Published Online: December 18, 2009

Ind. Board of Ed. to Give Schools Budget Cut Options

The Indiana Board of Education plans to give school districts a list of options on how they can collectively cut at least $300 million from state spending without laying off teachers, including the possibility of wage freezes.

The board met Thursday to advise Gov. Mitch Daniels on his decision to cut at least $300 million in state spending on schools over the next 18 months of the two-year budget cycle. Daniels says the reductions, along with previously announced cuts, are needed to ensure Indiana does not have a deficit when the budget ends in July 2011.

The board plans to prioritize a list of options presented by the Indiana Department of Education and have schools consider them in making spending cuts. The board also recommended the cuts begin in January, and that Daniels give a specific figure for reductions in the upcoming calendar year and not go beyond that.

Superintendent of Public Instruction Tony Bennett said a wage freeze for teachers and other school officials likely will be among the options listed.

"We should consider any measure to provide a solution to this very serious problem that keeps Indiana teachers in the classroom," Bennett said, "and if that includes teachers and administrators coming together and freezing salaries for all school corporation employees, then that's what I expect they should do."

Any wage freeze or salary reductions for teachers would have to be negotiated by school corporations, or districts, and their teachers.

Among other options on the preliminary list:

• Consider having school districts join state employee health plans that might cost less.

• Suspend hiring.

• Reduce the number of administrators.

• Renegotiate purchase agreements to buy in bulk.

• Evaluate the benefits of consolidating districts.

• Allow transportation and building funds paid through property taxes to be transferred to classroom operating funds.

• Allow school districts to raise local income taxes.

Schools already are expected to lose tens of millions of dollars because of caps on property tax bills, and some have made cuts because of them. So Daniels' announced cuts in state spending will be an extra blow, but ones he said are necessary to prevent a deficit.

State tax collections for the first five months of the fiscal year already are $475 million below a May forecast, which lawmakers used in crafting the current budget. A new forecast issued on Tuesday predicted the state will take in $1.8 billion less through July 2011 than previously projected.

Some education officials told the board that the monthly cuts should begin in April so school officials have more time to decide on how to make cuts. But the board did not buy that.

"The emergency of the situation requires an immediate start," said board member Neil Pickett.

Chuck Little, executive director of the Indiana Urban Schools Association, said the state should not dictate how the cuts are to be made.

"I urge you to make recommendations that do not tie the hands of locals," he said.

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