Study: Indiana lags on school funding

Indiana has fallen far behind neighboring states when it comes to funding K-12 education, according to a study released this week by the Indiana State Teachers Association.

Robert Toutkoushian

It’s also fallen behind where it used to rank on education spending and teacher salaries. A few years ago, Indiana did a relatively good job of funding schools, but it has slipped markedly in state rankings.

And it will take a lot of money to catch up, the study finds. The state would have to increase K-12 spending by nearly $1.5 billion a year to catch up with surrounding states. It would have to boost spending by $3.3 billion a year to get back the ranking it enjoyed five years previously.

Two themes jump out from the study, conducted by University of Georgia higher-education professor Robert Toutkoushian. First, Indiana ranks behind most or all neighboring states in education spending and teacher salaries. And second, the state has dropped precipitously in state rankings in just the past five years; it’s now at or below average. Findings include:

• Indiana ranks 27th in K-12 spending per student and 21st in K-12 spending related to personal income earned in the state. Those figures are below neighboring states except Kentucky.
• It ranks 26th in average teacher salary even after adjusting for Indiana’s low cost of living. That’s lower than any other state in the region, including Kentucky.
• In the past five years, Indiana’s national rankings fell by 11 places on funding per student, 16 places on funding per personal income and seven places on average teacher salary.
• Adjusted for inflation, the average Indiana teacher salary declined by nearly 8 percent in the past five years.

The study suggests that, while Indiana’s education spending is low, teachers aren’t getting the same share of school funding that they are in average states. That’s partly because Indiana has fewer teachers per student than most states. Citing National Center for Education Statistics data, the study says Indiana has the second-lowest percentage of school employees who are teachers of any state.

That could lend support to House Bill 1003, an attempt by the legislature to encourage school districts to spend a larger share of their state dollars on teacher salaries and benefits.

How did Indiana go from being a state that funded schools well to one that funds them poorly?

Two things happened. Schools took a hit in the Great Recession, especially when Gov. Mitch Daniels cut K-12 funding by $300 million to balance the budget; and they’ve never recovered. Also, Indiana shifted in 2009 to having school operations funded by the state, not local property taxes. That left schools at the mercy of the General Assembly, which hasn’t been especially generous.

This year, Gov. Eric Holcomb and lawmakers say they’re putting a priority on school funding. But according to the study, their current plan – to increase K-12 spending by about $600 million over two years – doesn’t come close to what’s needed.

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