Here’s a little secret about school choice in Indiana: Public schools lose more students to other public school districts than to charter schools or private school vouchers.
According to the Indiana Department of Education’s fall 2020 Public School Corporation Transfer Report, 70,394 Hoosier students transferred from one public school district to another this year. That compares with 44,569 who attend charter schools and 35,150 who attend private schools using state-funded tuition vouchers, the options we think of as “school choice.”
Until a few years ago, Indiana didn’t see so many public-school transfers. School district operations were partially funded by local property taxes. Students could transfer from one district to another, but they were expected to pay “transfer tuition” to cover the costs.
But the state took over the funding of most school operations in 2009, relying largely on state sales and income taxes to pay for K-12 education. With that change, districts no longer needed to charge transfer students. In fact, it was in their interest to enroll out-of-district students – and get more money from the state – as long as they had room.
Gov. Mitch Daniels celebrated the change, arguing it would force schools to improve so they could compete for students. In a speech to the American Enterprise Institute, he said it was “delightful” that school districts were using billboards and direct-mail advertising to lure students.
But there is little evidence that families rely on real measures of school quality in making the decision to transfer. And, as with any competition, the system created winners and losers.
Schools that lose a lot of students to public-school transfers tend to fall into one of two categories. Some are very small, rural school districts like Hamilton Community Schools in northeastern Indiana, with 300 students; Medora Community Schools in southern Indiana, with 154 students; and Tri-Township Schools in northwestern Indiana, with 354 students. Maybe students transfer from those districts to larger districts for more extensive academic or athletic offerings, or maybe because it’s convenient for their families. An argument could be made that those tiny districts should consolidate, but that’s for another day.
The other category of losers includes city districts like Muncie, Marion, Anderson and Kokomo, which are surrounded by nearby suburban or rural districts. Those four districts have seen their enrollment decline by one-fourth since 2009.
Not surprisingly, winners in the competition include districts that surround the districts that are losing the most students. Nearby districts enroll several thousand students whose legal settlement is in the Muncie, Marion, Anderson and Kokomo school districts.
Some urban Indiana districts, like Indianapolis and Gary, lose a lot of their students to charter schools. Fort Wayne loses many students to voucher-funded religious schools. But the Muncie, Marion, Anderson and Kokomo districts lose relatively few students to charters and vouchers. Most of their losses are from students transferring to other public school districts.
We don’t know what motivates families to leave one public district for another; that would be a good topic for social-science research. And the state doesn’t post demographic data for students who transfer, so it’s hard to know if inter-district transfers are changing the racial and socioeconomic make-up of school districts.
We do know that the districts that students transfer to are often less racially diverse and less poor than the districts that they transfer from. Is state policy making it easy for middle-class families to abandon urban districts, leaving those districts with less state funding and a higher concentration of needy students? That’s a question that calls for more study.