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Can the school district in Monroe County use public funds to fund private preschools?

Teacher Annie Groves blows bubbles for the children at Monroe County Community School Corp.'s Early Learning Center on Thursday, July 20, 2023.

Editor's note: This story has been updated to reflect that charter schools are public schools, to clarify which private preschools can apply to partner with MCCSC and to correct Schlesinger's work history.

Monroe Community Schools Corp. wants to use about $6 million in public dollars to expand preschool capacity, in part at private providers, but some community members have questioned whether that plan is appropriate or even legal.

Further questions stem from the local school district’s mixed messages about whether some of the public dollars would pay for preschools that provide instruction based on religious doctrines, potentially running afoul of the U.S. Constitution's separation of church and state.

The school corporation’s plan to raise public dollars for private preschools — much less religious schools — isn’t sitting well with some local stakeholders, given Indiana public schools’ decades-long battle against state legislators’ repeated efforts to siphon money from traditional public schools toward charter schools.

Bloomington resident Louise Schlesinger, who flagged the district’s plan in a Herald-Times column, said the public school district should not raise taxes to give away public funds to private schools.

“Private schools should be self supporting through their tuition,” Schlesinger said recently.

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MCCSC estimates more than half of 3- and 4-year-olds in Monroe County are not enrolled in preschool programs, with cost and shortage of available slots being primary barriers.

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According to the U.S. Department for Health and Human Services, early childhood systems "play a vital role in supporting (children's) social-emotional development and mental health (which) are associated with positive long-term health, educational, and well-being outcomes."

The corporation says on its website a survey of 400 registered voters indicated support for the initiative. MCCSC did not provide the survey when asked via email Friday.

MCCSC is seeking a referendum to raise $8.5 million in the first year. The amount would increase in subsequent years if property values rise. MCCSC is projecting an annual referendum increase of 5%, though property values in Monroe County rose at an annual average rate of 9% in the last three years.

Early voting on the referendum has begun. Final voting will be on election day, Nov. 7.

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Of the $8.5 million, the corporation wants to use:

  • $2.5 million for free pre-kindergarten for 3-year-olds whose families meet free/reduced lunch guidelines
  • $3.5 million for free or reduced-cost pre-kindergarten for 4-year-olds.

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In an email, Alexis Harmon, the district’s director of educational technology and communication, said the district plans to spend the $6 million on personnel to expand capacity within MCCSC and with private providers that have achieved the second-highest and highest ratings of the state’s Paths to Quality child care quality rating and improvement system: Levels 3 and 4.

Harmon said private providers rated Level 3 and 4 can apply to partner. She said none of the public dollars would go toward paying private providers for investments they need to make or testing they have to pass to reach Level 3 or 4.

Harmon did not answer why the district is working with private providers, rather than expanding capacity solely at MCCSC’s preschools, all of which are accredited by the National Association for the Education of Young Children — an accreditation that the district will not require of its private partners. MCCSC Superintendent Jeff Hauswald did address the question in a column in The Herald-Times, saying the school district heard providers' concerns about being put of out of business.

"This was never our intent," he wrote.

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Exactly how and how much public money the school corporation plans to funnel to private preschools is unclear.

Harmon initially said the district hopes to provide early childhood education to “a significant number” of students. After follow-up questions, she said “the amount of money shared with private providers would be determined by enrollment and the income levels of those enrolled at each site.”

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Schlesinger, who worked at local children's museum and whose mother worked in early childhood education, said the lack of clarity in the information provided by the school system will prompt her, for the first time, to vote against a public school referendum.

“MCCSC has not articulated any plan of how they’re going to expand or help expand quality early childhood education,” she said. “My impression is that they do not have a plan and this might be one of those bait and switch situations where, quietly, the money … will be used for something else in their budget.”

Bloomington City Council member and former mayoral candidate Susan Sandberg, who was invited to be part of an advisory committee that shaped the referendum — but did not participate — said she has voted "no."

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Monroe County Community School Corp. Superintendent Jeff Hauswald during the October board meeting.

Despite repeated requests, the administration did not describe the mechanism by which it planned to funnel the public dollars to the private preschools, except to say that it would involve a memorandum of understanding.

Whether any money would go to religious preschools also is unclear.

While MCCSC Superintendent Jeff Hauswald wrote in the H-T column, “We do not plan to partner with religious schools,” Harmon said in an email after the column was published that religious schools “would be eligible to apply to partner with MCCSC” provided they meet the requirements.

