Indiana lawmakers face tough decisions on education funding

This story was originally published by Chalkbeat Indiana.

Indiana lawmakers are preparing to write the next state budget, and as an economic surplus winds down, they face difficult decisions about what education programs to fund and how much to give them.

Many of the priorities related to K-12 that Republican leaders outlined for next year, like expanding school vouchers and limiting property tax hikes, come with a price tag. State advocacy organizations have their own funding goals for programs related to child care, summer school, and educating students learning English and those with disabilities.

But there’s bipartisan agreement on one thing: The 2025-27 budget will be tight. The likely reasons for that are a shortfall in the Medicaid budget, the end of federal COVID funding that supported various education and child care programs, and the effects of inflation.

A December revenue forecast that showed slightly higher state revenues than expected left fiscal leadership in both parties and “cautiously optimistic,” about the state’s economic outlook through 2027. Still, they’re tempering expectations.

“Our predicted revenue may not be enough to cover Medicaid’s needs or provide more than a 1% increase in K-12 funding,” said Democratic Rep. Greg Porter in a statement.

Here are some of the big issues to keep an eye on:

GOP lawmakers, Braun seek universal private school vouchers

Despite concerns about the state budget, Republican lawmakers and Governor-elect Mike Braun remain unequivocal about plans to expand Indiana’s school voucher program, which provides state funding for private school tuition.

The Choice Scholarship program is already available to nearly all Indiana families after legislators raised income caps and removed other requirements. But Braun campaigned on a promise to eliminate any income requirement and make the program universal—and legislative leadership is on board with the proposal.

“I’m not going to apologize that our caucus will be very supportive of universal vouchers,” said Rep. Bob Behning, chair of the House Education Committee at a December legislative conference. “I think letting parents make that choice as to what’s best for their son or daughter is the best way to move forward.”

One factor to watch will be whether GOP Sen. Ryan Mishler revives his bill from 2024 to expand the state’s Education Savings Accounts, or ESAs. Those provide state funding for students with disabilities to receive services outside their schools.

But that proposal would replace the Choice Scholarship by providing funding directly to all families to purchase classes and services from schools, teachers, and providers.

While Mishler’s proposal had support from the likes of Indiana State Treasurer Daniel Elliott, some choice advocates are dubious about the state abandoning its longstanding voucher program in favor of ESAs. Instead, they would like to see an expansion of the savings accounts that parents could use in addition to the Choice Scholarships.

Behning said House Republicans are committed to finding “the resources to make sure parents who have chosen an ESA have additional funding.”

Democratic Sen. David Niezgodski also proposed in December allowing students who have been victims of bullying to access ESA funds to attend the school of their choice.

Lawmakers seek pay raise to fill teacher vacancies

Advocates and state leaders agree that Indiana teachers should see a pay raise—but details on how much are less clear. Meanwhile, they say that offering professional benefits like parental leave would help attract teachers to the profession to fill vacancies.

Braun made raising teacher pay a key part of his education platform. And while he has not proposed a minimum salary, he said then-opponent Jennifer McCormick’s $60,000 minimum wasn’t enough. He has said that schools should dedicate more of their classroom funding that currently goes to facilities and overhead costs to salaries instead.

Other Republican leaders have highlighted a 2024 report showing that the average teacher salary in Indiana has reached $60,000, without commenting on whether they will move to raise the minimum.

Rather than seeking a new minimum salary, the Indiana State Teachers Association is advocating for salaries to align with inflation in order to close what the organization describes as a pay gap with other professions.

The teachers association and Braun are also pushing for parental leave for teachers, with the union advocating for 12 weeks of paid leave.

Property tax funding for schools might be capped

Braun’s priorities also include capping property tax increases at 2% for certain residents and at 3% for others, and restricting new property tax referendums to general elections and not primaries. Both of those proposals could affect funding for traditional public and some charter schools.

Republican lawmakers have also said property tax relief is a priority. But they’ve also expressed concern about the impact such changes could have on local government agencies like school districts, which supplement state aid with property taxes.

