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A closer look: The cost and benefits of quality early childhood education in Indiana

For more than a decade, Indiana Senate Democrats have pushed to make early childhood education accessible for Hoosier children across the state. They’ve argued that ensuring every Hoosier student arrives in kindergarten ready to learn is an investment that far outweighs the cost. Opponents of increasing access to prekindergarten frequently point to cost as reason for blocking a robust, public early education option. But after a full assessment of both the cost and benefits of improving access to early education confirms the return on investment strongly favors both students and the Hoosier economy.

Lanane, Senate Democrats roll out universal pre-k proposal>>

Estimating the potential cost

A number of factors are to be considered when evaluating the cost of a robust early education program. According to a report released by the Center for Evaluation and Education Policy (CEEP), states spent on average $4,847 per pre-kindergarten student in 2011. States neighboring Indiana spent $4,198 per preschooler in 2011. Comparatively, Indiana’s FY2014-2015 budget allocates more than $13 billion to cover the tuition of students attending the state’s public and charter schools. The budget also sets a base or “foundation” amount for each Hoosier K-12 student at $4,569 in FY14. CEEP estimates that a targeted program for at-risk four-year olds not currently in existing federally-funded programs would cost about $126.5M per year at 100% participation.  In a more likely scenario, If only 75% participated, the cost would be $88 million.

CEEP Report: Is Indiana ready for state-funded Pre-K programs? Revisited>>

Just under $200 million of resources earmarked for education will go to fund full-day kindergarten in FY14. In FY14, schools will receive a grant of $2,448 for each student enrolled in kindergarten classes. Local school corporations are then left to fund the difference. To temper the cost, some communities have turned to local philanthropies, community-based partnerships and other organizations for assistance. A statewide early childhood education program could be modeled after Indiana’s full-day kindergarten program while incorporating a blend of public-private partnership and federal funding to help offset cost.

Evaluating the benefits

The benefits, both those realized today and for future generations, of ensuring every Hoosier child enters the classroom ready to learn are numerous. Early childhood programs help jumpstart cognitive development and immerse children from an early age in an environment of social interaction and learning. By narrowing the achievement gap we set our students up to succeed. In a report issued by the Indiana Education Roundtable, researchers found that those students who attended prekindergarten are:

  • More likely to graduate high school (65 percent vs. 45 percent)
  • More likely to be employed (76 percent vs. 63 percent)
  • Earn a significantly higher median annual income ($20,800 vs. $15,300)
  • More likely to own a home (37 percent vs. 28 percent)
  • Less likely to have any arrests (36 percent vs. 55 percent)
  • Less likely to have spent time in prison or jail by age 40 (28 percent vs. 52 percent)
  • Less likely to participate in welfare programs

Report to the Legislative Interim Study Committee on Early Childhood Education>>

The success of students equipped with a quality early childhood education also generates widespread fiscal benefit for the state. The same Indiana Education Roundtable report included research that estimated for every dollar invested, quality prekindergarten programs returned $13 in public benefit. These returns are attributed to savings from fewer incarcerations, reduced spending on special education, remediation and public assistance. Hoosiers earning a higher income also contribute by spending more in their local economies and broaden the state’s tax base. According to a report commissioned by the Indiana Council on Higher Education, after 25 years, the return on a statewide prekindergarten program would outpace costs by $31 billion. For reference, the state’s budget for the next two fiscal years spends nearly $30 billion.

Bottom line

From increasing graduation rates and Hoosier incomes, to lowering public expenditure on remediation and incarceration, investing in early childhood education pays dividends that far outweigh the cost.

How to show my support for issues before the General Assembly>>

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Lanane on budget close out: Time to shift surplus conversation back to helping Hoosiers

The Indiana Auditor of the State’s office released fiscal information on Thursday detailing the economic standing of the state. Indiana annually compiles numbers at the end of each fiscal year listing the amount of revenue the state collected, expenditures made and status of the state’s reserves. Senate Democratic Leader Tim Lanane responded to news of the surplus, claiming that it’s time to move the conversation toward investing in the betterment of working Hoosiers.

“Hoosier households earn nearly 13 percent less today than they did at the beginning of the decade. The state’s unemployment rate remains one of the highest in the Midwest and the rising cost of attending college continues to put more young Hoosiers in debt.

As expected, the state’s surplus came in just under $2 billion. Senate Democrats questioned the legislature’s priorities this budget session as a number of job creation and education initiatives were sidetracked or tabled. As a result, more than half of Indiana’s public schools will see their state funding in 2015 dip below what they were budgeted in 2011 and Indiana remains one of ten states without a state early education program in place.

More on education funding in Indiana>>

Summary of FY2013 Reversions by state agency (PDF)>>

Detailed Listing FY2013 Reversions Statement (PDF)>>

Senate Democratic Leader Tim Lanane released the following statement concerning today’s Fiscal Year 2013 budget closeout announcement:

“While the governor’s announcement today is encouraging, the fact remains that Hoosiers still face real challenges.

