With the large increases in property tax assessment, much has been said about the amount of funding (82-85 percent) which goes to local school systems. Many taxpayers are crying for reform and Governor Mitch Daniels is talking consolidation of school districts and services.
While the most common advantage cited for district consolidation has been cost reduction, there are other outcomes which may have an impact on decisions regarding consolidation.
Indiana University's Center for Evaluation and Education Policy issued a 16 page brief assessing the consolidation of schools in Indiana. Their conclusions did not necessarily support consolidation of schools for either financial or academic reasons. They did find that consolidation of services between school corporations and districts could be beneficial.
Gov. Mitch Daniels wants school districts to put more money into classrooms without spending any more. His suggested solution: more cooperative purchasing among school districts.
But Daniels has said repeatedly that Indiana is spending only about 61 cents of each dollar in the classroom instead of on administration. Raising that amount to 65 cents would shift $300 million annually more directly to student learning.
Greencastle School Superintendent Dr. Robert Green told the BannerGraphic that he agrees with many of the study's findings.
Green is not opposed to consolidation but wants to be convinced that it is being done for the right reasons, which are to improve education and save money.
He believes our nation seems to want neighborhood schools. Yet, people who do not have children in school may have an issue with paying taxes to support the schools.
"Communities come together to provide a lot of services. It's in everyone's interest to have good school systems. It helps attract employers and can improve the local tax base," he states.
Consolidation has been shown to reduce costs in small school districts in the short run, but these reductions are replaced later by other costs such as hiring more administrators and specialized staff. Over time this negatively affects the tax base.
"If schools consolidate, the residents of those corporations have to adjust their tax rates. You have to decide if you want to pay the tax rate from North Putnam or Greencastle," he added. "There can be a large difference in the tax base rates."
The IU study notes that in most states at least 40 percent of every dollar spent on education outside the classroom is spent on administration and support functions such as transportation, food services, human resources, technology and building maintenance.
Dennis Costerison, executive director of the Indiana Association of School Business Officials, recently reported that administrators would be happy to have more authority to make decisions that will save their districts money.
But he said that saving money in the transportation fund or capital funds -- which have their own property tax levies -- won't necessarily do it. That's because schools can't transfer that money to the general fund without a change in the law. Daniels said his proposal wouldn't change that.
Green believes the real savings in consolidation is in the closing of buildings.
"If Greencastle consolidates with North Putnam you might have one superintendent but the same number of administrative staff. Plus, where do the students go? North Putnam schools don't have space and Greencastle schools don't have space. There is room at TZ for 60 additional students but we can't carry very many more in any of our other schools," he said.
"Then you have to start talking about building new facilities. School construction costs are in the $40 to $50 million range," he noted.
The Governor has also been touting shared services between districts.
"We've been doing that for years," stated Green. "The West Central Education Service Center has over 40 schools involved. We save money by bulk buying through the service center. We get bulk discounts on gas, computers, roofing materials, lots of different items. We have a lot of buying power.
"There are other alternatives to district consolidation that can incorporate advantages with less controversy. I'd like to see those attempted first. Tax reform is twenty years overdue. We need to look at all options," he concluded.
Executive Director of the Indiana Association of Public School Administrators John Ellis sent a letter to the Indianapolis Star calling the Governors remarks about current property tax issues ironic. He also says the perception that excessive school administrators is driving up the cost of education is not true.
He also cites a study done by the Lafayette, Tippecanoe and West Lafayette School Corporations about the advantages and disadvantages of consolidation. The findings of the central office administrative staffing showed that "such savings would result in less than a fraction of one percent of the total operating expenses of the combined districts."
North Putnam School Superintendent Murray Pride also respectfully disagreed with the governor.
"Before counting money, people are projecting money saved," he told the BannerGraphic. "Look at Clay, Vigo and Vanderburg counties which are all consolidated districts, then look at their administrative costs versus ours. The only way to save money is by closing schools," he claims.
He agrees with Green's assessment that the county schools are at capacity and cannot absorb students from other corporations.
In speaking about the North Putnam school corporation he stated, "Our people would not want to assume someone else's tax rate. We have four corporations and four tax rates. Which one would be used to operate the consolidated system?"
Murray Pride also talked about that fact combining school districts may consolidate assists but it also consolidates debt.
"If you have one or more school with building debt then one school corporation becomes responsible for all liabilities as well. There is not a quick fix. The mechanism for paying for schools in this state is and has always been property taxes. Every superintendent would be tickled to death to find a new way to finance it," he explained.
"I'd like to see it move from property tax to something else. I live here and pay property taxes too," he added.
Pride also addressed the issue of transportation and choosing what community would close its buildings.
"I don't know of any community that wants to say OK, you can close our building. That is one of the most traumatic decisions a board can make. Communities have been traditionally built around their schools. Closing one or more is a process no one likes to go through," Pride said.
"Transportation would be a tremendous issue. You still have to have a person responsible for transportation. Buses have to run. And, what about a kid that lives in the far north corner of Putnam County that has to be transported to Greencastle?" he asked. "It takes a long time to move kids from the fringes of North Putnam to Greencastle."
As far as shared services, North Putnam is also a member of the West Central Cooperative Group. Pride questioned the governor's suggestion for the need to share custodial and food services. He wondered how an employee can work a 6 hour shift at North Putnam and then go to work at Greencastle.
"The cooks who are working feeding our kids couldn't get in their cars and move to another school in time to serve another set of lunches. The Governor didn't explain how it would work. It sounds nice, but what parent wants their kid to eat lunch at 2 p.m.?"
The Governor has appointed a special commission on local government reform that may have a deep and long-range impact on the state. It is co-chaired by former Governor Joe Kernan (whom Daniels defeated in the 2004 election) and Randall Shepard, chief justice of the Indiana Supreme Court.
The commission begins work this month and has until late December to recommend how local governments can increase the efficiency and effectiveness of their operations to lower taxpayer costs. The impact of these recommendations could be far-reaching as the committee will consider:
* What local government offices might be eliminated to achieve efficiencies and cost savings for Hoosier taxpayers? Specifically, should township/county property tax assessors be abolished in favor of a uniform process managed by the state?
* What local units of government (including schools and libraries) might be successfully consolidated to reduce overhead and administrative expenses?
* What local government services or functions might be reduced, eliminated, or provided in new ways to achieve savings for Hoosier taxpayers?
Pride added that he wished schools weren't funded by property taxes. "We didn't create that funding and we are part of the issue, but until they find an alternative, this is how the state says we pay for education. Hopefully, we never get to the point that we decide we don't need education. It is the bedrock of what we have in this country," he declared.