Indiana

FUNDING PRIORITIES

In February of 2017, the Indiana state budget was cycling through the second year of its biennial budgeting process. Figures drawn from the Indiana State Budget Agency¹ revealed a $32 billion budget that was approved for fiscal year 2017. Of this $32 billion, the total amount dedicated to education was a little more than $11 billion, or 35% of the total budget. Elementary and secondary education received the lion's share of education funding. That share was $9.3 billion compared to higher education's $1.9 billion. As proportions of the total budget, elementary and secondary education received 29% while higher education received 6%.

Within the biennial period, one can see an emergent priority for adult learners funding. From fiscal years 2016 to 2017, this budget line increased from approximately $29 million to $37 million. Based on actual dollar measurements, the percentage increase was 26%. This increase was a dramatic spike relative to other line items. In fact, the other percentage increases were quite stable. For example, the Non-English Speaking Program percentage was 2%, Special Education appropriations were flat, and the Gifted and Talented Education Program and Early Intervention Program and Reading Diagnostic Assessment percentages dropped slightly. Whereas these funding priorities were focused on pupils, the major earmark that focused on teachers was the Teacher Performance Grant. This earmark increased from $30 million to $40 million and was the largest of all percentage increases. By broad comparison, the state's total budget increased 1% and education's total budget increased 2%.

Indiana's funding priorities are also expressed by the construction of its state aid to schools program. A foundation amount is used and enhanced by four different categorical grants.² The grants prioritize complexity, special education, honors, and career and technical education. Economically disadvantaged pupils are prioritized by the complexity grant. The state aid to schools total is referred to as State Tuition Support. In fiscal year 2017, the foundation was $5,088 per pupil and State Tuition Support was estimated at $6,863 per pupil.³ When State Tuition Support was combined with local revenues, $9,687 was the most recently published expenditure per pupil.⁴

CHANGES TO THE FUNDING FORMULA

The Indiana Center for Evaluation and Education Policy (CEEP) identified two major changes to the funding formula this biennium.⁵ The first major change was made to funding full-day kindergarten. In the past, formula funding partially funded the additional half-day of kindergarten with a categorical grant. For this biennium, full-day kindergarten is funded with a full 1.0 pupil weighting in Average Daily Membership (ADM). According to the Center's report, this means the Indiana General Assembly is fully funding full-day kindergarten.⁶ The second major change involves the Complexity Index that is used to calculate the complexity grant. The past index was based on free or reduced price lunch participation or textbook assistance aid. The new index is based on participation rates in the Supplemental Nutrition Assistance Program (SNAP), Temporary Assistance for Needy Families program (TANF), and foster care assistance.⁷ The net result has been a decline in complexity grants.⁸

PRESSING STATE ISSUES AFFECTING FUNDING

With the Great Recession ending so long ago, one would think recessionary effects on school funding also ended. To the contrary, Brittany Larkin and Spencer C. Weiler found that school funding programs in many states continue to suffer and that this suffering can be traced back to the Great Recession.⁹ The authors can add Indiana to their list of afflicted states. State Tuition Support per pupil projections are 4.2% below levels that were previously achieved.¹⁰ There might be some economic pressures contributing to this drop. Year-over-year tax receipts from 2015 to 2016 increased by $74 million, indicating a meager 0.41% growth rate.¹¹

FORCES DIVERTING FUNDS FROM TRADITIONAL PUBLIC SCHOOL DISTRICTS

Traditional public school districts are joined by charter schools to comprise Indiana's public school system. As of May 2017, there were 289 traditional public school districts and 82 charter schools.¹² Respective Average Daily Membership (ADM) was 985,396 and 39...