“Hoosier households earn nearly 13 percent less today than they did at the beginning of the decade. The state’s unemployment rate remains one of the highest in the Midwest and the rising cost of attending college continues to put more young Hoosiers in debt.

“I am certain many Hoosiers find it difficult to determine how the state’s inflated surplus has translated to their benefit.

“It’s time to address this. We must refocus Indiana’s fiscal priorities in a way that makes real and direct progress toward meeting these challenges.

“By emphasizing prudent investment in job skills training, in a robust, statewide early education program, addressing backlogged local infrastructure projects and finding ways to curb the cost of attending college, we can take those needed first steps.

“Hoosiers expect lawmakers to address the challenges they face every day, it’s my hope we can shift the conversation toward confronting those issues.”

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Budget proposals to strengthen public schools, repair local roads, expand health care coverage blocked

2013_Budget_Blogpost

On Monday, Senate Democrats offered eighteen substantial amendments to House Bill (HB) 1001, legislation crafting the state’s next biennial budget. Proposed changes to the measure included investments in the areas of education, infrastructure, and health care.

“Hoosier families know that sound fiscal footing relies on a foundation of good investments,’ said State Senator Karen Tallian. “Our budget recommendations are comprised of strategic contributions our state can make now that pay off in the long-run.”

Sen. Tallian, who serves as Ranking Minority Member on the Senate Appropriations Committee, continued saying that proposed changes to the budget reflect discussions Hoosier families have around their kitchen tables and endows the state’s resources towards strengthening Indiana’s network of communities.

Improving Hoosiers’ health

Budget proposals offered by Senate Democrats included initiatives to expand health care coverage to 400,000 working Hoosiers. Recommendations included expanding Medicaid when the cost is fully paid for by the federal government, structuring an expansion after the state’s Healthy Indiana Plan and creating a contingency plan if the governor’s proposed expansion is rejected. Democrats continued to reiterate the 30,000 jobs expanding coverage would create as a strong basis to cover more Hoosiers, though the initiatives were rejected along party-line votes.

Sen. Tallian explained why offering an alternative health care component was an important addition to the budget:

SEN. TALLIAN: “The Senate Democrats today offered four amendments that would have addressed Medicaid expansion, health care expansion for Indiana…”

(Length – 02:09)

Investing in pre-k, capping voucher funding

Acknowledging the strong support for the importance of early education and the need to oversee the state’s school voucher program, Senate Democrats offered a package of amendments to improve educational outcomes for all Hoosier children. An initiative offered by State Senator Earline Rogers would have created a pilot preschool program to evaluate best practices. An additional amendment would have separated the funding appropriated to the state’s voucher program and capped the amount of funds diverted from public schools.

SEN. ROGERS: “Well, what it would have done was, for us to stop and take a look at the vouchers and to not proceed until we were certain that the dollars were there for the other public schools…”

(Length – 00:32)

SEN. ROGERS: “We’ve always thought that early childhood education was the missing piece of the puzzle that we needed for education reform. You know studies show…”

(Length – 01:21)

Rebuilding local roads

An amendment offered by Senate Democrats to restore transportation funding back to the levels included in the House-passed budget were rejected along party lines on Monday. The amendment would have allowed more flexibility and control for local governments. Senate Democrats aimed to give those communities additional  infrastructure funding to be  allocated to where attention is most needed in their communities.  State Senator Tim Skinner authored the amendment as a means of injecting immediate dollars into communities to begin their local roads projects.

SEN. SKINNER: “Well, I think every one of us recognizes that we have not done enough in the last few years because of the recession to stay on top of the funding that we need for local roads…”

(Length – 00:39)

Senate Democrats will continue to push for these common sense initiatives as the budget process moves forward.

A complete listing of Senate amendments can be found at: http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2013&session=1&request=getBill&docno=1001 .

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A closer look: The cost and benefits of expanding health care coverage in Indiana

Let’s talk about cost: Expanding health care coverage in Indiana

As lawmakers debate whether to implement a part of the federal health care law that expands Medicaid coverage to 400,000 more Hoosiers, they frequently bring up the cost of expansion. A number of factors must be considered when breaking down the cost of expansion, including additional Medicaid enrollees as required by federal law, how the state will draw down federal funding for expansion and other offset funding.

Jump to the bottom line>>

What is Medicaid?

Medicaid is a federally-mandated program administered by the states providing health care coverage to low-income adults and children. States have the ability to determine eligibility and benefits based on income levels. Indiana currently provides Medicaid coverage to those making 24 percent or less of the federal poverty level (FPL), a yearly income of less than $4,200 for a family of four.

In a presentation before the State Budget Committee, Milliman, an actuary hired by the state to assess the costs of expansion, noted in Fiscal Year (FY) 2012 Indiana covered on average a total of 819,622 adults and children every month. The large majority of those covered were children, 552,300. Including coverage for the aged, blind and disabled, Medicaid covered 1,091,592 Hoosiers on average every month in FY2012.

