Over the past year, we have endured the worst economic climate in recent history. Unfortunately, state revenue continues to decline so Gov. Mitch Daniels has taken several extraordinary measures to keep Indiana above water. The governor has ordered 20 percent cuts by all government agencies, a 6 percent cut to higher education and as a last resort, a cut 3 percent from the K-12 education budget.
These cuts are forcing school corporations to make tough decisions with their budgets while striving to avoid laying off teachers. In order to assist schools during these tough times, I support giving them the opportunity to have flexibility in their budgets to move funds around to fill the gaps. Both the House and Senate have proposals to give schools flexibility in funding.
House Republicans offered an alternative plan to House Bill 1367. Under our plan, schools would have been allowed to transfer money into their general operating fund from eight other school funds (these transfers are currently prohibited under law). A few of those transferable funds would have been transportation, capital projects and technology. Each school would be allowed to transfer up to the amount needed to fully offset the loss of revenue from the state.
At a local level, each school could make their own decisions on how to utilize this flexibility based on their own unique needs and the amount of money they have available in their various funds. Of course, all of this flexibility would have been in addition to the flexibility that schools already have in utilizing their general fund balances and rainy day funds.
Our plan included one stipulation. School corporations would have to agree that they would not use any of the generated dollars for employee salary increases. I felt this was an important restriction given Indiana's current fiscal climate. We need to be pushing every dollar available to the classroom and ensuring that no teachers are laid off. I could not in good conscience support transferring funds without this stipulation. This must be a time when we focus on the needs of our Hoosier school children; even if it means that we must leave the wants of others for another day.
Unfortunately, our plan did not receive a single vote of support from House Democrats. Instead, House Democrats supported House Bill (HB) 1367, which passed out of the House by a party line vote of 51-48 on Tuesday.
The bill contains a number of provisions that will negatively impact the education of Hoosier children. It does not to ensure that the transferred dollars are directed to the classroom. The bill jeopardizes state funding for tests, such as the PSAT--a prerequisite to becoming a National Merit scholar-as well as K-3 diagnostic testing and grades 3-8 acuity testing.
Removing state funding for PSAT testing will place the burden of paying for this test on parents. Many families may be able to afford this fee, but there are a lot of Hoosier families struggling to make ends meet. This test is significant because it opens the doors for students to be National Merit Scholars. Students who deserve this recognition and the scholarship opportunities that follow this award should not be kept from that achievement. Students, especially those coming from tough backgrounds, deserve every opportunity to advance.
K-3 diagnostic testing allows teachers to understand the learning progress of their classroom. Removing funding for this test will hamper teacher's ability to prepare for an adequate learning environment for their students.
Flexibility, accountability and alternatives must be part of the educational promise we offer to Hoosiers. HB 1367 represents a step backward in our effort to create a world class education for every child in our state. As we continue through the second half of session, I can assure you that I will continue to fight to give schools, teacher and students every option to succeed by increasing flexibility in funding during these difficult economic times.