Here's how Gov. Holcomb's plan to boost teacher pay could widen pay gap in Indiana

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https://www.jconline.com/story/news/politics/2019/01/27/indiana-teacher-pay-how-holcombs-plan-could-widen-pay-gap/2660717002/

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A plan to save public school districts money — and hopefully get those dollars into the pockets of overworked, underpaid teachers — was supposed to save schools millions.

In some cases, like large and suburban districts in the Indianapolis metro area, it will. And teachers in those districts are poised to see raises of $1,000 or more. In some small and rural districts, though, the savings will be paltry and teachers may see little benefit.

The plan, which Gov. Eric Holcomb unveiled this month during his State of the State address, would take $150 million from Indiana's budget reserves and pay off an unfunded portion of the state's retirement fund for teachers, dropping the amount that school districts are required to pay toward the plan. Holcomb said he wants those savings to go toward raising teachers' salaries — a top issue at the Statehouse this year.

Some districts, like Speedway Schools, have already said they'll do just that.

"If the governor's proposal becomes law, we will direct the savings into teacher salaries," Superintendent Ken Hull said. "We believe that we have exceptional teachers who deserve the best compensation possible."

 

Others, though, aren't moving as fast. In a state with robust school choice and where money follows students, some small school districts could see their savings erased by enrollment losses.

An analysis from the Indiana Public Retirement System, which manages the state's public pension programs, estimated savings for public school districts based on their eligible wages paid in fiscal year 2018. Contributions to the pension fund are paid as a percentage of wages, and the governor's plan would drop school districts' required contribution by 2 percent.

 

A 2 percent reduction in 2018 would have saved schools nearly $63 million. Eligible wages would have to grow by more than 11 percent from the 2018 fiscal year to hit the $70 million savings target. The governor's office said that figure was an estimate, based on expected wage growth and other factors.

Should the plan be adopted, the state's largest districts stand to save millions in pension payments.

Based on the analysis of 2018 wages, Indianapolis Public Schools could save more than $2 million a year. Lawrence, Perry and Wayne townships would save more than $1 million. Hamilton Southeastern Schools would save nearly $1.5 million.

For tiny Medora Community Schools in rural Jackson County, the loss of just two students would erase the $12,000 that district is projected to save. An enrollment drop of two students — or even 10 students — spread across all 13 grade levels isn't enough to cut staff. So fixed costs will stay the same, but state money will drop, explained Roger Bane, superintendent at Medora.

"The money following the student like it is right now is hurting all the small schools," he said.

That will remain true, he said, as long as the state has open enrollment between districts.

This fall, the district lost 85 students through transfers to other public school districts, to public charter schools or through the state's private school voucher program. Most of those were to a neighboring public school district, Brownstown Central Schools.

The total amount schools would save isn't the only disparity, either. The amount school districts save per teacher also varies widely.

Some districts, like South Henry Schools, are projected to save as little as $500 a year per teacher. The district, in a rural area between Indianapolis and Richmond, has fewer than 60 teachers and will benefit far less than almost every other district in the state.

East Porter Schools, serving 2,500 students in northwest Indiana, is on the low end, too. It will get back a little less than $650 a year for each of its 160 teachers.

Some districts in Marion and surrounding counties will bank more than $1,000 per teacher. Wayne Township is looking at somewhere around $1,100 per teacher, as are Perry, Washington, Pike and Warren townships, Speedway, Hamilton Southeastern, Carmel Clay, Plainfield and Westfield-Washington schools.

While 25 districts stand to save around $1,000 per teacher, more than 60 districts look to get $750 or less to theoretically put toward their teachers' paychecks. 

And this figure matters, especially when schools are being encouraged to put this money back into teachers' pockets. Should they do so, the suburban districts that already tend to pay their teachers more will have greater capacity to raise salaries, potentially widening the pay gap between rich and poor districts. 

"It will absolutely widen the gap," said Bane, whose district in Medora is projected to save about $600 for each of its 20 teachers. 

The disparity in savings per teacher is largely driven by two factors: the age of a district's workforce and what the district is already paying its teachers. Teachers who were hired before 1996 aren't included in the pension fund at issue (they're in a different pension fund), and therefore districts won't save any money on those teachers.

And because the savings are a percentage of eligible wages, districts that are already paying their teachers higher wages will save more.

Many of the districts that stand to benefit the most from the plan have passed property tax increases in their communities in the last several years, enabling them to boost teacher pay ahead of a concerted effort by the state to do so.

One example is Brown County Schools, a small, rural district with declining enrollment. They should be on the lower end of the scale, but projections show the district would save around $1,000 per teacher, per year.

Superintendent Laura Hammack said the district has been concerned about teacher pay for years and took a tax referendum to voters in May 2016. Pitched as a way to raise salaries, the referendum passed and teachers have received a raise each of the last three years.

But, she said, they want to do more and the governor's proposal could help them do just that.

"We're really excited about this line of thinking," Hammack said. "We genuinely think that this will translate into more dollars for teachers."

Not every school district can pass a referendum, though, to help close the gap between "haves" and "have nots."

Chris Lagoni, executive director of the Indiana Small and Rural Schools Association, said schools are largely grateful for the governor's proposal and really any effort to get them more funding or cut expenses. 

All school districts want to pay their teachers better, he said, but the state's funding formula hurts schools with declining enrollment and many small, rural districts are at a disadvantage. And some of his member districts just can't pass a referendum.

"There are two groups," he said. "You're either increasing enrollment or declining enrollment."

While all school districts will save under the proposal, it won't do anything to address the disparity between districts. There seems to be little agreement on how to fix that problem, though. Most lawmakers argue that teacher pay is inherently a local decision, so the state can encourage districts to raise pay but won't mandate it.

Rep. Terry Goodin, a Democrat from Austin and superintendent of Crothersville Schools, said lawmakers should just increase school funding instead of playing what he calls a "shell game."

"If you really want to give a pay raise, stop the hocus pocus," he said. "Just give a pay raise. Put the money in (the budget) to give a raise." 

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Smaller schools will soon be forced to consolidate or close their doors.  The enrollment numbers will soon reach a point where it is economically unfeasible for them to stay open.