Adam Terwilliger, the district's director of finance & logistics said Oct. 24 on WFIU's Noon Edition, “I think, we have to … vet all of these providers through legal, correct. And anybody that does not match anything that’s … a prescribed legal process and accountable by state laws and so forth we … would not be able to do. So … if it so shakes out that that’s the case, we would not do that, absolutely.”

Harmon said via email, “If the referendum passes, we will have our legal interpretation vetted by the Indiana Department of Education. This is why we would allow religious schools to apply to understand interest and then review it at a more appropriate time.”

Centers with a religious affiliation do not have to obtain a state license — they merely have to register — and they generally are not rated on the Paths to Quality scale. As of Friday, according to the state, only one such school in Bloomington was rated on the PTQ scale: Covenant Christian School, on East Moores Creek Road.

The school's executive director, Shelly Hunt, said she is scheduled to meet with Hauswald this week. Hunt said she requested the meeting because she is unclear whether her school can participate and, if so, how.

Hunt said the school is at capacity, with 80 children, and she would like to know whether the dollars raised in the referendum can help defray tuition costs.

"We would love to participate," she said. But she, too, said she has questions about whether the school could even accept public dollars.

Sage Riggins plays with bubbles at Monroe County Community School Corporation's Early Learning Center on Thursday, July 20, 2023.

With which private preschools does MCCSC want to partner?

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It's unclear with which preschools MCCSC has had discussions. Harmon, MCCSC Communications Officer Kelby Turmail and Terwilliger did not identify the preschools.

More than 30 preschools in Monroe County have achieved at least PTQ level 3, according to the Indiana Family and Social Services Administration.

The Herald-Times contacted seven of the schools. Four of them did not reply to phone or emailed messages.

Kelsie Thomas, director of Jill’s House Intergenerational Preschool, said the school had had no discussions with MCCSC. She said money for additional staff likely would not help increase capacity because of the facility’s size constraints.

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Jessie Yeary, director of communications and advocacy for SCCAP Head Start Villages, also said she hadn’t spoken with anyone from MCCSC. While the facility has space, Yeary said it has to follow strict guidelines because the Head Start program is funded with federal dollars, and it was unclear how local dollars could be incorporated.

Kelly Sipes, executive director of Penny Lane Child Care, which has PTQ Level 4 and accreditation from NAEYC, said both locations combined have room for about 50 more children, but she said properly trained and degreed teachers are hard to find. Depending on education, she said teachers could start at about $16 or $17 per hour.

"If I could find teachers ... I could enroll more kids," she said.

'Someone should be accountable for answering that question'

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Terry Spradlin, president of the Indiana School Boards Association, said it wasn't clear to him how school referendum tax funds could be used to support private-sector preschools.

"Is there an understanding about what the district already offers and where is the need?" Spradlin asked. "And can referendum funds be used for that? Someone should be accountable for answering that question."

Hauswald said in a recent interview he's confident the proposal is legal.

The superintendent said MCCSC would contract with private preschools, comparing it to other kinds of education the district contracts for, such as autism learning centers.

"We do that already with some student supplemental services," he said, adding that preschool is so important, MCCSC would find a way to use the tax funds to supplement local pre-K needs.

MCCSC considered including the cost of expanded preschool in last year's referendum funding package but opted not to, he said. The state had a $2 billion revenue excess which school officials hoped would be diverted to early childhood education. It wasn't.

"Why ask for more money than needed, since we were optimistic they would fund preschool?" Hauswald said. "It didn't feel right to ask for more than what was needed."

Turmail said via email the school corporation's ability to contract for services comes from a state law about school corporation's Specific Powers.

However, staffers for the Indiana Department of Local Government Finance, which approves governmental budgets, and the Indiana State Board of Accounts, which audits local government units, both pointed to a different law, one that governs referendum dollars: Indiana Code 20-40-3-5(b).

That law allows a school corporation to transfer referendum dollars “to a charter school, excluding a virtual charter school, that is located within the attendance area of the school corporation.”

The law does not mention preschools. According to the U.S. Department of Education, schools that meet the federal definition of a charter school may not charge tuition, which many private and nonprofit preschools, such as Covenant Christian and Penny Lane, do.

The Indiana Department of Education did not reply to requests for comment.

Schlesinger said she also wonders how the public school district could assure that private preschools that get the public dollars report back to the public with transparency. What's MCCSC's plan to monitor the use of the public dollars? she asked.

“I think they should be completely clear and transparent before the election but they have not shown a capacity to do that to date so I have little confidence that they have the ability to do that between now and Nov. 7," Schlesinger said.

“I expect to see smokescreens,” she said.

Boris Ladwig can be reached at [email protected]. Laura Lane can be reached at [email protected].


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