June 2009


By: Wes Culver (R-Goshen, Ind.)

Unless they work in education or state government, not many people know or understand the complicated formula that determines how much funding each school corporation receives each year.

Each school corporation receives a specific dollar amount per student. So, two schools with the same number of students will receive a different dollar amount because the amount per student is different.

The amount per student can be immense. The lowest amount received by a school corporation in 2008 was $5,414 per student in Northwest Allen School Corp. The school corporation with the highest rate per-student was Gary School Corp., receiving $9,010 per student.

Several community members have voiced their concern with this variation. Why, they ask, does the state give more money per student to some schools and less to others?

Generally, tuition support for schools is tied to the numbers of students — “average daily membership” in bureaucratic terms — in each school district. As such, districts with declining enrollments face decreasing amounts of tuition support.

However, districts are still provided partial funding for students who have left the district, which is known as “ghosting.” Ghosting may occur when a student was enrolled at the start of the school year and then left sometime during that year.

Keep in mind, school districts have five years before funding is completely phased out for that student — 100 percent the first year, 80 percent the second, then 60 percent, 40 percent and, in the fifth year, 20 percent.

School systems with declining student enrollments have benefited greatly from this method, while those with growing enrollments have suffered, even though both face the same problem of changing enrollment.

The governor’s budget wants to finally end ghosting to make sure the money follows the student. If the student is not there, the money for that student wouldn’t be, either. However, the House Democrat’s budget proposal includes the ghosting formula.

A declining enrollment creates no more problems than an increasing enrollment. Officials from schools with declining enrollments say the students leaving are not from one class, but rather a few from every classroom; therefore, they cannot get rid of any teachers. However, neither can a growing school corporation place all the new students in one classroom and hire one teacher.

Growing schools are forced to handle their greater enrollments by redistricting to most efficiently handle students; declining schools should do the same.

These are not easy problems for superintendents to resolve. But that is what their job is and why we put them in those positions. Tough decisions aren’t always easy for businesses and families either, but they have to make them when their income declines.

I don’t think we should ask our schools to do anything we wouldn’t do as families and business people. They should not be exempt from the struggles everyone else faces.

Wes Culver (R-Goshen) represents House District 49 in the Indiana House of Representatives.  His website is www.electwesculver.com.

By: Brian Sikma

The turmoil that has enveloped Chrysler Corporation has had a substantial impact on our state.  From the parts suppliers who employ Hoosiers at their Indiana factories to the dealerships that dot the state and provide jobs to local mechanics and sales personnel, many have been impacted by Chrysler’s inability to stay solvent and afloat amidst a serious economic downturn.  But what has happened to the automaker also impacts Hoosiers who have never worked with or for the company or its many suppliers and vendors.  Because the state invested some road construction trust funds and some of the assets of the state’s police and teacher pension trust funds in secured Chrysler debt, the government’s mismanagement of the company’s reorganization has cost Hoosiers roughly $5 million.

The loss that these pension funds and the road construction fund have sustained has come about not because of Chrysler’s inability to stay solvent but because of the federal government’s decision to rewrite decades of bankruptcy law precedent.  Whenever a bond holder, such as these three state trust funds, invests in corporate bonds that are considered secured debt, they are investing in the company and, should the company fail, they are guaranteed a recovery of their investment by the sale of the company’s assets.  

When the federal government stepped in and began the process of organizing and managing Chrysler’s restructuring, they did so in a way that disregarded the fact that holders of secured debt are supposed to be first in line to recover their money.   This means that as Chrysler tries to restructure itself in the shelter of a bankruptcy court according to a blueprint forced on it by President Obama’s administration, it is jeopardizing the soundness and sustainability of trust funds that many Hoosiers rely on as part of their retirement.  Additionally, the state’s ability to build the roads that would generate jobs, improve the state’s transportation infrastructure and make Indiana a more attractive place for businesses to come to is threatened by the federal government’s actions.

