Indiana schools will have to work with less money this year - approximately $52 million statewide.

It's all part of an attempt by Indiana Gov. Mitch Daniels to balance the state's budget.

By order of Daniels and Chuck Schalliol, state budget director, monthly payments to schools will be reduced starting in March to start meeting a cap on school spending that lawmakers included in the current two-year budget.

Half of the reduction will be from March through the end of the fiscal year in June. The second half will come in July through the end of the calendar year. Daniels has proposed a freeze on basic funding for schools in the next two-year spending plan to help erase the state's deficit, and his plan would not make up the funding gap, according to an Associated Press story today.

The reductions would be based on enrollment, so the lesser payment totals vary by district.

Lawmakers traditionally made up any funding gaps between appropriation limits and the school formula.

The General Assembly sets a total appropriation for public schools in each two-year budget. But the spending plan also includes a complex formula that determines how money is distributed among school districts, according to the AP. The funding amounts are based on assumptions about enrollment, how much money schools receive from property taxes, and special needs for some students, plus other information.

Those assumptions can be off and may fluctuate, and the formula often results in funding needs that exceed what lawmakers appropriated.

But lawmakers have made up the so-called 'deficiency payments' in recent years, according to the AP. It's those payments Daniels plans to hold back.

For each of the four school corporations in Kosciusko County, that means a loss of $173,578 for Warsaw for the fiscal year and $337,177 for the calendar year; Wawasee, $90,062 fiscal, $174,946 calendar; Tippecanoe Valley, $57,384 fiscal, $111,469 calendar; and Whitko, $52,134 fiscal and $101,271 for the calendar year.

The fiscal year ends in June.

"We're still looking at exactly how much that will mean to us as far as loss of funds," said Jim Evans, Wawasee School Corp. director of finance.

Evans said Wawasee received notice of the withholdings Thursday but had some indication of the possibility of it a few days prior.

"Any time you lose funding, it's not a pleasant thing," said Evans.

At Whitko Schools, Indiana is withholding $6.82 per student for the fiscal year this year and an additional $3.67 per student for the calendar year, according to Phil Menzie, Whitko Community Schools Corp. director of finance.

Menzie said the state has an appropriations limit for school support for the fiscal year. Unless an additional appropriation is approved, the budget can't provide more money.

The state is withholding $26.7 million from the 2005 fiscal year tuition support appropriation beginning in March. The second level of withholdings begin in July for the rest of the calendar year and totals another approximate $25 million to $26 million from the 2005 calendar year spending authority.

Menzie said a memo from the Indiana Department of Education indicates the cuts won't be made up later.

"We're certainly going to have to watch things," said Menzie. Last year, Whitko made cuts in personnel that helped the school corporation make strides financially, but he said they will have to continue to be more vigilant. He said he just found out yesterday about the new cuts to schools, but it's just one more hurdle being thrown at schools.

"I think this is pretty much etched in stone," Menzie said.

Warsaw Schools Superintendent Dr. Dave McGuire said the approximate $400,000 loss to Warsaw amounts to $29.15 per student. For next year, he said, the funding loss for Warsaw may double.

"We're just studying what the impact is now," said McGuire.

Kosciusko County area schools already receive less than the state average, McGuire said, "so this is like a double blow to us."

Instead of correcting the state's formula for school funding, the state is just taking away money from everyone, McGuire said.

"The formula really favors the urban schools that have been shrinking over the years," said McGuire.

According to McGuire, the stopped payments are cutting into Warsaw's budget, not flatlining, as Daniels said.

One way or another, Daniels will balance the state's budget, said State Rep. Dave Wolkins. The withholding of the payments, Wolkins said, "is a necessity. There's just not enough money to go around and there's no interest in a tax increase."

When Daniels recently proposed a 1 percent tax increase for one year for people who earn more than $100,000, Wolkins said those people affected told him if Daniels makes his proposed budget cuts and the increase was for one year only, they would gladly pay it.

As for general tax increases, everyone at the statehouse is "scared," Wolkins said, but somehow Daniels will balance the budget.

"He is going to hit everyone," said Wolkins. "He's not discriminating." [[In-content Ad]]