Lawmakers eye financial incentives for schools to merge

Lawmakers eye financial incentives for schools to merge

(Ind.) Legislators in Indiana have proposed financial incentives for schools to consolidate as part of a recent push to cut administrative costs for small, rural districts.

Lawmakers included a one-time $500 per-pupil bonus for schools that consolidate in the state budget plan, and members of the House added the same incentive as a provision to a Senate bill earlier this month.

The proposed funding is just the latest attempt by the Legislature to address the findings of a report released in 2014 by Ball State University’s Center for Business and Economic Research, which found that many districts in Indiana were facing both rising costs and declining enrollment.

Specifically, researchers found that small school districts with fewer than 2,000 children are less efficient in educating students than larger ones; implying districts can boost efficiency by merging with other surrounding districts. Of the almost 300 school districts in Indiana in 2012, more than half had enrollment of fewer than 2,000 students. And that half saw enrollment decline at least 100 pupils between 2006 and 2012, indicating it was likely that they would continue to shrink.

“The long-term fiscal viability of more than half of Indiana’s school corporations argues for mergers and consolidation as a tool to reduce overhead and management expenses,” authors of the study wrote. “The goal of these consolidations should be to improve and more effectively fund student instruction.”

Lawmakers and education officials have noted that declining student enrollment has most negatively impacted rural districts throughout the state, especially as Indiana has shifted toward a pay-per-pupil school funding model.

Five years ago, facing declining admission and a reduction in state funds, both New Harmony Town and Township Schools chose to consolidate under the Metropolitan School District of North Posey County, located almost 170 miles southwest of Indianapolis.

While district leaders at the time had said they were reluctant to merge with a larger district, student enrollment had plummeted to 137 and state funding fell below $1 million.

But data show that even larger districts in the state are struggling with declines in enrollment. Between 2006 and 2012, more than half of the 44 school districts with between 2,000 and 3,000 students saw the number of children dwindle, according to the Ball State University report. Six saw more than 200 students leave in that time.

Sen. Jeff Raatz, R-Centerville, author of the Senate bill amended in the House, told local reporters that he wasn’t sure yet whether or not he would approve the incentive amendment, noting that his bill originally was meant to simply clear up how districts with debt can consolidate.

Regardless, he explained, his bill does not require small rural schools to consolidate–but said it should be considered by education officials and constituents as an option for cash-strapped sites.

“I know there are school districts out there that are losing size naturally and of course that puts a burden on the cash flow and so it’s simply something for school districts to take a look at,” Raatz told the Evansville Courier & Press. “If they decide it’s a wise thing to do and can get their constituents to agree, then they can consolidate.”

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