ISTA wants schools to tap reserves, rainy day funds

The state’s teachers union wants school corporations to tap their cash reserves and rainy day funds to get through the next year without laying off teachers.

The Indiana State Teachers Association offered its proposals Tuesday morning as an alternative to ideas offered last month by the Indiana State Board of Education, which focused more on spending cuts than on dipping into reserves.

ISTA’s ideas have been incorporated in House Bill 1367, authored by Rep. Greg Porter (D-Indianapolis) and supported by Speaker of the House Pat Bauer (D-South Bend).

“In these extraordinary times, we certainly acknowledge and know that our state is in a fiscal crisis,” said Nate Schellenberger, ISTA’s president. He added that he expects the state economy to recover, “but we also realize in the interim we have to do something to get [schools] through.”

HB 1367 would make five key changes, Schellenberger said during a press conference at the Indiana Statehouse. These five could save Indiana’s schools $577 million this year.

— Allow schools to use up to 5 percent of their capital-projects funds to pay general fund bills. This would be an increase from current law, which allows spending of 3.5 percent of the capital-projects fund for general bills.

— Suspend state appropriations for virtual charter schools and private school tax credits.

— Transfer 5 percent of schools’ overhead budgets to academic uses.

— “Strongly urge” school corporations to spend any cash balances they have that exceed 8 percent of their general fund.

— Encourage schools to spend up to 50 percent of their rainy day, emergency funds.

“It’s a rainy day, a monsoon in fact,” Schellenberger said.

ISTA’s plan, if adopted, would help schools absorb $297 million in state funding cuts ordered in December by Gov. Mitch Daniels.

ISTA’s plan differs sharply from the state board of education’s. The board, in a December letter to Daniels, said, “short-term, quick fixes are not sufficient in this uncertain economic environment. The revenue and expenditure base … must be reset at a lower level.”

The board recommended such things as freezing all salaries, freezing administrative hiring, cutting benefits provided to school board members, closing under-utilized buildings and having school corporations consolidate services, such as transportation and janitorial work.