other areas of state funding, and were said to be necessary because sales-tax revenues have been lower than needed.   

A quote in the Dec. 18 release made state education superintendent Tony Bennett sound almost happy to make cuts.

"Reducing education funding is a last resort, but this unfortunate situation gives us the unique opportunity to take innovative, cost-saving steps that will put Indiana's schools in a stronger long-term position," he said. "I have every confidence school boards, teachers, administrators and communities will come together and make the best possible decisions to reduce spending without compromising student learning."

Nate Schnellenberger, president of the Indiana State Teachers Association, was less optimistic when he addressed the state education board Dec. 17, saying the recommendation to cut approximately $300 million in public education funding "could jeopardize the future of our children."

He also objected to the form the cuts were to take.

"While property-tax reform was necessary, the Indiana General Assembly rejected ISTA 's recommendation to focus school property-tax reform on the capital-projects-fund and debt-service-fund levies, which are the fastest growing local property tax levies," he said. "Instead, the General Assembly eliminated $900 million in school general-fund property taxes that supported instructional programs."

He offered a number of recommendations he said could help school systems cope with budget challenges, such as the transfer of money from other school funds into general funds and a rise from 3.5 to 5 percent in the amount of capital-projects money that can be transferred to the general fund. Neither would result in tax increases.

Schnellenberger also recommended the suspension of "several new educational programs that we cannot now afford, including an expanded testing program, virtual schools and private-school tax credits."

Those and other recommendations he made would bring more than $700 million in revenues "that could be used to protect instructional programs and learning opportunities for students," he told the state education officials. "Failure to follow at least some of our suggestions could result in thousands of school employees being laid off, class sizes substantially increasing and essential student learning programs being eliminated ...."

Ron Etienne, superintendent for the Tell City-Troy Township School Corp., said Thursday the figures weren't yet final, but it appeared his district's funding would be cut by 2.4 percent from 2009 funding. Compared to what he was expecting for this year based on enrollment, the drop rises to 4.5 percent.

Closing the city's junior-high building, a move currently under consideration by the school board, "would take a big bite out of it," Etienne said of the amount he needs to cut. "We're trying to cut back on everything we can."

Several teachers may retire in the near future, he said, and money could be saved by hiring younger teachers or not replacing those who leave.

"I think we can survive a year without cutting programs," Etienne said. "We may have to make some hard decisions, but I don't anticipate that happening this coming year."

The checklist Daniels urged citizens to use included 10 criteria. The first suggests they ask school officials if they've refrained from all salary and benefits increases for all school employees. Etienne said no pay was raised this year except what was required in contracts based on increases in experience levels. Those go only to teachers not already at the top of the pay scales, he explained, and average about 1 percent.

The second governor's-checklist item concerns reducing insurance costs by changing plans or joining a state health plan. Etienne said the school board looked at the state plan a couple of years ago and found it would have brought a 25-percent increase.

"Now we're seeing 0-percent increases because of some things we've done," he said. The state plan doesn't carry the same benefits as the plan the employees are on, he added, which they opted for in negotiations.

The checklist urges reductions in administrators' and school-board members' compensation packages.

"They want to reduce school-board members' insurance," Etienne said, "but we did that a few years ago. They are eligible, but have to pay for it, so we're not providing anything."

The governor also suggested the suspension of matches for 403(b), 401(a) and 457(b) retirement plans. The Tell City-Troy Township School Corp. employees don't have those, and the matching contributions the corporation does make are also negotiated when contracts are renewed.

A corporation hiring freeze suggested in the checklist "is something we'll look at," Etienne said. "As people leave, if we don't have to replace them, we won't, but we have to look at what's best for kids."

He said he's "pretty well satisfied" with current class sizes, "but some are getting near 28 or 29," so adjustments may be needed in the future.

Memberships in professional associations should be eliminated and travel expenses should be reduced, the checklist suggests. Etienne said the school board hadn't looked at the professional-associations issue, "but there will be reduced travel expenses because I learned yesterday the state has cut professional-development money." The corporation had already been "really frugal in the number of conferences we go to," he added.

The governor wants corporations to "outsource transportation and custodial services and direct savings to their rainy-day funds," according to the checklist. Outsourcing would have corporations turn to companies that provide various services, which means people providing them now would be laid off, Etienne said. "There aren't enough savings to make it a worthwhile venture," he added.

The junior high's closure would satisfy the eighth checklist item, which recommends the sale, lease or closure of underutilized buildings.

The ninth one suggests the reduction of operational and programmatic budgets to previous-year levels.

"We haven't increased them for several years," Etienne said. "I think they've taken care of that for us."

The final checklist item urges people to ask if officials have "reviewed school-consolidation options both within the corporation and between corporations. That suggestion has been made locally as a way to cut administrative costs even if all of the existing buildings remained open, but is opposed by people who express loyalty to their own school systems.

If such a review were to occur, "it has to be initiated by everyone involved," Etienne said. "We're open to anything."

Perry Central Superintendent Mary Roberson agreed, and said the two school systems have shown in the past they're willing to work together and consider any options that would best serve students and their communities. Joint-purchasing, professional-development and alternative-school agreements between them are examples, she said, of areas where the systems operate like consolidated districts while retaining autonomy.

She also noted many of the recommended changes are dependent on bargaining with corporation employees, and said contracts for both certified and noncertified workers at the Leopold school are being negotiated.

One suggestion that will bring savings was already being worked, she said, explaining a dental-plan change is expected to cut costs by $10,000.

In the transportation area, Roberson said Perry Central officials decided they could achieve savings by moving away from the outsourcing they had been practicing by having several contracted drivers in addition to those employed by the corporation.

She'd received a letter dated Dec. 31, the superintendent said, that showed Perry Central's funding cut was to be more than 3.5 percent.

The News was unable to contact Al Chapman, the superintendent for Cannelton City Schools Friday, when all three of the county's school systems were closed due to snow. He said at a December school-board meeting, however, that he expected cuts to equal the amount of new money that corporation was anticipating for 2010, so it would operate on funding similar to that of 2009.