Despite professing he was concerned over the perception that the House Democrat budget proposal puts a moratorium on charter schools, Rep. Ed Delaney of Indianapolis introduced an amendment today in the House Ways and Means Committee that is, well, another moratorium. 

In short, the amendment states: for a school district in which 10% of its buildings are charter schools, the local school board and recognized authority (mayor and universities in some cases) must approve any additional charter schools. 

The amendment passed 15-10 along a party-line vote.

The impact for the Indianapolis Public School (IPS) system is obvious, says Indiana Chamber education lobbyist Derek Redelman, “This would put an immediate halt to any future charter schools since IPS Superintendent Eugene White has stated repeatedly that he doesn’t want any more.”

For smaller counties with one charter school but few overall schools, it could have the same effect, depending on local sentiment on charter schools – something that Rep. Jeff Espich of Uniondale pointed out to the committee.

What’s more, the amendment puts Indiana’s potential to earn federal Race to the Top Fund dollars in jeopardy.
 
“This is just another example of House Democrats ignoring multiple warnings from President Obama’s secretary of education to allow charter schools to flourish.  They may think this backdoor attempt is clever, but really it’s very transparent,” Redelman asserts.

“This moratorium puts at risk more than $100 million in federal money for all public schools … we can’t afford that.”

The fundamental debate in trying to pass a new state budget is whether education funding should be for districts or students. Unfortunately, it’s not a new debate. Chamber education expert Derek Redelman can — and will — go in-depth on that topic, one that has been around throughout his 20-plus years in Indiana education policy.

Also unfortunate is that lawmakers are not taking advantage of the opportunity to right their biggest wrong of the regular session — the unemployment insurance tax increase that employers are telling us will simply force more layoffs. You can calculate for yourself how the largest business tax increase in state history will impact your organization and why it doesn’t solve the shortfall that is approaching $1 billion in loans from Washington.

It’s not big businesses vs. small businesses. It’s not employers vs. employees. It’s bad public policy — one that will require a true solution sooner rather than later.

It’s a well known fact that apples to oranges is far from the ideal comparison. Apparently, however, House Ways and Means Chairman Bill Crawford and some fellow Democratic members of his committee have yet to learn that helpful lesson.

When Indiana Chamber lobbyist Derek Redelman pointed out that many baseline education funding items simply don’t match up in the governor’s and House Democrats’ budget plans – which makes it virtually impossible to truly compare the merits of the proposals – he was the one criticized.

Crawford went so far as to take umbrage with Redelman, accusing him of insinuating that the House D’s cooked their numbers – which, by the way, was not what Redelman said (he even noted that he wasn’t blaming anyone but the numbers needed to be comparable). Geez …anyone sensitive?

An example of the lopsidedness of the dueling budget plans: one special education baseline number included the funding for preschools and the other didn’t, resulting in a $70 million difference over two years.

In the end, such facts didn’t matter. What did matter is Crawford’s trust in the Legislative Services Agency, which prepares all of the fiscal forecasts for state government. That’s fine, but the lovefest of remarks from Democrats was a bit much.

And yes, the numbers may be accurate (which Redelman didn’t really dispute), but they’re not comparable. At some juncture, legislators are going to need to view apples to apples. But hey, we’ve got plenty of time for such trivial details!

The Ways and Means Committee gets back to business Monday at 10 a.m., with budget amendments expected to be considered. Later that day, the full House convenes at 1:30 p.m.

The school scholarship tax credit program was revisited in testimony this afternoon before the House Ways and Means Committee.  Various groups – including the Indiana Chamber – are talking about the program’s value and encouraging legislators to include it in the final state budget. Governor Daniels advocated for the same in his recent budget proposal. Scholarship tax credits saw some promising developments throughout the regular session – only to be abandoned in the final few days as budget discussions collapsed.

A school scholarship tax credit program would help raise millions of dollars annually in private donations to open up school choices for parents by paying for the transfer fees from one school to another.

Parents want and need more educational options. Every year, thousands of families face a harsh reality that without the financial resources to pay private school tuition or public school transfer fees, they have few or no options in where and how their child receives an education.

And the importance of a quality education cannot be overstated. If the schooling children and teens receive is strong, then they will have the tools to succeed in college and their professional lives. Conversely, if their educational foundation is weak, they will find it hard to achieve beyond their high school graduation.

Any illusion (or perhaps delusion is more apt) of this special session going smoothly and ending quickly are pretty much history.
 
Not only don’t we have a behind-the-scenes deal from House Democrats and Republicans to put forth a state budget to the Senate in a timely manner, but day one of the special session showcased partisanship and maneuverings that will likely push the proceedings right up to the June 30 deadline.
 
