BizVoice March / April 2015

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March/April 2015 – BizVoice/Indiana Chamber 35
$18.36. Delaware County, for example, has seven school districts.
Faulk notes that going from seven districts to one would result in
potential education savings of $110 per county resident.
The report only deals with how the size of school corporations
impacts the costs of schooling. Earlier studies looked at how school
size impacts performance. Faulk and Hicks outlined those findings that
with the exception of very large corporations – bigger than most, if
any, Indiana districts might achieve – student performance is largely
unaffected by consolidation.
The brief recommends the Legislature focus on cost savings over
performance-related findings, implement a feasibility study and grant
program for small corporations and create financial incentives for
schools that gain efficiency.
It’s not just about the little guys
Nearly half of Indiana’s school corporations have more than 2,000
students (see chart).
Andrew J. Coulson, director of the Cato Institute’s Center for
Educational Freedom, studied the relationship between district
enrollment and spending in Michigan in 2007.
“My main finding echoed that of earlier studies in other states: the
very smallest and the very largest districts usually spend more than
mid-sized districts,” he explains via email. “In other words,
consolidating is not always a good idea. In fact, the evidence suggested
that 10 times as much could be saved by breaking up large districts
than by consolidating small ones.
“Another interesting conclusion from my study was that districts
tended to spend more when it was easier to raise revenue per pupil.
Specifically, districts that had fewer children per taxpayer tended to spend
more, since a tax increase of a given percentage raised per-pupil spending
more in districts with few students than in districts with many students.”
Nationally, the distribution of district sizes varies by state, Coulson
notes. However, research on consolidation and spending shows a
similar pattern: “Merging two districts that each enroll a few hundred
students is usually found to generate savings. But researchers in New
York state concluded that there is little benefit to consolidating districts
larger than 1,500 students. I found roughly the same thing in Michigan.”
He offers another solution to concentrating solely on consolidation:
expand private school choice via Indiana’s school scholarship tax credit
program. The program is available for individuals or corporations that
donate to scholarship-granting organizations.
“A similar program in Florida has been found to save tens of
millions of dollars a year for taxpayers, while also raising the
achievement of both the students who transfer to private schools and
the students who remain in public schools,” he concludes.
Not a top priority
While the 2007 Indiana Commission on Local Government
Reform, aka the Kernan-Shepard Report, actually suggested mandating
consolidation of school districts with less than 2,000 students (though
not eliminating schools, to ensure acceptable classroom sizes), there
hasn’t been a push for any consolidation at the state level. Faulk and
Coulson also noted they were unaware of any major pushes for
consolidation across the nation.
Nationally, the number of school districts has only decreased by
about 3,000 since 1972 (according to data from the 2012 Census of
Governments). Similarly in Indiana, the state has only decreased its
school districts by 24 in that timeframe.
To encourage studying consolidation at some of the smaller
districts, Faulk imagines a financial incentive from the state might
help, but acknowledges it’s a “politically hot topic” – one that isn’t
likely to be mandated any time soon.
It’s a hot topic not just at the state political level, as the idea of
consolidation elicits a certain passion from community members, Faulk
recognizes.
“A lot of it is the feelings of pride and ownership in an individual
school corporation, the history behind those. From what I’ve seen and
read, that’s one of the primary blocks,” she says.
RESOURCES: Dagney Faulk, Ph.D., Ball State University Center for Business and Economic Research, at cms.bsu.edu/academics/
centersandinstitutes/bbr | Andrew J. Coulson, Cato Institute Center for Educational Freedom, at
0
5
10
15
20
25
Distribution of School Corporations by County, 2007
Number of Counties
21
17
24
13
8
4
3 1 1
1 2 3 4 5 6 7 11 16
Corporations in County
Indiana School Corporations
by Enrollment Level
Number of Corporations (291 total)
140 to 499500 to 999
1,000 to 1,4991,500 to 1,9992,000 to 2,9993,000 to 4,9995,000 to 9,999
10,000 to 19,999
20,000+
0
10
20
30
40
50
60
59
4
19
33
37
44 44 44
7
2012 Student Enrollment
Source: “School Corporation Size and the Cost of Education,” Ball State University
Center for Business and Economic Research, 2014