Indiana Gov. Mitch Daniels’ order to cut at least $300 million from the state’s education budget means local school corporations will be forced to make some tough spending choices in the near future. 

 But Daniels made it clear that laying off teachers should be a final resort in the cost-cutting process. That’s good news for teachers and their students, and the Indiana State Teachers Association should feel fortunate. 

 But the union is already whining about possible salary cuts, arguing that the state doesn’t respect teachers’ professionalism. Given Daniels’ very reasonable approach to the funding problem, that was a very bad chord for the union to strike. 

 The ordered spending cuts are based on recent reports showing that the state will fall about $1.8 billion short of its projected revenues over the next year, according to the Indianapolis Star. 

 That means tough times all around, especially for the state’s schools. 

 “K-12 spending is half the entire state budget, and it will have to contribute something to keeping us in the black,” Daniels told the Star. 

 Now’s the time for school corporations across the state to seriously look at trimming the fat.  Fortunately, the State Board of Education and Daniels have targeted teacher salaries for the budget ax, rather than teachers’ jobs. 

 That seems fair to us, especially considering “that in a year in which the average Hoosier income went down 2.5 percent, the average teacher salary will go up more than 4 percent,” according to Daniels’ comments in the Star. 

 Of course the ISTA is already up in arms and spouting nonsense. 

 “I find it a little bit upsetting to me that teacher salaries are perceived to be too high and we must remember that a teacher is a professional,” ISTA’s Nate Schnellenberger told WISH TV-8.

 Chill out, Nate. Don’t be so defensive.

 Nobody, including EAGF, is disputing the professionalism of teachers. We find it curious that professionals bargain collectively, yet we realize it’s not an easy job.

 But Indiana teachers should be relieved that their jobs aren’t on the line. All the state wants to do is halt the teachers’ yearly, built-in raises, so schools can afford to keep them in the classroom.

 The ISTA needs to realize, the sooner the better, that it can’t have it both ways. Either work with the state to maintain educational quality and teaching jobs, or fight for raises that likely will lead to job cuts.

 We just hope, for the sake of Indiana’s children, that the ISTA will grasp the reality of the financial situation and help contribute to the solution.

We hate to say we told you so, but we told you so.

    In a video released statewide a few months ago, Fox News analyst Dick Morris and Education Action Group Foundation Vice President Kyle Olson warned Indiana taxpayers that the Indiana State Teachers Association would attempt to stick them with the bill for the financial mess the union created.

    “We remain concerned for the taxpayers of the State of Indiana that they will be left on the hook for tens of millions of dollars caused by union incompetence,” Olson said in the video. 

     We sure called that one. Here’s what happened, in a nutshell:

    ISTA Trust, the insurance wing of the ISTA, convinced about 30 school corporations around the state to enroll in a special  insurance pool for employees. Under the program, unused premiums were supposed to be repaid to the schools.

    But somewhere along the line, ISTA lost track of about $23 million owed to those schools. According to officials, this was probably the result of comingling those funds with other union dollars that were lost in a series of bad financial investments.

     ISTA Trust’s sole trustee, Ed Sullivan, is currently trying to cut deals with the victimized school corporations, offering to reimburse them about 30 cents on the dollar.

   The offer is ridiculous, to put it lightly. Do ISTA officials honestly expect the state’s struggling schools, and the taxpayers that support them, to pick up the tab for union incompentence? Apparently so.

   But the school corporations may be forced to consider the offer, or risk recovering nothing at all if ISTA Trust seeks bankruptcy protection. Several school corporations are apparently considering a lawsuit to recover their money. We wish them well in that endeavor.

   There is an answer to this unfortunate situation. We believe the well-financed National Education Association, which took over management of the sinking ISTA in May, should pull out its checkbook and fully reimburse the schools that were ripped off, even if it takes a few years.

    The ISTA clearly lacks the assets to correct the situation, while the NEA reported net assets of $142 million last year.

   It’s becoming increasingly clear by the day that union caused this mess by grossly mismanaging its own funds, as well as the money that was supposed to be reimbursed to schools.

    Indiana Secretary of State Todd Rokita last week filed a lawsuit in Marion County Superior Court accusing the ISTA, the National Education Association and other related financial institutions of committing a slew of securities violations.

    The lawsuit alleges, among other things, that the ISTA neglected to register the long-term health and disability arrangements as securities, acted as paid investment advisors to the schools without authority, and misrepresented the nature of the investments it made.

   The money was invested in a “highly speculative manner unsuitable for the purchasers,” the lawsuit alleges.

    Even the ISTA is suing those who are allegedly responsible for the mess  – former ISTA executive director Warren L. Williams and former trust director Robert Frankel – for what Sullivan called “terrible investments, horrible fiscal behavior,” according to the Indianapolis Star.

   The NEA, which is the parent organization of the ISTA, should reinforce its supposed commitment to education by taking financial responsibility for this mess, the sooner the better.  And we hope that Indiana schools, and schools throughout the nation, learn from this fiasco.

    Unions aren’t insurance companies and can’t be expected to function like them. Schools are much better off contracting with private insurance carriers that know what they’re doing.