Indiana Catholic Conference
Victoria Arthur
March 17, 2019 // Diocese

House passes budget that includes new school choice incentives

Indiana Catholic Conference
Victoria Arthur

More Indiana families would have the opportunity to send their children to the school of their choice under the proposed biennial state budget that recently passed in the Indiana House of Representatives.

Changes to income eligibility requirements for private school vouchers and an increase in the current scholarship tax credit cap are among the provisions in the House budget supported by the Indiana Catholic Conference and other advocates for school choice. These small but significant adjustments would address gaps that have existed since the groundbreaking school choice legislation that led to the School Scholarship Tax Credit and the Indiana Choice Scholarship (voucher) programs in 2009 and 2011, respectively.

“Indiana has embraced a culture in which parents are empowered, as they should be, to make decisions as to how and where to educate their children,” said Glenn Tebbe, executive director of the ICC, the public policy voice of the Catholic Church in Indiana. “Our state’s school choice programs were designed to give all parents that ability. We applaud our lawmakers for continuing to look for ways to strengthen these programs so that more children may attend the school that is the best fit for them.”

The biggest proposed change in the House budget with regard to school choice is the creation of a third level of funding for the state’s voucher program in between the two tiers that are now in place. Currently, a family whose household income is up to 100 percent of the guidelines for free or reduced lunch is eligible to receive a voucher covering 90 percent of what the state would spend to educate the child at the public school corporation in which he or she resides. The voucher then may be applied toward tuition and fees at the private school the family selects. A family with a household income of up to 150 percent of reduced-lunch eligibility receives a 50 percent voucher.

Under the proposed budget, now under consideration by the Indiana Senate, a new tier of funding would be added in the middle of the two existing levels. Families with a household income of 125 percent of reduced-lunch eligibility requirements would receive a 70 percent voucher. This addition would offer new possibilities for middle-income parents who find themselves caught in the wide disparity between the two current levels, according to John Elcesser, executive director of the Indiana Non-Public Education Association.

“Some families are getting lost in the middle,” said Elcesser, whose organization represents the more than 7,000 teachers and close to 100,000 students at the state’s 400 private schools. The majority of those schools are religious, whether Catholic, Lutheran or nondenominational. “For many parents, the 50 percent voucher is not enough to make the school of their choice affordable.”

Elcesser also shares the concern of House members who say that the current voucher eligibility structure actually punishes parents for even modest gains in their income levels.

“In some regards, the current guidelines create a disincentive to move up in life,” said Rep. Robert Behning (R-Indianapolis), chairman of the House education committee and a longtime leader in school choice initiatives. “I frequently hear from parents who, because of a raise or a better job, suddenly are slightly over the threshold for the 90 percent voucher and then have to take a pretty big hit in the value of their children’s vouchers. These proposed changes would minimize the cliff effect that is a very real factor for many families.”

Creation of the new tier would cost approximately $4 million – a fraction of the $7.3 billion proposed budget, according to the budget’s primary author, Rep. Todd Huston (R-Fishers). Overall, House leadership is calling for $611 million more in spending on schools over the next two years.

In final discussion leading to the Feb. 25 vote on the House floor, Rep. Vernon Smith (D-Gary), challenged the need for any enhancements to the voucher program, saying that urban public schools should be the primary beneficiaries of additional funds.

“This is not equitable,” Smith said. “You should put the money where students need it the most, so that this becomes the land of opportunity that we say it is.”

Huston countered that 93.3 percent of the state’s K-12 dollars go to traditional public schools, which educate 92.2 percent of the state’s students. By contrast, he said, only 2.5 percent of the budget goes to students receiving vouchers, although they represent 3.6 percent of students statewide.

In addition, opponents of school choice should consider the overall savings that the voucher program provides the state, according to Caitlin Bell, vice president of policy and government affairs for the Institute for Quality Education. She points to figures released by the Indiana Department of Education, which reveal that in 2018-19, the state awarded $161.4 million in school vouchers. Bell said that if each of the 36,209 voucher students would have attended their local public school instead of a private school, the state would have spent more than $231.4 million in tuition support for those students.

“That’s a savings of $70 million for Indiana,” Bell said. “A school voucher is always less than what the state would have paid if the student attended their traditional public school.”

The House budget, which passed Feb. 25 by a vote of 65-32, included another incentive for school choice: an increase in the scholarship tax credit cap to $15 million from the current $14 million, with the possibility of additional increases in subsequent years. Indiana offers tax credits for individuals and corporations contributing to Scholarship Granting Organizations – nonprofits that distribute private school scholarships.

Tebbe and other advocates anticipate other possible developments before the end of the legislative session in late April. These include the addition of a second-semester window to allow families to apply for vouchers later in a school year, as well as changes in the sibling and foster children qualifications for voucher eligibility.

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