Indiana State Treasurer Richard Mourdock has used his authority as manager of the threatened funds to file pleadings against the currently proposed Chrysler restructuring.  Mourdock is rightfully arguing that retirees and state taxpayers should not be forced to bear the brunt of this loss imposed by the disturbing actions of the federal government.  While it is important that Chrysler rework its structure and prepare itself to emerge from bankruptcy, it must not do so while following a plan that destroys the very trust on which it will be able to rebuild its business.
By stepping in and causing a $5 million loss to Hoosier retirees and taxpayers, the federal government has not only hurt Hoosiers, but it has also hurt Chrysler and started the very concerning practice of rewriting contracts that impact the economic standing of many Americans.  Investors observing their investments being destroyed by the federal government not only suffer an immediate loss but are also put on notice that any decision they make based on the mutual agreement and trust of the private sector may be quickly overridden if a government bureaucrat disagrees with the terms of the contract.  The unilateral rewriting of business and financial agreements by the federal government is a practice that must stop because it undermines the process by which our country will emerge from this downturn.
Our economy will recover and our nation will bounce back from this downturn if the federal government understands its real role in the marketplace.  The appropriate role of the federal government, and the job it should rightfully assume if we are going to see an increase in economic activity, the creation of jobs and the expansion of wealth, is to fulfill the duties of a referee.  A referee does not participate in the game but he or she does make sure that the rules are enforced.   When the federal government tries to participate in the economy by using its power to rewrite the rules and nullify agreements founded on mutual trust, then it exceeds its proper authority.  When, on the other hand, it enforces the rules fairly on all participants and holds parties to their contractual obligations, it is a party to the creation of the trust that is so necessary and vital to the operation of our economy.
The American people will emerge from this downturn strengthened for what lies ahead.  Chrysler Corporation and other companies that are going through restructuring will be poised to lead the way in the growing economy of the future, but only if the obligations that they have are not ignored or destroyed by irresponsible federal actions.  President Obama and his economic team must immediately cease their misguided efforts to dramatically make the government, and not the individual, the most important factor in our economy.turmoil that has enveloped Chrysler Corporation has had a substantial impact on our state.  From the parts suppliers who employ Hoosiers at their Indiana factories to the dealerships that dot the state and provide jobs to local mechanics and sales personnel, many have been impacted by Chrysler’s inability to stay solvent and afloat amidst a serious economic downturn.  But what has happened to the automaker also impacts Hoosiers who have never worked with or for the company or its many suppliers and vendors.  Because the state invested some road construction trust funds and some of the assets of the state’s police and teacher pension trust funds in secured Chrysler debt, the government’s mismanagement of the company’s reorganization has cost Hoosiers roughly $5 million.

The loss that these pension funds and the road construction fund have sustained has come about not because of Chrysler’s inability to stay solvent but because of the federal government’s decision to rewrite decades of bankruptcy law precedent.  Whenever a bond holder, such as these three state trust funds, invests in corporate bonds that are considered secured debt, they are investing in the company and, should the company fail, they are guaranteed a recovery of their investment by the sale of the company’s assets.  

When the federal government stepped in and began the process of organizing and managing Chrysler’s restructuring, they did so in a way that disregarded the fact that holders of secured debt are supposed to be first in line to recover their money.   This means that as Chrysler tries to restructure itself in the shelter of a bankruptcy court according to a blueprint forced on it by President Obama’s administration, it is jeopardizing the soundness and sustainability of trust funds that many Hoosiers rely on as part of their retirement.  Additionally, the state’s ability to build the roads that would generate jobs, improve the state’s transportation infrastructure and make Indiana a more attractive place for businesses to come to is threatened by the federal government’s actions.

Indiana State Treasurer Richard Mourdock has used his authority as manager of the threatened funds to file pleadings against the currently proposed Chrysler restructuring.  Mourdock is rightfully arguing that retirees and state taxpayers should not be forced to bear the brunt of this loss imposed by the disturbing actions of the federal government.  While it is important that Chrysler rework its structure and prepare itself to emerge from bankruptcy, it must not do so while following a plan that destroys the very trust on which it will be able to rebuild its business.

By stepping in and causing a $5 million loss to Hoosier retirees and taxpayers, the federal government has not only hurt Hoosiers, but it has also hurt Chrysler and started the very concerning practice of rewriting contracts that impact the economic standing of many Americans.  Investors observing their investments being destroyed by the federal government not only suffer an immediate loss but are also put on notice that any decision they make based on the mutual agreement and trust of the private sector may be quickly overridden if a government bureaucrat disagrees with the terms of the contract.  The unilateral rewriting of business and financial agreements by the federal government is a practice that must stop because it undermines the process by which our country will emerge from this downturn.

>Our economy will recover and our nation will bounce back from this downturn if the federal government understands its real role in the marketplace.  The appropriate role of the federal government, and the job it should rightfully assume if we are going to see an increase in economic activity, the creation of jobs and the expansion of wealth, is to fulfill the duties of a referee.  A referee does not participate in the game but he or she does make sure that the rules are enforced.   When the federal government tries to participate in the economy by using its power to rewrite the rules and nullify agreements founded on mutual trust, then it exceeds its proper authority.  When, on the other hand, it enforces the rules fairly on all participants and holds parties to their contractual obligations, it is a party to the creation of the trust that is so necessary and vital to the operation of our economy.

The American people will emerge from this downturn strengthened for what lies ahead.  Chrysler Corporation and other companies that are going through restructuring will be poised to lead the way in the growing economy of the future, but only if the obligations that they have are not ignored or destroyed by irresponsible federal actions.  President Obama and his economic team must immediately cease their misguided efforts to dramatically make the government, and not the individual, the most important factor in our economy.

Published in the South Bend Tribune and the Northwest Indiana Times.