INDIANAPOLIS — An overhaul of education funding five years ago is devastating small districts, say rural Indiana lawmakers who are pushing for millions of dollars to keep schools in their communities open.

When lawmakers return to work next month, some key Republicans will argue that rural schools are essential to developing the economies of some of the state’s poorest communities.

“The closure of a rural school has a devastating impact on a small community,” said Rep. Bill Friend, R-Macy, the House speaker pro tem.

A proposal by Friend, coupled with a bill from Sen. Randy Head, R-Logansport, seek to restore “small schools grants,” which were eliminated when the Legislature overhauled the formula used to distribute about $9 billion in taxpayer money to 293 school districts.

The new formula ties education dollars to each student, eliminating cushions for schools with declining enrollments. It has been used to boost funding for a growing voucher program, which gives public money to private schools.

The change has been especially painful in rural districts, already cash strapped and losing students as populations declined.

“We’re going to find some way to help these small rural schools,” said Rep. Bob Cherry, R-Greenfield, who is vice-chairman of the House Ways and Means Committee and one of the key budget gatekeepers.

The cost of the now-defunct small schools grants was but a fraction of total education spending — about $36 million a year.

But, for small schools, their impact was immense.

The district in Culver, Ind., with 780 students, has seen $2.5 million disappear in five years. Its total budget is $8.5 million.

Culver Superintendent Chuck Kitchell said he made all of the cuts he could, eliminating staff and freezing salaries. But he has fixed costs locked into the town’s sole elementary school and high school. This year, healthcare premiums for staff went up 9 percent.

Kitchell said he fears less money will force the town to close its schools and send students to the next town, 10 miles away.

“We’re the hub of the community. We’re the gathering place,” he said. “People here still take pride in their schools.”

Legislation being put together by Friend and Head will make about 100 districts eligible for more funds, said Friend. Those are districts with fewer than 1,000 students.

Head and Friend began working on the proposal after meeting with school leaders from their mostly rural districts.

“We’ve got to find something to ease their financial pain,” Head said.

Opposition is likely from legislators who intentionally cast the new formula to reward large districts with growing numbers, which they view as a more efficient model. Small districts, in turn, are pressured to close and consolidate with neighboring districts. A handful already have.

Rural communities have seen this before. In 1959, the Legislature reorganized school districts to create bigger, more cost effective operations. The number of school corporations dropped from more than 900 to fewer than 300.

But Friend and other lawmakers say more consolidation in rural areas isn’t practical, if it means students spend long hours on school buses.

“When you get up here in farm country, it just isn’t practical or suitable,” he said. “Time and distance work against local schools.”

Maureen Hayden covers the Indiana Statehouse for CNHI’s newspapers and websites. Reach her at mhayden@cnhi.com. Follow her on Twitter @MaureenHayden.