According to a recent analysis by Indiana Fiscal Policy Institute, the state faces a structural budget deficit of over $825 million for the two-year budget. The state faced a similar level of red ink two years ago (and even in prior years). At that time, lawmakers chose to spend down reserves and employ a host of accounting tactics to avoid reducing spending or raising taxes.

Problem: the reserves are gone and the chickens have come home to roost.

On top of an $825 million budget deficit, the state owes over $700 million to school corporations, universities and local governments for delayed payments. Having already depleted the state’s Rainy Day Fund, diverted $190 million in general fund contributions earmarked for the Pension Stabilization Fund, and dug a huge hole in delayed payments, state policy makers have all but exhausted their options.

With a state constitution prohibiting an indebted state government, the challenge is even more acute.

To paraphrase one of Donald Rumsfeld’s favorite quips, "When you find yourself stuck in a hole, stop digging."

National financial analysts lowered the state’s bond rating earlier this year, expressing concerns about the state’s financial picture. Of particular concern were several proposals to add hundreds of millions of dollars in new spending - in a time of fiscal crisis - for a phased-in full-day kindergarten program.

K-12 school funding constitutes about 65% of the total state budget. Clearly, that doesn’t leave state leaders much room to work in cutting costs without impacting education.

In addition to state funding, schools receive local funding from property taxes. The amounts vary widely among school corporations, but roughly 40% of a district’s tax revenues come from property taxes. With the major increases seen statewide already, raising property taxes to close the gap may not be a viable option for practical or political reasons.

Waiver of Membership

A new union boss deception tactic

State Superintendent Election

The State Superintendent of Public Instruction is elected every four years to administer the Indiana Department of Education. The Superintendent also serves in a number of related capacities, including chairing the State Board of Education and co-chairing the Education Roundtable.

Incumbent State Superintendent Dr. Suellen Reed (R) is running for an unprecedented fourth term. Her opponent is Susan Williams (D), Executive Director of the Indiana State Building Commission and a former Indianapolis City-County Council.

What makes this election more unusual is that Williams isn’t really running to serve in the office. At her candidate announcement this spring, Williams announced that if elected she would resign so that the next Governor could appoint her replacement. Her election campaign is all but non-existent.

Both Williams and Reed support making the State Superintendent an appointed, not an elected office.

NCLB Compliance Questioned

The U.S. Department of Education recently instructed the Indiana Department of Education to change the manner in which it determines if a school has achieved "adequate yearly progress" (AYP) based upon test scores. Those corporations that fail to achieve AYP are required to implement a number of changes to improve student achievement.

Indiana, unlike the other 49 states, chose to only include in their calculations those schools that receive additional Title I funding because of higher rates of poverty. Reportedly, this focused the calculation on elementary schools, thus reducing the number of students included in the calculations. Further, elementary grades tend to have more success in improving student learning than is the case with older students.

As a result, Indiana avoided having as many as one-third of the state’s school corporations labeled as "needing improvement." The U.S.D.O.E. has instructed the state to change their method of calculation to bring it into line with methods used and approved for the other 49 states. As of press time for this newsletter, the Indiana Department had not yet announced how they would respond to this major directive central to No Child Left Behind implementation.

IPS Gives NEA Union Boss A Forum

This summer, IPS teachers received a "You’re Invited" postcard mailing at their home addresses from the IPS administration for a "mandatory" meeting of all staff members to be held at the Indiana Convention Center. IPS even paid for buses to transport teachers to the meeting.

The special guest speaker was none other than Reg Weaver, President of the National Education Association in Washington, D.C. Being summoned by IPS administrators to a mandatory meeting to then be lectured to by the chief of the nation’s largest union did not sit well with many in attendance.

With more than half of IPS teachers refusing to join the union and its state and local affiliates, why is the Indianapolis Public Schools administration going out of its way to give the union bosses a forum to lecture teachers, most of whom have refused to join the union?

Core 40 Slated to Become Required Curriculum for Indiana High Schools

In a move designed to significantly increase the rigor of high school curriculums and raise graduation requirements statewide, the Indiana Education Roundtable has adopted the Core 40 curriculum as the standard or default for all Indiana high schools. The vote was in the form of a recommendation to the State Board of Education, which is slated to consider and adopt the proposal shortly.

Further, in a unanimous vote, the Roundtable recommended that the distribution of financial aid in the states colleges and universities be contingent upon a student completing the Core 40 curriculum in high school. This provision is designed to apply greater pressure for high schools to increase the rigor of their course offerings.

The proposals have been lead by the university community, frustrated by rising numbers of Indiana high school graduates unprepared to enter college. Remedial educational programs for college freshmen in English and Math have grown dramatically, including the costs associated.

The Class of 2009 will be the first impacted by the new Core 40 requirements.