Senate pares back voucher expansion

Hoosiers learn to be grateful for small favors when the legislature is in session. Take, for example, the budget the Indiana Senate is about to approve. When it comes to education, it could be worse.

Indiana Senate chamber

For one thing, the Senate would dial back the expansion of Indiana’s private school voucher program that was part of the House version of the budget. The House would raise eligibility for the program to 400% of the income cutoff for reduced-price school meals. That’s over seven times the federal poverty level, or about $220,000 for a four-person household next year.

The Senate budget leaves the income cap where it is: 300% of the reduced-price meal level, or about $166,000 for four people. That’s still two and a half times the state’s median household income.

House Republicans boasted that their budget would provide record funding increases for K-12 education, but over one-third of the increase would go to private schools via vouchers. The Senate would leave the voucher program alone, but the already generous program is still likely to grow even larger.  According to a Legislative Services Agency fiscal analysis, nearly 15% of the increase in state funding for K-12 schools – more than $116 million over two years – would go to private schools, which enroll about 7% of Indiana students.

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No more excuses to not fund schools

Indiana legislators will have to work hard to find excuses to underfund K-12 schools now that a state revenue forecast showed they will have a lot more money to spend.

The forecast, which dropped Thursday, says the state will take in about $2 billion more than anticipated in the two-year budget cycle that starts in July. That’s enough to make significant investments in education while doing a better job of meeting other state spending needs.

Lawmakers may argue otherwise, but the evidence is overwhelming that Indiana schools are poorly funded – and that the lack of money means Indiana teachers are underpaid compared to their peers.

• Ball State economist Michael Hicks has pointed out that Indiana’s per-pupil school spending has declined by 7% since 2010 in real terms. If we had just kept pace with inflation, he wrote, we would have spent an extra $1.3 billion on education last year.
• A recent school-funding analysis by the Shanker Institute and the Rutgers Graduate School of Education found that Indiana ranks near the bottom of the states for “fiscal effort,” the percentage of its economic capacity that it spends on schools.
• A teacher pay commission appointed by Gov. Eric Holcomb found that Indiana needs to find $600 million a year in revenue or savings to raise teacher salaries to the same level as surrounding states.
• A 2019 study commissioned by the Indiana State Teachers Association was even more pessimistic, concluding Indiana needs to spend $1.5 billion more per year to catch up.

Prior to Thursday’s revenue forecast, the Indiana House and Senate had approved separate versions of the budget that included only minimal increases in K-12 spending. The House budget would direct nearly 40% of the increase to an expansion of Indiana’s private school voucher program. The Senate version dialed back the voucher expansion but still committed significant funding to private schools.

The voucher expansion seems certain to happen, despite massive opposition from supporters of public schools. The only questions are how big it will be and how much it will cost.

But overall funding for K-12 education is now an open question. Advocates say the surprise jump in revenue should make this a no-brainer. The Indiana State Teachers Association is calling on budget writers to “go big on K-12 funding and do what’s best for our schools.” Assistant Democratic Senate Leader Eddie Melton said, “We are now within reach of implementing Gov. Holcomb’s teacher pay commission recommendation to put $600 million a year in the school funding formula.”

Republicans, who dominate the legislature, were already starting to drag their feet. They will claim the positive revenue forecast results from their own “fiscal discipline,” but it’s also due to the $1,400 stimulus checks and the additional child tax credits provided by the feds via the American Rescue Plan. And they won’t expect that to last.

Senate President Rod Bray said legislators must “be wary of the day when the economy begins to turn, because we dare not expect this economy to last forever.”

It’s the same old song from Indiana’s Republican politicians: When times are bad, we can’t spend money on schools, because we don’t have it. When times are good, we can’t spend money, because good times won’t last. You would almost think that education isn’t a priority.

Senate budget would dial back voucher expansion

Maybe those phone calls, emails and school board resolutions had an impact. Whatever the cause, the two-year state budget being advanced by the Indiana Senate is somewhat friendlier to public education than the budget approved in February by the House.

Most significantly, the Senate budget would partially roll back the ambitious expansion of Indiana’s private school voucher program that was included in the House budget.

Like the House budget, it would create a new K-12 education savings account program, but it would limit participation and costs. Also important: It would remove a House-approved cap on the complexity index, the funding formula feature that favors districts and schools with more disadvantaged students.

The Senate budget, approved Thursday by the Appropriations Committee, would increase annual state spending on K-12 schools by a little over $300 million over two years. That’s slightly more than the House budget but a far cry for the $1.5 billion annual increase needed for Indiana to catch up on teacher pay.

Under the House version of the budget, nearly 40% of increased K-12 funding would go to the new ESA program and to vouchers, which now serve about 3.5% of Hoosier students. Advocates for public schools raised the alarm. More than 170 school boards passed resolutions opposing the voucher expansion. Teachers, school boards and administrators lobbied against it.

The Senate budget would expand vouchers, but not as dramatically. Some voucher students would qualify at up to 225% of income limit for reduced-price school meals: $110,000 for a family of four. Higher-income voucher students would get increased state support. (Chalkbeat Indiana has the details).

