Indy Chamber: IPS Should Slash Referendum Request, Make $500M in Savings

The Indy Chamber says Indianapolis Public Schools can create $477 million in savings through a combination of deep cost-cutting by eliminating staff, services and closing schools over the next eight years, plus leasing Broad Ripple High School to charter school operators.

If district leaders follow the proposal, the Chamber says, IPS should be able to erase a projected deficit of $319 million through 2026 and spend $243 million to boost teacher, and principal pay immediately. The district would only need to seek a combined $152 million in new property taxes for capital and operational needs.

IPS leaders previously signaled it would seek more than $500 million for operational funds from a property tax referendum on the November ballot.

But Al Hubbard, an Indianapolis philanthropist and influential school reform advocate who is partnering with the Chamber, says IPS would face opposition if it sought much more than $100 million for new operating funds.

Chamber CEO Michael Huber and consultant Michael Brink says they are still trying to convince IPS to follow their plan. He says the district will have to operate differently if it adopts the plan.

"It is a challenge because while they aren't radical changes but they would have to speed up a lot of the efforts that are currently taking place. And we acknowledge that many of the changes that they have put in place have been difficult to do in terms of the public process," Huber says. 

Additionally, Huber says, the business community is eager to help IPS to become more transparent and efficient.

In a sign that the two are still far apart, IPS Superintendent Lewis Ferebee pushed back by describing the recommendation to close as-yet-unnamed schools as “devastating” as it would impact the city's most challenged neighborhoods with very little public process." Yet, he pledged to continue collaborating with the Chamber on a plan.

“We believe, however, that a responsible referendum request cannot be anchored solely in revenue from cost savings that to this point are on paper only," he said in the statement.

Here are some of the Chambers' recommendations and the amount of savings or revenue expected during the next eight years:

• 50 percent reduction in Central Office staff, $32.7 million
• Reduce excess capacity at schools by closing buildings that equal 8,600 "empty seats," $100.4 million
• Phase out high school bus service over the coming years, expand IndyGo partnership, increase "walk zones" for students, $121.3 million
• Reduce other non-instructional personnel such as English Language Learner staff, $18.5 million
• Lease Broad Ripple High School to charter operators Purdue Polytechnic and Herron, $8 million
• Explore sale/lease of Central Office headquarters, $3 million
• Reduce teacher by 12 percent through attrition, $126.3 million

Part of the savings, the Chamber says, would lead to an immediate pay raise of 16 percent for teachers, $150,000 salaries for principals, and 2 percent annual raises for the next eight years.

The analysis by Chamber staff and local businesses is a sharp contrast to how IPS leaders described the district’s financial needs last year. That’s when Ferebee said a nearly $1 billion property tax increase was required to keep the district out of debt, improve safety and buildings, and give pay raises to teachers.

The referenda, previously planned to for the May primary ballot, is postponed to the Nov. 6 general election.

Ferebee is expected to announce the district's request for a general operation referendum at Tuesday's school board meeting.

Initially, the district sought $736 million, or $92 million per year for eight years, before canceling the request. In March, district leaders said they would instead seek $528 million, or $66 million per year.

The capital referendum, focused mostly on new safety measures and building improvements, is set for $52 million, a decrease of $148 million from the original request.

Currently, the district faces a $45 million budget deficit for the upcoming school year.

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