Indiana Senate budget leader says he wants to consider easing proposed school funding shifts

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INDIANAPOLIS — The Indiana Senate's top budget writer said Thursday he wants to consider ways of possibly easing proposed school funding shifts that could lead to cuts for many urban and rural districts with shrinking enrollments.

The Senate Appropriations Committee held its first hearing Thursday on the two-year state spending plan approved last week by House Republicans. That $31 billion proposal includes 2.3 percent increases in school funding in both years, but would shift tens of millions of dollars to growing suburban districts.

Committee Chairman Luke Kenley, R-Noblesville, said he agrees with what he calls the "enormous commitment" the House budget made toward school funding and that it was important for lawmakers to figure out the most equitable way possible for distributing that money.

House Republican leaders made a top priority of closing the gap in per-child funding between growing and shrinking school districts they say had reached nearly $3,000. The House plan drops that to an estimated $1,600 for the 2017 budget year.

Democrats maintain the plan would cause "devastating" funding cuts to more than a third of the state's nearly 300 school districts, many of which are in the poorest communities.

Kenley said he wanted to look at suggestions for a longer transition in the school funding formula changes.

With the overall amount of money available, "there is no reason why we shouldn't be able to make all schools feel like they benefited from the formula," he said.

The Senate committee started its budget hearings on the day that a new tax collections report showed that state revenue was short of projections for the sixth time in the first eight months of the current fiscal year. The State Budget Agency said tax collections are about $91 million, or 1 percent, less than the most recent revenue forecast.

Republican Gov. Mike Pence has pointed to those revenue shortfalls in urging legislators to be cautious in preparing the state budget.

Kenley said he shared those concerns until an updated revenue forecast was presented in April, just weeks before the deadline for the House and Senate to agree on a spending plan.

"I'm concerned that when April shows up that if we had to make a lot of cuts at that time, it could be a lot of pressure on everybody," Kenley said.

Sen. Karen Tallian of Portage, the top Democrat on the Appropriations Committee, said she worried that the school funding changes proposed by the House come at the expense of districts dealing with the most children in poverty.

Tallian said she would encourage ways to phase in distribution changes since some school districts haven't recovered funding cuts made under then-Gov. Mitch Daniels during the recession.

The House budget includes $40 million in new grants for charter schools to provide funding for building work and transportation that traditional school districts receive through local property taxes.

Such a proposal to boost charter schools doesn't make sense when school districts have lost $200 million in transportation funding during recent years because of statewide property tax caps, Tallian said.

"Now, the charter schools want some, but we haven't been able to do it for the regular public schools yet," she said.

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