It’s remarkable that the Senate budget, with an expansion of vouchers and only a modest increase in K-12 funding, could almost come as good news. But the House voucher expansion and ESA program were so egregious that the Senate plan seems mild by comparison.

The next step is for the full Senate to approve the budget. Then a conference committee will resolve differences between the House and Senate versions, on education and other spending. Where they end up is anyone’s guess. At the beginning of the session, leaders of the House and Senate seemed aligned on their pro-voucher rhetoric: Both sides called for “expanding choice” and “funding students, not systems.” The Senate now seems to have walked that back somewhat.

Meanwhile, supporters of public schools will and should continue to speak out against expanding vouchers. The fact that about 60% of Indiana school boards – not typically a partisan group – approved resolutions appealing to their legislators may be unprecedented. If the advocacy so far has had an effect, maybe legislators can be persuaded to shelve this ill-advised voucher expansion plan.

Another budget surprise

Indiana House Republicans want to double the grant that charter schools receive to pay for building, technology and transportation expenses from $500 to $1,000 per student.

The proposal is included in the amendment to the budget bill that the House Ways and Means Committee approved this week. Like an expansion of the voucher program, it didn’t go through the House Education Committee and wasn’t discussed as a change in education policy.

The state has been paying $15 million a year for the grant program. With the increase, it could pay $36 million in fiscal year 2020 and $41.4 million in fiscal year 2021 if the program is fully funded, according to a report by the Legislative Services Agency. That’s an additional $47.4 million over two years.

‘Education budget’ would shortchange public schools

Following up on the George Orwell theme from last month: War is Peace. Freedom is Slavery. Ignorance is Strength. And Gov. Mike Pence’s state budget proposal is an education budget.

OK, that’s a bit harsh. But public-school supporters probably rolled their eyes when they read that the governor announced his plan by declaring, “This is an education budget.”

First, at a time when Republicans and Democrats in the legislature are saying they want to make school funding a priority, Pence’s budget increases state spending on K-12 schools by just 2 percent in fiscal 2016 and 1 percent in 2017. That’s not enough to keep pace with inflation, let alone to help schools recover from the funding cuts they endured several years ago.

But the worst of it is that much of Pence’s funding increase wouldn’t go to regular public schools. He wants to give an extra $1,500 per pupil to all Indiana charter schools. That would cost $41 million a year at current charter enrollment – a big chunk of the proposed $134 million increase in fiscal 2016.

In other words, 30 percent of the new money will go to charter schools that serve less than 3 percent of Indiana’s public-school students.

What to do with Indiana’s budget surplus – if it’s real

The words “structural surplus” should raise a red flag for anyone who has followed the history of Indiana state government finances. But more on that later.

Let’s assume that Gov. Mitch Daniels knew what he was talking about when he said Indiana is running a structural surplus of more than $500 million – in other words, the budget is structured so that the state takes in at least a half-billion dollars more than it spends per year.

As a result of the state’s having spent less than it took in for several years, Indiana’s budget reserves reached $2.155 billion at the end of the 2011-12 fiscal year, state Auditor Tim Berry said this week.

Under a law approved by Indiana’s Republican-controlled legislature and signed by the governor, some of the excess will go to taxpayers in the form of a tax refund of about $100 per individual or $200 per couple, to be handed out next year. But there could be alternatives.

First, Daniels claims that implementing the federal Affordable Care Act could cost the state $50 million to $65 million a year to set up health insurance exchanges and another $200 million a year to expand Medicaid to cover the working poor. Those figures are likely to be worst-case estimates. But even if they’re accurate, implementing the law would take only half the structural surplus.

But this is an education blog, so let’s suggest a couple more options:

// Create a state-funded pre-kindergarten program at least for poor and at-risk children, something that 39 other states have already done.

Bennett to testify on education measures before Senate committee

Here’s a chance to catch Indiana Superintendent of Public Instruction Tony Bennett talking about his education agenda – live on the Internet.

Bennett is scheduled to testify at 4 p.m. Tuesday (March 22) before the Indiana Senate Appropriations Committee. Plans call for the committee hearing to be webcast at www.in.gov/legislative. (Click on the “Watch Indiana General Assembly Live” link at the upper-right corner).

Sen. Luke Kenley, R-Noblesville, who chairs the Appropriations Committee, has convened a series of hearings on the two-year state budget and related legislation. The notice for Tuesday says Bennett will speak about the school funding formula, remediation and testing, turnaround schools, charter schools, vouchers and collective bargaining – in other words, most of the education platform advocated by Bennett and Gov. Mitch Daniels.

That’s a lot of ground to cover in the one hour that Bennett is scheduled to be on the stand. Let’s hope Kenley allows plenty of questions from committee members.

The procedure here is sort of unusual. Normally the Indiana House approves a budget bill, and then it goes to the Senate, which passes a different version. And then it goes to a House-Senate conference committee, which works out a compromise.

But House Democrats walked out before the GOP-drafted House budget bill came down for a vote. The state constitution says that bills “raising revenue” must originate in the House. So Senate leaders apparently plan to take a House-approved bill and amend it to include the state budget.

Some lawmakers have suggested the Daniels-Bennett education proposals could end up in the budget bill – if, that is, the governor and superintendent can persuade Kenley that they should pass.