By gutting its central office, Indianapolis Public Schools could free up $188 million a year to provide universal preschool, to pay key teachers more than $100,000 a year and to transform itself into a network of autonomous “opportunity” schools.

That’s the vision of a new report issued Sunday by the Mind Trust, an Indianapolis-based education reform group. The report, prepared for the Indiana Department of Education, details the sweeping changes the organization views as necessary to fully reverse decades of decline in the district.

And to make it happen, the Mind Trust says the state Legislature should yank control of the district from the IPS school board and hand it to Indianapolis Mayor Greg Ballard.

“We can do all of these investments under the current ledger,” said Mind Trust CEO David Harris. “We believe under our plan, really, everybody benefits.”

The trickiest part of the plan may be politics. Ballard has been cool to the idea of taking responsibility for IPS, arguing that it is incongruous for the mayor of the entire city to control just one of its numerous school districts.

Mind Trust officials said they do not expect there to be a concerted push for mayoral control in the 2012 legislative session—in spite of the fact that the big Republican majorities that passed sweeping education reforms earlier this year are assured for only one more year. Rather, they said the next thing to be done is to hold a “community conversation” to build support for the idea.

"We don't think it is an issue that's ripe for 2012," said Mark Miles, CEO of the Central Indiana Corporate Partnership and a Mind Trust board member. "This is a significant change for public education in the Indianapolis community. We think it requires a public dialogue."

In a prepared statement, Ballard reacted positively to the Mind Trust’s report but stopped short of endorsing it.

“The Mind Trust report offers some very interesting ideas, such as the Opportunity Schools, that merit further study,” Ballard said. “It is my sincere hope this report jumpstarts a much-needed discussion about the future of education in our community.”

The Mind Trust, which was paid $680,000 to develop the report, delivered it the Indiana Department of Education on Thursday. In August, the state identified six IPS schools as failing, electing to give control of four of them to private operators. Only one other district in the state, Gary Community Schools, has had a school seized by the state.

IPS Superintendent Eugene White, through his administrative assistant, declined to comment on the report until after he had read it.

The Mind Trust’s report rests on the premise that far too little of IPS’ nearly $540 million annual budget—just 41 percent—flows down into the schools, which spend the dollars more efficiently. According to the plan, giving schools more control would free up $18.5 million per year for new initiatives, including $14 million to pay for preschool for all 4-year-olds in the IPS district and $2.5 million to attract and develop talented teachers.

In addition, the Mind Trust calls for IPS to set high-performance standards to create a new category, called Opportunity Schools. Existing IPS schools—and perhaps even public charters not currently under the district’s control—could apply to IPS to be authorized as an Opportunity School.

If approved, such schools would be freed from most district policies and would have millions of dollars now controlled by the central office accessible to the school’s principal. Administrators at the individual school level could use the money to recruit star teachers with higher salaries, to purchase education services from outside vendors or to hire the IPS central office for some services.

But since most IPS schools are not yet ready for this kind of autonomy right now, the Mind Trust also calls for IPS to hire several “transformation directors” who would work to help prepare them to become Opportunity Schools.

Opportunity Schools could set themselves up to draw from a specific neighborhood or from the entire district (as IPS magnet schools do now). But either way, they would be responsible for recruiting students each year—and their funding would hinge entirely on how many students they signed up.

“Instead of trying yet again to ‘fix the school system,’ let’s unleash the talent and creativity of our best educators to create schools that we know will help students learn,” Harris wrote in a foreword to the Mind Trust’s 155-page report. It was prepared by North Carolina-based Public Impact, a not-for-profit education policy group.

Staffing at the IPS central office would shrink from 513 to just 65, as more of those administrative positions moved to the school level. The central office staff would still handle bond sales and other financing activities, would oversee special education and would operate a districtwide enrollment system.

The district also could offer transportation and purchasing services to the individual schools, but it would have to compete with outside vendors who might sell similar services to the schools.

And the central office would launch an effort to spawn new schools, working to recruit education entrepreneurs to start them. Those new schools would replace existing schools that would be shut down if they fail to make the improvements necessary to become Opportunity Schools,

Within six to eight years of launching the plan, the Mind Trust envisions all IPS schools qualifying as Opportunity Schools.

Out of 61 schools IPS operates, just six have students whose pass rates on the state-standardized ISTEP tests exceed the state average. Overall, only 43 percent of IPS students passed both the math and English portions of the ISTEP test in 2010, compared with a statewide average of 71 percent.

“We must confront the truth: The system is broken,” the Mind Trust report stated. “Much of the best work happens only when talented educators find a way to work around the bureaucracy.”