School & District Management

New Ind. Governor Takes Hard Fiscal Line

By John Gehring — February 15, 2005 3 min read

A decision by Indiana Gov. Mitch Daniels to withhold millions of dollars in funding from school districts in an effort to balance the state budget has some district leaders and lawmakers accusing his recently inaugurated administration of bucking long-standing tradition.

While there is typically a shortfall between what Indiana districts expect to receive in state aid and the amount of money initially set aside by the legislature, the state usually makes up that gap. The shortfall this year is $27 million out of $3.7 billion in total school aid.

But Mr. Daniels has pointed to a $600 million deficit in the state’s $11 billion budget for fiscal 2005 as reason to be more prudent about spending decisions and said districts are not entitled to that money.

Indiana Gov. Mitch Daniels chats with Rep. Ralph Ayres following a speech on Jan. 19.

The first-year Republican governor—a former director of the White House Office of Management and Budget whom President Bush nicknamed “The Blade” for his budget-trimming skills—has wasted little time in taking a more critical look at how money is being spent in the Hoosier State.

The governor already has created, by executive order, a Department of Government Efficiency and Financial Planning to oversee how tax dollars are distributed, and he has vowed to rein in what he sees as bloated school construction projects. During his State of the State Address last month, he called for a 120-day moratorium on issuing school construction bonds because of concerns about expensive school facilities.

Gov. Daniels has not only irked some Democratic leaders in the state, but also fiscal conservatives on the national scene, who went after the governor for proposing a one-year, 1 percent boost in state income taxes paid by individuals earning over $100,000. The plan is still before the state legislature.

In a Jan. 31 editorial, The Wall Street Journal called the proposal “a pocketbook raid.”

Meanwhile, the decision to hold back funding that districts had expected to receive has some school leaders worried that they may have to make more cuts to already austere budgets.

Cuts Ahead?

The 40,000-student Indianapolis public schools expect to lose more than $2 million in state money if the governor’s decision stands. As a result, local officials say the district may have to lay off teachers and other staff members.

“It’s frustrating, and it makes it difficult to plan,” said Mary Louise Bewley, a spokeswoman for the district. “We try and recruit teachers to come to our district, but when there is talk of losing staff, folks don’t want to deal with that uncertainty.”

The 16,000-student Lawrence Township schools would be out $424,000 in the spring and another $399,000 in the fall if the governor does not change course, according to district Superintendent Michael Copper. At least 14 teachers could lose their jobs by the fall, he said.

“The dilemma for us is this game has been changed, and we are in the middle of it,” Mr. Copper added. “It’s difficult for financially strapped districts. It’s a major dilemma for us.”

Gov. Daniels’ office did not respond to requests for comment.

Adding to the frustration of some lawmakers is a $20 million reserve in the state department of education that former Gov. Joe Kernan, a Democrat, and state education leaders created in 2004 to make up just such a budget shortfall.

‘Whole New Day’

“I’m very concerned about the blasé way the governor made this determination,” said Sen. Vi Simpson, a Democrat. “When we budget for particular appropriations, that is a promise we make to our schools, and the governor seems not to have any regard for that promise.

“I have been here 20 years,” she said, “and I can’t remember ever withholding this payment. … It seems very strange to me. There are funds set aside in the department of education.”

Mary Tiede Wilhelmus, the director of communications for the Indiana Department of Education, said that while $20 million was put into a “reverting account” that could be directed to general budget funds, the agreement to use the money in case of a shortfall was made under previous state leadership.

“It’s a whole new day,” she said. “It’s a new administration.”

Ms. Wilhelmus noted that the legislative session is ongoing, and that lawmakers could ultimately come up with the money. The Indiana legislature is currently under Republican control in both chambers, though it’s unclear how leading GOP lawmakers feel about the governor’s stand on the use of the reserve fund.

Until then, she said, districts are left waiting.

“It’s going to hurt locals,” she said. “They are very concerned, as well they should be.”

Related Tags:

A version of this article appeared in the February 16, 2005 edition of Education Week as New Ind. Governor Takes Hard Fiscal Line

Events

Student Well-Being Webinar Boosting Teacher and Student Motivation During the Pandemic: What It Takes
Join Alyson Klein and her expert guests for practical tips and discussion on how to keep students and teachers motivated as the pandemic drags on.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
A Holistic Approach to Social-Emotional Learning
Register to learn about the components and benefits of holistically implemented SEL.
Content provided by Committee for Children
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Student Well-Being Webinar
How Principals Can Support Student Well-Being During COVID
Join this webinar for tips on how to support and prioritize student health and well-being during COVID.
Content provided by Unruly Studios

EdWeek Top School Jobs

Washington Data Processing Representative - (WAVA)
Tacoma, Washington, United States
K12 Inc.
Software Engineer
Portland, OR, US
Northwest Evaluation Association
Proposal Writer
Portland, OR, US
Northwest Evaluation Association
CCLC Program Site Director
Thornton, CO, US
Adams 12 Five Star Schools

Read Next

School & District Management Opinion New Resource Tracks School System Reopening
The Return to Learn Tracker identifies the current instructional model of all regular public school districts with three or more schools.
5 min read
Image shows a multi-tailed arrow hitting the bullseye of a target.
DigitalVision Vectors/Getty
School & District Management San Francisco School Board Pauses Renaming 44 Schools, Promises to Consult Historians
The renaming of 44 schools in the San Francisco Unified School District is apparently being put on hold after intense blowback.
Greg Keraghosian
1 min read
A pedestrian walks below a sign for Dianne Feinstein Elementary School in San Francisco, on Dec. 17, 2020. The San Francisco Unified School District put the renaming of 44 schools, including Dianne Feinstein Elementary School, on hold after local and national blowback.
A pedestrian walks below a sign for Dianne Feinstein Elementary School in San Francisco, on Dec. 17, 2020. The San Francisco Unified School District put the renaming of 44 schools, including Dianne Feinstein Elementary School, on hold after local and national blowback.<br/><br/>
Jeff Chiu/AP
School & District Management Superintendent Who Led During COVID-19 School Shutdowns Gets Top Honors
Michelle Reid of Washington state's Northshore district, one of the very first to close schools last March, was named National Superintendent of the Year.
3 min read
Michelle Reid, superintendent of the Northshore district in Washington
Michelle Reid, the superintendent of the Northshore district in Washington, was named National Superintendent of the Year.
courtesy of AASA, the School Superintendents Association
School & District Management Is Lunchtime the 'Weak Link' in School Reopening Plans?
It's risky when students are inside and unmasked, experts say. Here are five ways to mitigate that risk and make in-school meals safer.
11 min read
Elementary students in Brownsville, Texas, eat a socially distanced lunch in the school cafeteria. Experts say there are ways to mitigate the risk of contracting COVID-19 even when kids take their masks off to eat.
Elementary students in Brownsville, Texas, eat a socially distanced lunch in the school cafeteria. Experts say there are ways to mitigate the risk of contracting COVID-19 when kids take their masks off to eat.
Denise Cathey/The Brownsville Herald via AP