Indiana

Funding priorities

The education priority in Indiana grew from $11.11 billion of $31.6 billion total appropriations in FY 2016 to $11.75 billion of $39.2 billion total appropriations in FY 2020.¹ Total appropriations grew by 24.1 percent for the period; education appropriations grew by 5.8 percent. As a percent of total appropriations, education's share decreased from 35.2 percent in FY 2016 to 30.0 percent in FY 2020. Comparatively, the health and human services sector share increased from 43.8 percent in FY 2016 to 48.9 percent in FY 2020.

Within the education appropriation, the share dedicated to P-12 education was constant in FY 2016 and FY 2020. P-12 education received 82.6 percent of the appropriation that was $11.0 billion in FY 2016 and $11.7 billion in FY 2020. The higher education appropriation increased slightly from 17.2 percent in FY 2016 to 17.3 percent in FY 2020

P-12 education fall membership increased from 1,057,854 in FY 2016 to 1,060,618 in FY 2019.² The annualized growth rate was 1.1 percent compared with the 1.9 percent annualized growth rate of P-12 education funding during the period.³ Indiana's total expenditure per pupil was $11,145 compared to the $13,834 national average in FY 2017.⁴ Indiana ranked 40^th nationally.

Changes to funding formula for p-12

Indiana's State Tuition Support includes five grants: 1. Basic Grant, 2. Complexity Grant, 3. Honors Diploma Grant, 4. Special Education Grant, and 5. Career and Technical Education Grant.⁵ The Basic Grant aims to operationalize the state's foundation program. The foundation program amount grew from $4,569 per pupil in FY 2014 to $5,352 per pupil in FY 2019. The Complexity Grant compensates school districts for the additional costs of educating students living in poverty. The Complexity Grant is controversial because formula changes led to lower amounts of funding provided.⁶ The Honors Diploma Grant provides funding to school districts based on the number of honors diplomas awarded. The Honors Diploma Grant program has expanded to include a greater number of types of honors degrees and more funding per diploma. The Special Education Grant provides funding for special education services across four tiers of need. Funding increased substantially for the highest-need tier: students in programs for severe disabilities. The Career and Technical Education Grant varies with ratings based on assessments of Indiana's workforce needs and wages provided by different occupations.

All five of the grants combine to be State Tuition Support. As percentages of State Tuition Support, the three largest grants provided in FY 2019 were the Basic Grant (76.83 percent), Complexity Grant (10.67 percent), and Special Education Grant (8.14 percent).

Pressing state issues affecting p-12 funding

The most pressing issues affecting funding involve repercussions from the COVID-19 pandemic. Schools can anticipate state revenue declines and cuts to state aid. With the beginning of the 2020-2021 school year, online learning was a plausible mode of instruction, posing implications for state aid to schools. Specifically, school districts that did not offer in-person instruction were slated to receive 85 percent of their state aid.⁷ The reduction in aid was due to a state law designed to address virtual charter school funding. In consideration of the pandemic, the governor stepped-in with plans to preserve state aid at 100 percent.⁸ Also in response to the pandemic, remote learning grants were created to advance the development and delivery of remote learning.⁹

Other pressing issues included teacher recruitment, retention, compensation, and retirement plan funding.

Alternatives to traditional public school

Indiana has the Choice Scholarship Program that provides education vouchers. There were 326 Choice Scholarship participating schools that served 36,707 students in 2019-20.¹⁰ Choice Scholarship enrollment was 3.19 percent of statewide enrollment. Charter schools enrolled 44,965 students in 2019-20, which was 3.96 percent of statewide enrollment. Non-public school enrollment, excluding Choice Scholarship students, was 47,540 students or 4.19 percent of statewide...