Indianapolis Public Schools Faces $18M Shortfall Next Year, Considers Cuts, Layoffs

Indianapolis Public Schools leaders said Tuesday they could be forced to lay off employees this summer due to an expected $18 million shortfall in the 2021-22 school year. This comes with an expected decline in the state's per-student funding level at the district.

The district is already facing a $15 million shortfall this academic year, with a 4 percent dip in enrollment, but it has not yet made budget cuts at individual schools in response.

Superintendent Aleesia Johnson said that may be hard to avoid in next school year, as operations and staff at school buildings and central office are reviewed.

“So our goal is, to the extent possible, ensure that classrooms and the student learning experience is not impacted,” Johnson said. “And to the extent possible, we are making any reductions outside of impact on the classroom. Conversations are underway, but our priority is to ensure that classroom instruction, teaching and learning is impacted as little as possible by any reductions we have to make.”

Proposals to reduce services or staff would come before the IPS Board of School Commissioners for approval before the end of the school year, Johnson said.

As IPS braces for cuts, lawmakers are preparing the school funding formula for the next two fiscal years. Even though Gov. Eric Holcomb requested a boost in the K-12 budget, legislative proposals could lead to nearly flatline appropriations to IPS and other school corporations with high poverty among students.

The issue is how state funds are divided between the per student foundation grant -- the amount given to all students -- and the additional complexity funds, which add funding per student based on poverty, if they are learning English, and other factors.

As lawmakers increased the foundational funding and reduced the complexity funding in past years, IPS’s total per student funding for this year was $15 less than the amount in 2014.

Weston Young, chief financial officer, said based on current proposals at the statehouse, the district could see a decrease in total funding in 2021-2022, followed by a slight increase from current level in 2022-23.

Young will address the district’s budget shortfall at the 6 p.m. Thursday meeting of the IPS school board. The meeting is open to the public and will be live streamed. 

The district expects to receive around $100 million in federal funds, for its traditional district and charter school partners, from the second installment of the Elementary and Secondary School Emergency Relief Fund.

Those funds go toward the ongoing costs for health, safety, technology and academic needs during the pandemic. IPS has spent around $26 million so far. Johnson said the federal dollars are a one-time injection and won’t fill gaps due to enrollment declines, which decrease funding through the state funding formula.

“These resources cannot be used to address long term, sustainability fiscal issues that the district faces,” Johnson said.

The federal funds must be spent by 2023.

Contact WFYI education reporter Eric Weddle at eweddle@wfyi.org or call (317) 614-0470. Follow on Twitter: @ericweddle.