Money for teacher pay based on state decisions, debt, tax caps

Franklin schools had tried to get creative to set aside funding to pay teachers more.

A school had a part-time principal. A partnership with Johnson Memorial Health saved money on nursing costs. The city of Franklin paid for Chromebooks.

But still, year after year, their teachers’ pay was sliding as compared to other districts in the county and across the state.

Teachers were leaving Franklin schools for jobs nearby that paid $21,000 more, and the district, strapped with a high debt payment for the new high school that was set up before the state changed the school funding system, was out of options to get teachers more money.

[sc:text-divider text-divider-title=”Story continues below gallery” ]

Click here to purchase photos from this gallery

Across the county and state, the complex funding formula that determines how much money schools get from the state, coupled with the impact of property tax caps and the level of debt at each district results in a wide range of teacher salaries.

Greenwood schools, for example, saw five years ago that they needed to pay their teachers more. During that time, the district paid starting teachers $32,633, thousands of dollars less than Center Grove, Clark-Pleasant and Franklin schools which paid starting teachers more than $35,000. In order to keep teachers from leaving the district for higher pay, Superintendent Kent DeKoninck had to think of ways to close that gap without raising taxes.

Greenwood schools were able to give those raises by having the smallest district in terms of land area of any Johnson County district, meaning they weren’t hit as hard by property tax caps. They also accept 150 to 175 students from other school districts each year, meaning they get more tuition money from the state, which provides funding for each student. The district also changed its policy regarding health insurance so teachers could choose how much they wanted to pay, DeKoninck said.

Franklin schools, however, decided a tax hike was the only remaining option to raise teacher pay, and on May 7, voters in the Franklin school district agreed to a property tax hike to pay, in part, for pay raises for teachers.

The plan is for starting teachers to be paid $40,000 in 2020, up from the current $37,500. By comparison, Greenwood schools have raised starting teacher salaries by more than $7,000 over the course of five years, and they did so without a referendum.

During the 2014-15 school year, starting teacher salaries at Greenwood schools were $32,633. This year, teachers at the district made at least $39,919, second in the county only to Clark-Pleasant’s $40,000.

“With tax caps throughout the state, on property tax, homeowners pay one percent (and) businesses pay a higher percentage. School districts with lots of residential housing end up being in tougher positions because they’re capped,” DeKoninck said.

“We only lost $46,000 in property taxes last year. Franklin and Clark-Pleasant (schools) are losing millions each year. Their property tax cap loss is much greater each year and it impacts teacher salaries and capital funds like transportation.”

Property tax caps reduce the amount of money that school districts collect. Beginning with 2010 tax bills, the state of Indiana capped property tax rates at one percent for homestead properties, two percent for residential properties, agricultural land and long-term care facilities and three percent for nonresidential properties and personal property, according to the Indiana Department of Local Government Finance.

These tax caps affect Franklin schools, which cover 112 square miles, much more than they do Greenwood schools, which cover eight square miles and has less property to tax.

From 2010 to 2018, Franklin schools lost $24 million in revenue due to the tax caps.

Along with the property advantage, Greenwood schools also accept over 100 students from outside the district each year. About 50 to 100 students from outside the geographical boundaries of the school district transfer in each year by the May 1 deadline, but it’s common for more students to come to Greenwood schools after the deadline, totaling 150 to 175 new students from outside the area annually, DeKoninck said.

“Enrollment has increased over the years and state tuition support has increased. Those factors play in our favor. If enrollment were to decrease or state funding were to decrease we’d have to determine if salaries are not raised as much or do we not add or replace positions?,” DeKoninck said.

“Every year we make those types of financial decisions. We don’t want to add too many teachers in one year. We try not to add too many teachers each year and make sure we’re not overstaffing.”

Greenwood schools have about 4,000 students, about 600 of whom are from outside the district’s boundaries, he said.

“We don’t do recruiting,” DeKoninck said. “We don’t put billboards up. Each year I put it on the website that we’re taking out-of-district applicants and tweet it out. It’s really by word of mouth that people choose to come here, and the location helps us, (along with) the number of districts around us that are close.”

The state uses a complex funding formula based on growth and demographics to determine how much in state funding each school district gets per child. Franklin schools gets $200 per student less than the state average in state funding.

The district’s health care plan also factors into increasing salaries. Before 2014, Greenwood schools covered 90 percent of the cost of health care premiums for its staff. Now, the district pays a flat amount per teacher, $16,000 for a family plan and $7,000 for a single plan, meaning it has more money available for teacher salaries. If teachers want a premium plan, they can choose to do so and have more deducted from their salaries, he said.

“They (can) choose an insurance plan based on what’s appropriate for them,” DeKoninck said. “We now pay a flat amount towards an insurance plan and any increases become the responsibility of the employee if they want better coverage. We try and keep the costs low.”

With that extra money spared by the district, schools can further increase teacher salary, he said.