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Indianapolis Public Schools still seeking Indy Chamber’s referendum support

July 23, 2018

With just 24 hours until the deadline to change their request, Indianapolis Public Schools leaders are in final discussions with the Indy Chamber over how much money to seek from taxpayers in a referendum.

Months of collaboration and days of feverish haggling will conclude Tuesday, when the state’s largest school district and the city’s influential association of business leaders determine whether they head into November's election as allies or adversaries.

IPS began working with the chamber on a financial analysis with the aim of winning support for a referendum after a rocky rollout of the district’s initial plan. But instead of coming to an agreement behind closed doors, the chamber and the district this month released competing plans for how much the district needs for operating expenses, such as teacher pay. The chamber proposed drastic budget cuts and a tax increase of $100 million over eight years. The district, in contrast, says the minimum it needs is $315 million over the same period.

The school board voted last week to put the district proposal on the November ballot. The chamber and the district plans both include an additional referendum to ask taxpayers for about $52 million for school renovations, particularly school safety features.

The outsize influence of the chamber may seem odd—the business group has no formal role in the referendum process. But the support of the group could be instrumental in helping the district pass the tax measure, which leaders say it needs to avoid drastic cuts, including freezing pay for staff, eliminating teachers and reducing transportation.

It’s a relationship that puts the district in a difficult position, said Andrew Downs, an associate professor of political science at Purdue University Fort Wayne. When they are pursuing referendums, school districts want support from groups like the chamber of commerce because they “get the legitimacy” of a group considered fiscally responsible.

When IPS began the campaign for additional funding more than seven months ago, district leaders were forging their own course. But the district did not have strong community support for the request, which would have raised nearly $1 billion dollars by increasing property taxes. Eventually, the school board delayed the vote until the November election to give the district time to work with the Indy Chamber.

If the chamber comes out against the final referendum request, the district’s decision to work so closely with the group could backfire, Downs said. “When you have an organization like the chamber of commerce say, ‘we can reduce to a third what your request is,’ that’s going to hurt,” he said.

School board member Kelly Bentley acknowledged that losing the chamber’s support could be risky for the district. But ultimately, she said, the chamber’s plan is not realistic, and the amount of money that the district is seeking is the bare minimum.

“It wasn’t like we just said, ‘oh, let’s just pick a number,’ ” she said. The reduced request the district is proposing will already lead to cuts for schools, and the chamber plan would require even more severe cuts, she said.

“What the district has to do is be clear about what is realistic, what isn’t realistic, and what will be the difficult decisions that will have to be made,” she said.

If the district and the chamber are not able to come to an agreement, the business group could decide to step back from the vote. Or, it could wage an active campaign against the tax increase. The chamber has not decided what approach to take, said Mark Fisher, chief policy officer for the group.

But Al Hubbard, an Indianapolis businessman and philanthropist who helped fund the chamber report, said that he would campaign against the tax increase if the district goes forward with the $315 million request.

The budget must be considered in context, Hubbard said. The district has been shrinking for decades. At one time, it enrolled more than 100,000 students. Now it enrolls 31,000.

“It’s hard for a public institution to reduce its overhead in a way that’s consistent with the demand,” he said. “What we are trying to do is help them get there. There’s no question it’s not easy, but it’s the right thing to do.”

Fisher said the Indy Chamber has gotten unusually involved in this referendum campaign because IPS is the state’s largest district, and its success is key to the city’s brand. “It is what is going to drive or inhibit reinvestment in our urban core,” he added.

Because of the important role the district plays, the chamber wants to see it come up with a financially sustainable plan for the future that avoids the potential for state intervention, Fisher said. The chamber report recommends $477 million in cuts to the district budget over eight years, including closing underused schools, reducing the number of teachers, and eliminating district busing for high school students.

Those are cuts that district leaders say are asking for too much, too fast. But Fisher was not convinced.

“If they have concerns about the extent and the pace of implementing our recommendations, we need to see that analysis,” he said. “It cannot just be a random number.”

Just how important the chamber’s support could be to the success of the referendum is unclear. Even Tom King, who co-chaired the political action committee supporting the district’s aborted referendum last spring, is pushing for an agreement.

King, who led the chamber himself in the early 1990s, said the business group is careful with its research and doesn’t take cavalier positions—plus he believes it will be difficult to pass a referendum without the group’s support.

King said that the district needs more money, but, he added, “I think in order to get it they are going to have to compromise a little bit.”

Chalkbeat Indiana is a not-for-profit news site covering educational change in public schools.

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