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Indianapolis Lays Off Some 535 To Counter Federal Funds Loss

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The Indianapolis Public Schools, in an effort to avert a $14-million deficit projected for 1986, has sent layoff notices to 395 teachers and 140 support employees, and plans to move 40 administrators out of their jobs and into the classroom.

The layoffs, which represent a reduction in force of almost 10 percent in Indiana's largest school district, will take effect at the start of the 1985-86 school year, pending a final vote of the school board scheduled for April 30, according to Carolyn Day, a spokesman for the 53,000-student district.

And although it is not uncommon for school districts to send layoff notices to employees in the spring in order to meet state and local deadlines that prohibit layoffs after a particular date, Ms. Day said the district's decision represents an accurate assessment of how many staff cutbacks are required to balance the district's $170-million budget.

The Indianapolis Education Association, an affiliate of the National Education Association that counts as members more than 2,000 of the district's 3,086 teachers, has termed the action "inappropriate" and has called on the district to seek alternatives to balance its budget.

'Tight Time' for Districts

The financial situation that precipiated the layoffs is in part the result of the phasing-out of $10 million annually in state and federal funds provided for the district's 1981 court-ordered desegregation plan.

Indianapolis's troubles are likely to be replayed nationwide in districts that have invested considerable resources in desegregation plans, are seeing the federal funds to pay for them phased out, and lack state support for such efforts, according to Samuel B. Husk, executive director of the Council of the Great City Schools.

"Every school district which has had to pay for desegregation out of its own pocket and out of the federal grants is probably going to go through a tight time over the next 6 to 12 months," Mr. Husk said.

'Soft Money'

The district's $14-million shortfall came about as a result of its use of what Ms. Day termed "soft money"--funds that were available for a short period of time under "unusual circumstances"--to pay for recurring expenses.

First, the district was told by the state tax board in 1983 that it had to spend $6 million that had been accumulating for several years in a building fund, Ms. Day said. The school system got an additional $10.5 million for this year as a result of a one-time budget-balancing maneuver.

It is the money the district received to carry out its court-ordered desegregation plan--some $9 million in state aid and $1 million in federal grants given annually from 1981 to the present--that represents the largest loss in revenue, school officials say. The federal government's desegregation aid was consolidated into a block grant in 1981, and Indiana has eliminated its aid program.

The district used those funds for instructional improvement as well as for transportation. For example, teachers were hired to reduce class sizes and teacher loads, according to Ms. Day, and funds were spent to bring the district into compliance with Project Prime Time, a state program designed to reduce student-teacher ratios in the early grades.

As a result, students' test scores have gone up and achievement levels are rising, Ms. Day said. But she predicted that the loss of the "soft money" spent on these efforts could translate into a decline in achievement for the district's students.

"We've made so much progress in the last three years in terms of achievement scores, so these things are tough," said James A. Adams, superintendent of schools. "Any time you have to increase class sizes, you have a negative impact on the system."

Cutbacks Required

Like Indianapolis, other districts that instituted programs required under desegregation orders will now have to cut back as they begin to absorb more of those costs themselves, according to Mr. Husk.

"What's happening is that emergency school-aid money is finally bleeding out and the districts are having to absorb those costs themselves," he said.

Districts might be able to avoid such belt-tightening, Mr. Husk said, if states contribute sufficient resources to help them replace the lost resources. The Milwaukee and St. Louis districts, for example, are seeking state funds through the courts.

The other way school systems might be able to avoid cutting staff members and programs, Mr. Husk said, is if the Congress, as expected, rejects President Reagan's proposed elimination of $75 million in federal funds for magnet schools.

Tax Referendum

In addition to serving layoff notices, the Indianapolis board of education plans to ask local residents to approve a referendum in December that would increase property taxes.

Mr. Adams said he is hopeful that passage of such a measure would enable the district to rehire some of the laid-off teachers. Ninety percent of those who will be laid off, he noted, were hired in the last three years as part of the district's commitment to school-improvement programs.

Meanwhile, the layoffs will enable the system to balance its budget and will provide an additional $900,000 for unemployment compensation, for which all laid-off employees are eligible, according to Ms. Day.

But the iea, which has voiced strong opposition to the district's layoff plans, has urged district officials to pursue alternate budget-cutting options before laying off the teachers.

Thomas J. Feeney, president of the iea, said the union has recommended that the district appeal to the state legislature to increase its appropriation. It has also called on the district to avoid laying off teachers until the property-tax referendum results are in, and, as a final measure, to appeal to the state tax-control board to transfer to its general-fund account money that is earmarked for operating expenses.

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