Indiana Nears Universal ‘School Choice’ in New Budget

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Indiana House Republicans secured a major win in the next two-year state budget with a voucher buildout that “school choice” advocates say makes the program virtually universal.

Expanded eligibility for Choice Scholarships — which allows families to receive vouchers to attend private schools — will raise the income ceiling to 400% of the amount required for a student to qualify for the federal free or reduced price lunch program, equal to about $220,000.

Currently, vouchers are limited to families that make less than 300% of the free or reduced lunch income eligibility level, meaning a family of four can make up to $154,000 annually.

Lawmakers said they’ll also eliminate the eight pathways currently in place — in addition to income requirements — that determine student eligibility for the voucher program.

It’s a stark change from the Senate GOP’s proposed budget, which did not make any changes to the existing Choice program. An unexpected $1.5 billion in revenue forecasted last gave lawmakers more to work with.

Senate Pro Tem Rodric Bray, R-Martinsville, said the voucher expansion is a “win” for many in his caucus, though.

“It’s a really big number,” he said of some senators’ hesitation about the expansion’s cost, but projected growth in state tax collections “provided some flexibility.”

Leaders touted an 8% increase in overall K-12 tuition support formula over the biennium. But the voucher funding pot grows 69% the first year and 14% the second year.

On the public education front, K-12 schools are projected to see average per student funding increases of 3.4% in the budget’s first year and 1.7% in the second — for a total additional $1.2 billion.

Supplemental “complexity” funding schools receive for low-income and at-risk students is also set to increase — up 5.5% in fiscal year 2024 and 1.2% in fiscal year 2025.

Special education grants would additionally increase by 5% in the 2024 fiscal year, and 5% again the next year.

Per-student grants to help educate English-learners will see the biggest boost over the biennium, increasing by 23%.

Republican-written state budgets in the last decade have raised school funding by an average of 1.5%. But the final budget draft drew criticism from Democrats who argue that school spending is not keeping up with inflation.

“Expanding vouchers to that magnitude is despicable from our perspective,” said Rep. Greg Porter, D-Indianapolis. “I don’t think that the traditional public schools are going to benefit. At this rate, they’re not able to even get inflationary dollars.”

Breaking down the voucher buildout

Under the GOP-backed budget, newly-eligible families will be able to use the vouchers — even if they’re already paying to send their kids to private school.

The broader eligibility provisions are projected to grow the voucher program from the current 53,500 students to some 95,000 students by 2025 — and more than double the state money spent on the Choice Scholarships.

After the expansion, the program could cost the state an estimated $500 million in fiscal year 2024, and another $600 million in the following fiscal year. The current state budget appropriates $240 million annually for vouchers.

Betsy Wiley, president & CEO of the Institute for Quality Education, said early number-crunching shows that only 3.5% of Hoosier families with school-aged kids would not qualify for vouchers under the new income limits.

“We would say it’s universal,” Wiley told the Indiana Capital Chronicle. “When this budget passes, I think Indiana will be the most educational choice-friendly state in the nation — across the board — between private school choice options for all Hoosier families, a robust charter environment, and district-to-district transfers. That literally will make any education available to any student in the state.”

Lawmakers use the 400% of reduced lunch threshold while other entitlement programs in the state use federal poverty level to determine eligibility. The new voucher guidelines equate to about 740% of the federal poverty level.

The move continues an aggressive program expansion that Republican lawmakers started in 2021, when the General Assembly raised the maximum income for a full voucher payment from the $4,800 cap previously in place.

Two years ago, state lawmakers additionally increased the value of vouchers so all participating families can get 90% of the amount of money per child that their neighborhood public school gets from the state.

Indiana voucher participation has grown rapidly since the program began in 2011, when less than 4,000 students used a Choice Scholarship. Wiley said she expects more families to embrace vouchers over the next two years, as well as an increase in the number of private and charter schools in the state.

“Making every educational option available to every family, you’re now really going to see the ability for families to get their students educated in what they think is the best learning environment for them,” she said. “The barriers are being removed.”

Wiley and other advocates blasted Senate Republicans earlier this month after the caucus nixed voucher expansion altogether.

Public schools officials and teachers unions remain opposed to Choice Scholarship expansions, however, arguing that its projected cost over two years would stymie K-12 education funding increases for public schools. Critics emphasize, too, that only the state’s wealthiest will benefit.

“At the beginning of session, I called for a hand up for all Hoosiers,” House Minority Leader Phil GiaQuinta, D-Fort Wayne said in a statement Wednesday. “This budget is a handout for the state’s wealthiest families and individuals. Most people think that state subsidies go to the poor, but in the GOP supermajority they go to top-earners.”

Changes from the earlier House and Senate budget plans

Although Senate Republicans aimed to eliminate existing Career and Technical Education (CTE) grants and instead redirect those dollars back into the school funding formula to be disturbed to public K-12 schools statewide, the final budget reverts back to the House’s plan.

High-value CTE grant amounts will increase 5% in Fiscal Year 2024 and remain available to Indiana schools on top of basic tuition support.

Republican budget writers further approved $15 million over the biennium for career scholarship accounts (CSAs), which will be similar to Indiana’s ESAs. Participating students can use the $5,000 CSAs to pay for apprenticeships, coursework, or certification.

But pushback from public school officials prompted changes to other K-12 funding mechanisms in the final budget plan.

That includes a separate, $160 million annual line item added by Senate Republicans to eliminate student textbook fees at K-12 public schools. House budget writers originally took a different approach, seeking to require schools to dip into their foundational funding to fully pay students’ curricular materials costs. The standalone funding remains in the budget, as-is.

Private school students who qualify for free or reduced lunch will also see their textbook fee waived, according to the budget.

Charter schools also win in the next state spending plan.

The budget will force school districts in Lake, Marion, St. Joseph and Vanderburgh counties — where a majority of the state’s charter schools are located — to provide a proportional share of an operating or school safety referendum adopted after June 30 with area charters. In other counties, sharing those funds would remain optional, at least for now.

The Charter and Innovation Network School Grants will additionally increase from $1,250 per average daily membership (ADM) to $1,400 at the start of the next fiscal year.

Those changes have drawn pushback from traditional school officials who argue that charters are not entitled to funding from local property taxpayers because those schools generally do not have the same expenses as their traditional public counterparts.

Indiana Capital Chronicle is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Contact Editor Niki Kelly for questions: info@indianacapitalchronicle.com. Follow Indiana Capital Chronicle on Facebook and Twitter.

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