Kenley wants to use stimulus on school budget-WEB ONLY

A leading state senator wants to rely on money from the federal stimulus package to give a slight spending increase to Indiana’s public schools.

Senate Appropriations Chairman Luke Kenley (R-Noblesville) said yesterday that he is still developing his proposal. But he wants to use $683 million in stimulus money in hopes of increasing basic funding for schools by an average of between 1 percent to 2 percent.

Kenley said by using the stimulus money, some state dollars that otherwise would have gone to funding schools could be put in a reserve fund. The state could then rely on those reserves if needed to keep school funding at adequate levels once the stimulus dollars run out in about two years.

A separate House Democrat plan would increase school funding by an average of 2 percent next year, in part by tapping into state reserves. Republican Gov. Mitch Daniels had recommended that school funding essentially remain flat given the tanking economy and revenue projections that have been coming in much lower than projections.

Daniels and many Republican lawmakers do not want to tap into the state’s reserves to provide new spending in the state budget lawmakers are working on this session. They say those reserves may be needed in case the recession gets even worse and drags on.

But Republicans also have said that as much as possible, they want to use most of the $4.3 billion the state is expected to receive in federal stimulus money for one-time expenditures.

The state is expected to get about $1.3 billion in stimulus money for education, and Kenley said $823 million could be used for basic spending for public schools and colleges and universities.

He wants to use $140 million of that money to shore up funding for higher education, and dole out the remaining $683 million to public schools through the state’s complex school-funding formula. He said if that was not done, all the money would flow only to Title I schools, which have a high number of students from poor families.

Kenley said Title I schools alone in Indiana already stand to receive $165 million in stimulus money. If they got another $683 million, Kenley said, they probably couldn’t find ways of spending it all.

“So there is no sense in not distributing it out to all [school] corporations to try to save some money for all kids in all kinds of environments,” Kenley said.

He said he would encourage schools to spend stimulus money on one-time expenses, such as technology. But Kenley acknowledged that some of the money would likely be used to increase base spending, even though the stimulus money will run out in about two years.

He likened that to building a cliff that would drop off in two years. But he said the extra state dollars put into reserves could provide at least a partial funding cushion for schools once the federal dollars run out.

Kenley also said that without the stimulus money, there might not be enough state money without using reserves to give schools a spending increase.

Dennis Costerison, executive director of the Indiana Association of School Business Officials, said many schools would be forced to lay off teachers if public schools do not receive a funding increase in a new state budget. He said he liked what he had heard about Kenley’s plan.

“Republicans don’t want to dip into reserves, the governor doesn’t want to dip into reserves, so it would be very difficult to have any real increases at all without the stimulus money,” Costerison said.