The House Democrats introduced their own one-year budget via House Bill 1001, which is in line with their approach for the regular session and in contrast to the governor’s traditional two-year plan announced last week.
 
From virtually the start of the proceedings on Thursday, the two parties were at odds. Minority Leader Brian Bosma appeared blindsided that two additional measures – House Bill 1002 (aiding the Capital Improvement Board) and House Bill 1003 (involving public assistance) – were coming into play instead of focusing strictly on the budget. Time was also taken up by Republican concerns that gaming provisions would find their way into the bills.
 
As testimony surrounding House Bill 1001 begins today in the Ways and Means Committee (9 a.m.), amendments to the measure are already in the works. And that’s before the Senate gets its hands on it. So things are shaping up nicely to mirror the back and forth that led to no budget at all in April. Will someone blink this time? You would like to think so – especially since each day of the special session means taxpayer dollars are being spent for something that should have been done right the first time!
 
The full House reconvenes on Monday; when the Senate comes back is anyone’s guess as they are at the mercy of the House actually moving the bill. That leaves a little over two weeks to straighten out this entire budget mess.
 
Wonder what the over/under is on hitting June 30? On second thought … let’s not even think about it.

The special legislative session in the Senate Thursday lasted about 20 minutes. The 50-member Senate (with 46 present) convened, as required, passed a resolution to overturn the existing law that one chamber cannot be in recess for more than three consecutive days during a special session without the approval of the other chamber and said (in my words) "House, send us a budget bill."

In the words of Senate President Pro Tem David Long (R-Fort Wayne), "We don’t know when a bill will come over from the House. But I would keep your calendars locked up from the middle of next week until the end of June."

So much for a quick and easy process here (already evidenced by the antics of the past few weeks). There are two budget plans — the governor’s and the House Democrats — and a big difference on how schools are going to be funded. Let the drama begin.

Everyone on every side of the state budget debate is framing their remarks around a metaphoric “cliff” that the state may find itself standing at the edge of in two years. Three inter-related matters make up the primary elements of this fiscal cliff:

1) the availability of reserve accounts (surplus balances) come 2011
2) the extent that the federal American Recovery and Reinvestment Act (ARRA) of 2009 monies are used for ongoing programs or services for anything other than one-time expenditures
3) the rate at which the economy recovers and accuracy of the revenue projections/forecasts

Taking all of this into consideration, Gov. Daniels’ budget proposal is sound. The uncertainty of the economic recovery makes his line in the sand – maintaining no less than a $1 billion reserve balance – a prudent standard and an important step in avoiding a cliff. (See historic reserve balance data going back to 1976.)

The governor’s use of stimulus money only for things that would not add to the base operating budget is also essential to avoiding a freefall. His plan includes a significant amount to be directed to capital projects; although new construction adds to operating costs over time, the projects still fundamentally constitute one-time expenditures. And much is directed to immediately funding needed repair and rehabilitation of higher education facilities – a good way to apply one-time federal monies without adding costs down the road.

What the governor’s plan is being criticized for is building state K-12 education funding around the federal stimulus money specifically designated for schools with a high population of disadvantaged students (Title 1 monies). The proposed school funding formula results in a 2% overall increase. But critics point out that it is only 2% if you count the extra Title 1 – money that would flow to mostly urban schools, regardless of the level of state support.  It is suggested that this funding approach actually creates a cliff for those schools by making them dependent on that additional money.

This debate requires consideration of the big picture. First, these schools generally have declining enrollments, so their funding can’t be expected to rise steadily. By operation, the Title 1 money goes to schools that have more special needs, so the money will go to cover those needs. Even though state revenues are plummeting, the state portion of the school funding is still increasing, albeit by a very modest 0.5%. It is worth noting that most states are having to reduce education spending. So a 2% increase (0.5% state money; 1.5% federal stimulus money) is reasonable in these tough times. The final item below plays into this discussion too.

According to the projections, state revenues are expected reach a level by 2012 that will be sufficient to bridge the funding gap that will exist when the Title 1 money goes away that year. (See links to May forecast and Gov. Daniels’ budget presentation.)

Unfortunately, yes, schools are probably going to have to make do with smaller increases than anyone prefers.  Only “probably” because of another component of the governor’s budget proposal: if the economy recovers faster than the revenue forecasters projected and the revenues end up exceeding the projections, 50 cents of every unanticipated $1 will go directly to education funding; the other 50 cents goes to build back up the reserve balances.

While the governor’s plan may not be perfect, it is thoughtful and fair, and is well designed to prevent the state from heading toward – or off of - that financial cliff.