Average monthly Medicaid enrollment FY2012demographics

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State Budget Process and Procedure

2012BudgetGraphProcess

The State Budget Committee has begun hearing budget requests from state agencies for fiscal years 2014-2015.

The budget requests include detailed information about the services provided by state agencies and the costs of doing so. The State Budget Committee uses the budget requests to evaluate state agencies, hold government programs accountable and to guide future funding decisions.

See below to learn more about what a budget request typically includes and how the legislature uses the budget requests to guide the budget writing process. Subsequent blog posts will include each state agency’s official budget request, line item expense and revenue reports, and highlights from each agency’s presentation to the State Budget Committee.

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Audit Watch: High risk for state mismanagement

The independent audit is expected to reveal a number of problems in the way the state handles money that lead up to the three recent cases of lost and discovered taxpayer dollars totaling $527M. The audit is being conducted by the private firm Deloitte & Touche LLP. The risk assessment is the first step in the process which is expected to wrap up with a final report by mid-December.

Deloitte presented their risk assessment to the State Budget Committee on Monday, Sept. 10, citing 17 of 18 business processes at Dept. of Revenue (DOR) as high or medium risk.

Read the risk assessment report>>

Deloitte also pointed to an “organizational structure” that may not be designed to properly support DOR strategies and goals, more specifically noting inadequately-defined responsibilities, key positions within the structure left vacant or sporadically filled and employees lacking the proper training or access to training plans to acquire needed skills. What’s more, “inflexible and antiquated” tax-processing applications contributed to the DOR’s inability to meet its obligations or pivot and adapt to “the changing environment in which the organization operates.”

These  report indicating potential insufficient levels of staffing and outdated applications comes on the heels of two consecutive departmental reversions totaling more than $8 million. In FY10-11, the DOR reverted more than $6.9 million or 12.9 percent of the agency budget and nearly $1.5 million in FY11-12.

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State closes out fiscal year, reports surplus built on service cuts

The Indiana Auditor of the State’s office released fiscal information today detailing the economic standing of the state. Indiana annually compiles numbers at the end of each fiscal year listing the amount of revenue the state collected, expenditures made and status of the state’s reserves. State Senator John Broden responded to news of the surplus, claiming that it does not come without a cost.

As expected, the state’s surplus rose to over $2 billion, however the amount was largely the result of cuts in services made to vital programs. In all, more than $428 million in General Fund reversions went toward the cash reserves in fiscal year 2012.

More than $2 million in cuts were made to a popular initiative to keep elderly Hoosiers in their homes, over $4 million were made to residential services for Hoosiers with developmental disabilities and another $4 million was slashed from the funds the state appropriates to the those with serious mental health issues.

Summary of FY2012 Reversions from the General Fund (PDF)>>

Detailed Listing FY2012 Reversions Statement (PDF)>>

Sen. Broden released the following statement in response to State Auditor Tim Berry’s announcement today of a record $2.1 billion state surplus at the close of the state’s Fiscal Year 2012.

“While the governor’s office is claiming political victory about another state surplus, we can’t ignore the fact that there are losers in the equation. The state should not have accumulated this much without restoring cuts that were initially masked as temporary measures to address state funding shortfalls. These accumulated savings have come at a cost to Hoosiers, from cuts to K-12 schools and higher ed funding to services for vulnerable populations.

“Last year was a time of hardship for many families in our state. Instead of stepping up assistance to fill in those gaps, the state has pulled back services, leaving many Hoosiers to struggle to the detriment of their health and livelihood.

“The past several years have warranted budget reductions and tight management, and we have accomplished that through the state budget approved by the General Assembly. Continually, however, this administration has unilaterally overridden legislators’ decisions, based on public testimony and observance of local needs, and cut services to certain populations.

“These decisions were not made based on public budget hearings nor were they made by locally elected officials. They were made in offices in Indianapolis.

“When a political win comes with human costs, it certainly isn’t a victory we can all share.”

Sen. Broden is the Senate Democratic member on the State Budget Committee and the ranking Democrat on the Senate Appropriations Committee.

Audit Watch: Details of the audit

So what can we  expect from the independent audit approved by the State Budget Committee in April?

Step One: Initial Risk Assessment

Expected to be completed for the State Budget Committee’s July meeting.

First, Deloitte will conduct a “Financial Operational Risk Assessment,” which will include the following:

1. The adequacy of the DOR’s internal IT and financial controls

2. The adequacy of the DOR’s current IT systems, policies and procedures

3. The adequacy of the DOR’s current financial policies and procedures

4. The adequacy of the IT, financial and auditing organizational structure Continue reading

Independent audit rejected by Republicans

The State Budget Committee met on Wednesday and Republican members twice rejected a motion by State Senator John Broden (D-South Bend) calling for an independent audit of how $320 million was misplaced for over five years. The misplaced funds have sat unaccounted for in a Dept. of Revenue account since FY2007.

Sen. Broden offered two motions during the meeting calling for an independent audit of the matter, saying the audit was needed to restore the public’s faith and credibility in the state’s accounting and budgeting practices.

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