The House Republican version of the budget advanced out of the House Ways and Means Committee along party lines on Monday over the concerns of Democrats and critics — who flagged the relatively flat funding growth for Indiana’s schools.
Republicans touted 2% increases for education funding in both fiscal years for the state’s next two-year budget, a number that includes expanding “school choice” vouchers for even the wealthiest Hoosiers.
With that in mind, Democrats said increases to public schools — where the vast majority of Hoosiers are educated — would be closer to 1.3%.
“I have the distinct impression that the vouchers and charters, on the percentage basis, are going to get a big chunk of that 2%,” said Rep. Ed DeLaney, D-Indianapolis.
The state is projected to have some moderate revenue growth in the first year of the biennium but will be nearly flat in the second year, a cause for concern for budget writers. Much of that growth will be absorbed by growing Medicaid costs.
Additionally, the budget strikes a fund established to offset the costs of curricular materials for schools. Instead, it is rolled into the foundation of the school funding formula.
The Indiana Coalition for Public Education urged Hoosiers to question their representatives directly about the budget appropriations for public school children.
“We are deeply disappointed to see the state prioritize subsidizing the private school tuition for wealthy parents through universal vouchers over adequate funding for public education. The so-called increase in the education budget is smoke and mirrors,” the group shared in a statement. “When combined with bills that propose to cut property taxes or share them with charter schools, we are very alarmed.”
Prior to 2023, Indiana was one of only a few states to allow schools to charge families fees for textbooks and other educational materials.
Some schools reportedly spent more than their allotted amount on textbooks, dipping into other funds to cover shortfalls.
Additional hits to schools
House Republicans hewed close to Gov. Mike Braun’s introduced budget, nearly aligning on education priorities like vouchers. Scholarship accounts also saw a bump in funding.
Schools will see additional revenue hits as part of a state effort to reform property taxes. One proposal would require certain school districts share their property tax revenue with charter schools while the multi-faceted relief bill would limit when districts can put referendums on the ballot.
According to the state, 43% of all property taxes, or $3.7 billion, collected in 2021 went to public schools.
Another pending bill would direct schools to increase minimum teacher salaries from $40,000 to $45,000, without an additional state appropriation. Funding for salaries comes from tuition support and 44 school corporations didn’t meet the $45,000 threshold, according to a fiscal note.
Schools would also need to devote 65%, rather than the current 62%, of their state tuition support to teacher compensation.
The latest budget would also boost funding for virtual charter schools from 85% to 100%, identical to the funding of schools with brick-and-mortar facilities.
Overall, K-12 funding would drop to 46% of the budget, a decrease from previous cycles.
Democratic amendments
The committee accepted a Democratic amendment authored by Rep. Greg Porter that upped appropriations for the Native American Indian Affairs Commission, the Civil Rights Commission and the Minority Health Initiative. The first two had their funding slashed in the governor’s version of the budget, a cut that House Republicans kept in their budget.
The budget for the Minority Health Initiative went up from $3 million annually to $3.5 million.
But nine other Democratic additions failed to get enough support to be incorporated, including ones that would have eliminated taxes on breastfeeding equipment or increased funding for mass transit.
“The dollars are really, really tight … It’s a matter of priorities; it’s strictly that,” said Rep. Jeff Thompson, R-Lizton on one effort. “If we had the dollars, (it’s) something I might well consider.”
But while some efforts would have added an expense or taken away from Indiana’s revenue, the committee also rejected efforts to increase the state’s incoming dollars.
The proposal to increase the state’s cigarette tax by $2 had the support of Republican committee members, but the chair opposed the measure because an increase had been passed by the House multiple times only to die in the Senate.
All revenue-raising measures must start in the House.
Indiana currently charges just under $1 per pack of cigarettes, below every neighboring state and national average of $1.93, according to the American Lung Association.
“As of right now, I oppose this amendment,” said Thompson. “But going forward I like this idea (and) I hope it’s in the final version.”
The author, Indianapolis Democratic Rep. Ed DeLaney, withdrew the amendment but said he’d reintroduce an expanded version that includes other nicotine products on the floor later this week.
Other members pointed to Indiana’s alcohol tax, saying it also hadn’t increased in decades.
The budget now moves before the full House chamber for further consideration.
