A budget glass half empty

The two-year budget approved Thursday by the Indiana legislature is unquestionably good news for Hoosier students and teachers. Thanks to a surprisingly positive revenue forecast, lawmakers had $2 billion more to spend than expected. They wisely directed the lion’s share to education.

The budget adds $1 billion for K-12 schools over the next two years. It increases “tuition support,” the state funding that pays for most school operations, by 4.6% in 2021-22 and by 4.3% in 2022-23. It includes $150 million for COVID-19 learning recovery grants and $600 million to bolster a teacher pension fund.

The legislature looked to Gov. Eric Holcomb’s Next Level Teacher Compensation Commission for guidance on raising teacher pay – after largely ignoring the panel’s December 2020 report throughout the session. The report called for raising the starting salary for teachers to at least $40,000 and boosting overall teacher pay until it matches other Midwestern states.

But it’s easy to look closely at this budget and see the glass as half empty, not half full.

While Holcomb and Republican legislative leaders are praising the budget as “transformational” and suggesting it solves Indiana’s K-12 funding woes, the truth isn’t that rosy. A preliminary analysis by Ball State economist Michael Hicks finds the budget gets Indiana’s inflation-adjusted school spending more than halfway back to where it was a decade ago, but not nearly all the way.

Legislators’ summary of the budget says it “fulfills the $600 million increased annual investment in public schools recommended by the Teacher Compensation Commission.” That’s misleading. The commission recommended a $600 annual increase in spending on teacher salaries. The budget increases school funding by that amount, but some of the increase will have to go to other expenses.

The budget also nods to the commission with a requirement that school districts spend at least 45% of their state funding total on teacher salaries, unless they can justify a lower number to the Indiana Department of Education. The commission found (in Appendix 15) that over one-third of districts fall short of that target, and “small school corporations are more likely to face challenges” reaching it.

My main beef with the budget is that it radically expands Indiana’s already radical private school voucher program and creates a new, voucher-like K-12 education savings account program.

The positive revenue report means the voucher expansion will start this July rather than being phased in over two years. Families that make up to 300% of the limit for reduced-price school meals – about $145,000 for a family of four – will qualify for tuition vouchers worth about $5,500 per child or more.

Nearly all voucher schools are religious schools, and they are largely unregulated. They can turn away students on grounds of religion, disability, language, sexual orientation or gender identity. They can, and do, use tax dollars to teach religious dogma. They can teach that humans shared the earth with dinosaurs, enslaved people were happy, and the New Deal was a “half-way house to Communism.”

The education savings account program would provide a comparable amount for students with disabilities to use on private school tuition, tutoring, lessons or a wide range of services. As Vic Smith of the Indiana Coalition for Public Education writes, there are almost no guardrails to prevent abuse of this program, which would be run by the state treasurer, not the Department of Education.

The cost of vouchers and ESA’s is considerable, but the problem was never that we can’t afford them. The problem is that they are bad policies that undermine public education. And once adopted, vouchers and ESA’s become an entitlement; they won’t be rolled back, even in a future recession.

Finally, the budget that Holcomb and the legislators are celebrating would not be possible without the American Rescue Plan brought to us by President Joe Biden and the Democratic-controlled Congress The state budget includes $3 billion in one-time spending paid for with federal stimulus funds. And, as economists made clear in last week’s revenue forecast presentation, the federal spending is boosting Indiana’s economy, leading to more tax payments and more state revenue.

Not one Indiana Republican senator or representative voted for the American Rescue Plan. If they had their way, we wouldn’t have this positive state budget. But you won’t hear Statehouse Republicans say that.