Indianapolis Public Schools is contemplating a major overhaul in the way it distributes money to schools, which could have a big impact on where teachers are assigned, how much support schools receive and how evenly operational dollars are split up.

Earlier this week, board members saw a pair of presentations explaining how a new system could more strongly tie student needs to the money spent in their schools and sketching out a three-year process to make the change complete by 2017-18.

The concept is called “weighted” or “student-based” budgeting and has wide implications for students and teachers. For example, making the switch could benefit schools with high poverty by giving them more money and a better chance to hire more experienced teachers.

But that potentially could also mean less money for schools that are seen by teachers as desirable places to work, including those that serve wealthier children or kids with fewer barriers to learning, such as special education needs or support to learn English as a new language. If those schools get less money, it could mean they might not be able to afford all the experienced teachers who want to work there.

The district is a few steps away from tackling those sticky problems, but board members were enthusiastic that the district could move toward a system that makes it clear how much money is being spent at each school.

“I’ve never been able to figure out how much money we spend in our schools,” said board member Kelly Bentley, who rejoined the board this year after previously serving for 12 years.

Overhaul of teacher pay already in the works

David Rosenberg, of the education consulting company ERS, said the district could jump-start the process this year by undertaking an assessment of the way teachers and resources are distributed now and compare that to other cities. The timeline he presented proposed a pilot program for 2016-17 followed by a districtwide change the next year.

The proposal comes at a time when IPS is pushing to change the way it pays teachers with the goal of raising pay.

“If we don’t change how we handle finances, we’re not going to have enough,” Bentley said.

Administrators and teachers union officials began talks earlier this month on a new labor contract. Separately, the school board has been working on a new strategic plan, which could be released before the end of the month.

The weighted budgeting plan could connect both with the goal of creating a new teacher pay system and with the board’s plan, which is expected to prescribe a heavy dose of autonomy for schools that would allow principals to have much more control over their own budgets.

Question of equity in school funding

Jaclyn Duemler, one of three summer fellows who studied concerns about funding equity among IPS schools, told IPS board members that disparity, driven in part by the district’s teacher assignment system, has led to huge differences in how much is spent from school to school.

For example, she said, School 61 received just $3,666 per student for its 566 children in grades K-6. About 75 percent of the students come from families poor enough to qualify for free and reduced-price lunch, which for a family of four means annual income is less than $44,863.

But School 55 received $8,298 per student for 211 kids in grades K-6 even though far fewer kids come from poor families, with 66 percent qualifying for free or reduced-price lunch.

There are several reasons why the difference is so large.

Some of it is connected to school size. More kids requires more teachers and, therefore, more spending to pay those teachers. The schools also have somewhat different needs for extra services. School 55, for example, has about 19 percent of kids are in special education. That number is much smaller — 12 percent — at School 61.

But the biggest cost for any school is teacher salary, which traditionally has been driven by their experience. The more years teachers have worked, the more they are generally paid.

So schools with very experienced teachers cost the district much more than schools that are dominated by teachers who have just recently started their careers.

Some schools draw experienced teachers in droves

The current hiring process for IPS, Duemler said, allow principals to select the teachers they want but does not limit how many experienced teachers they might have. Schools that teachers want to work at draw so much interest and principals can select mostly veterans.

“They can spend as much money as they want on their teachers,” Duemler said. “They can attract the most experienced with the highest salaries.”

Schools where teaching is perceived as more difficult, such as those with high poverty, get less interest for open jobs. Principals at those schools often hire more first-year teachers as a result.

The disparities were clear when she looked at the per-student spending at the highest poverty school compared to the lowest poverty school, Duemler said. The wealthier school got about $1,400 more per student.

Duemler said that difference could help explain why children who are white, multiracial, Asian and Hispanic pass ISTEP at rates above the district average of 52 percent passing, while poor children, English-language learners, black children and students in special education pass at rates below that average.

A new system would bring challenges

A new system could create incentives to build better balance, so that more schools have a similar mix of veteran and less experienced teachers, Duemler said. But that will require careful steps to be sure the new approach doesn’t wreck unique schools.

For example, Bentley pointed out that Montessori school teachers must be specially trained, and other magnet programs require spending on learning tools that are specially designed to fit the school’s teaching method.

Duemler acknowledged that putting a weighted system in place requires careful planning.

“It depends on how you do it,” she said. “This is very complicated once you go into implementation.”

If the board decides to move ahead, the next step would be a six to eight week assessment by ERS that could begin later this fall.