Raising state funding could make it less necessary for districts to levy referendums, Democratic lawmakers have countered.

“We want to make sure we appropriate state dollars to education so that governments don’t have to keep raising property taxes,” said House Democratic Leader Phil GiaQuinta.

One other factor to watch is a possible expansion of a 2023 law that required school districts in four counties to share some property tax dollars with charter schools.

Child care and pre-K face funding cliff

In a December budget committee hearing, representatives of the Family and Social Services Administration said the end of federal COVID aid could mean over 25,000 families will lose funding for child care unless the state supplements the funding.

The department already in December implemented a waitlist for families new to the Indiana Child Care Development Fund and On My Way Pre-K vouchers. At an average of $7,000 per child, the programs need an additional $140 million allocation just to support the families currently enrolled.

Samuel Snideman, vice president of government relations for United Way, said that funding the state’s child care programs creates a ripple effect.

“There’s an enormous economic multiplier that comes from investing in child care, because it’s what allows families to go to work and create tax revenue for you,” Snideman said.

Earlier this year, Republican leaders rejected calls from Democrats to establish universal preschool, especially as a means to improve early literacy.

Curriculum cost transparency considered

In 2023, Indiana abolished textbook and curriculum fees for families at public schools, as well as for families from low-income backgrounds whose students attend private schools.

The state reimbursed districts an average of $158.21 per student, according to the Department of Education, for a total allocation of around $159 million to public schools and $900,000 to private schools. But some school districts have reported a shortfall, requiring them to cover the total fees with their general budgets.

State leaders have said they want to bring more transparency to textbook and curriculum fees with a dashboard to allow comparisons of costs between school districts.

Schools need funding for students with disabilities, English learners

In budget hearings in December, Jenner highlighted the growth in Indiana’s English learner population, which has doubled since 2016-17 to more than 103,000 students this school year. It’s the fastest-growing student population in the state, according to Jenner.

But Jenner said it’s not just the growth of the population, but students’ academic needs: English learner and Hispanic students have shown ongoing academic decline even as other populations have recovered since COVID.

The number of students in special education has also grown in Indiana, along with both the per-pupil costs and the special education excess funding that covers services that schools can’t provide.

Help sought for summer school funding

The Department of Education has signaled that it may seek help from the state legislature to prioritize its funding for summer school, especially as a new third grade reading law goes into effect that will require more students to take reading courses over the summer.

Last year, over $4 million of the department’s $18 million allocation for summer school was spent on physical, health, and wellness education. Going forward, state leaders have indicated that they may want to reprioritize those dollars.

Department officials also said they may seek continued funding for the Summer Learning Labs program. The program was funded in part by federal relief dollars that have now expired.

ISTA highlights counseling for student mental health

Ongoing student mental health needs along with the state’s new diploma requirements mean more work for Indiana counselors, according to a report on the profession. Advocates say it’s critical not just to hire more counselors, but to reduce the tasks that counselors are responsible for.

Both the Indiana State Teachers Association and the Indiana Counselors Association want counselors to have fewer non-counseling tasks, such as attendance and proctoring duties.

Senate Education Chair Jeff Raatz said he would bring forward a bill to reduce some of those responsibilities, possibly by allowing schools to hire community members to do tasks like lunch monitoring. Raatz earlier this year co-sponsored a failed bill to allow chaplains to work as counselors in public schools, but did not indicate that the proposal would be renewed in 2025.

Other proposals to watch

• Greater accountability for schools that don’t report violence against school staff, a priority this year for ISTA.
• Cuts to the Frank O’Bannon Scholarship already proposed by the Commission on Higher Education. Lawmakers must approve these or add money to the pot.
• A proposal to deregulate education by holding schools accountable for outcomes, rather than inputs, per Behning, the House Education Committee chair.
• More transportation sharing between traditional public, charter, and private schools.

Chalkbeat Indiana is a nonprofit news site covering educational change in public schools.