Explanation of costs

Stand up for IPS

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To download a copy of the IPS superintendent's June 19 testimony to the Senate committe, and a hand out on the complexity index, navigate to the "News" section.

THE FACTS about the dollars following the child

The "dollars follow the child" formula is based on the false assumption that it costs the same amount to educate every child.

Under Indiana's school funding formula, each school district receives a flat amount per pupil, plus supplemental categorical funding for students who need additional services, such as special education, alternative education, or limited English proficiency (LEP) classes.

This per-pupil amount represents the average cost of providing basic educational services to each child in the school district. However, the actual cost of educating certain students is greater than the average, and the more of these students enrolled in a school district, the more it spends educating those students.

For example, the costs of providing special education and LEP far exceed the categorical funding provided by the state, which means that school districts with larger percentages of these populations must use money intended for other students in order to pay for these federally mandated services.

In 2008-2009, IPS spent $28.1 million extra to cover federally-mandated special education services because it didn't receive enough state or federal special education dollars to cover its costs. IPS spent $3,223 extra for each of the 8,716 special education students enrolled in IPS, which means it had $1,108 less per pupil to spend on each of the approximately 25,000 IPS students who were NOT enrolled in special education.

In 2008-09, IPS spent approximately $6 million extra to cover federally-mandated LEP services because it didn't receive enough state LEP funding to cover its costs. IPS spent $1,650 extra for each of the 3,623 LEP students enrolled in IPS, which means it had $200 less per pupil to spend on each of the 30,000 IPS students who were NOT enrolled in LEP.

Because it doesn't cost the same amount to educate every child, the reghoster is critical to declining enrollment districts such as IPS when the children who are leaving the district are less costly to educate than the children who remain behind.

In 2008-09, 20.5% of the children enrolled in IPS needed special education services. The average special education percentage in the IPS-area charter schools was 11.3%, and only one charter school – Indianapolis Metropolitan High School – had a higher percentage than IPS.

In 2008-09, 11% of IPS students needed LEP services. In 13 of the 18 IPS-area charter schools, the LEP percentage was 1% or less, and only one charter school – Christel House - had a higher percentage than IPS.

IPS-area charter schools enroll greater numbers of elementary school students, who are generally less expensive to educate than high school students. In 2008-2009, there were four times as many 1st graders enrolled in IPS-area charter schools as there were 12th graders, and twice as many second graders as there were high school juniors.

For an expanded version of this information in handout form, click here.

See more on this topic below.

Why does it cost more to educate students in IPS and other urban school districts?

IPS educates more children in extreme poverty than the entire enrollment of most other school districts in the state. In 2008-2009, 75% of IPS students qualified for free lunch and 7% qualified for reduced price lunch. When children come from extreme poverty, they need additional social services and additional tutoring to succeed academically – and that costs more.

The number of limited-English-speaking students served by IPS has tripled since 2000. One out of every nine students in IPS is still learning to speak English. Statewide, one of every 12 limited-English-speaking children who live in Indiana attends an IPS school.

It costs an additional $1,800 per year to serve each limited-English-speaking student. That totals $6.5 million a year for IPS. The federal government does not pay those costs. The State of Indiana pays approximately $100 per child.

Unfunded mandates – The state and federal governments continue to require additional services or reporting without adding funding to school budgets to make that happen. Just recently, additional reporting duties for school nurses and additional goals for school counselors have been mandated with no additional funding.

Because of requirements of the No Child Left Behind Act, IPS is required to hire consultants for curriculum mapping and school improvement. The consultants’ work will contribute to improved instruction, but it makes IPS’ number of administrators higher than suburban districts which are not required to hire these consultants.

Desegregation – Even though federal court-ordered desegregation is being gradually phased out, IPS’ budget still includes $22 million for students who are educated in township school districts. That $22 million is passed on to the surrounding school districts. IPS estimates that if all students still subject to the desegregation order were in IPS, it would cost $6 million to educate them. The district has room for the students; the additional costs would mostly pay for teachers.

Security – IPS’ annual budget to operate a school police force is $5 million. It’s a necessary expense to make schools safe for students and staff, but districts in suburban areas don’t have such high security costs.

Special education – IPS provides a full spectrum of special education services, and special education students are much more expensive to educate. Private schools do not have the same special education expenses.

Special education services for private school students – IPS provides some special education and speech therapy services for students who attend private schools. Some of those costs are reimbursed, but generally not the full amount.

Children who are transient or homeless – 10 percent of IPS students do not live with their families. That’s approximately 4,000 students who live in foster care, who are incarcerated at the juvenile detention facility or who are homeless. These children require extra tutoring and social services.

Old buildings – IPS is working to modernize its schools and make them more energy efficient. However, it’s generally more expensive to maintain old buildings.

Transportation – IPS offers more magnet and option programs than any school district in Indiana. That’s a good thing, but making these options available to everyone who wishes to participate increases transportation costs.

Alternative programs – IPS has initiated a number of alternative programs to ensure that students who are disruptive are removed from regular classrooms, but they still have the opportunity to stay in school and continue to learn. These programs require more security and sometimes have smaller class sizes to give students the intensive instruction they need. It costs more to do that, but in the long run, it saves taxpayers’ money if these students remain in school and have an opportunity to graduate.