Apr 26, 2023 - Education

Vouchers expanded in final budget deal

Photo illustration of Indiana state capitol building, with radiating lines.

Illustration: Allie Carl/Axios

Indiana's controversial private school voucher program — already one of the largest in the country — will see a massive expansion over the next two years as lawmakers raise the income-eligibility to families making far above the state's average income.

Driving the news: Members of the House and Senate GOP caucuses released their compromise budget deal Wednesday afternoon.

  • The publicly-funded voucher program expansion had been a sticking point between the two chambers, but a surprise increase in state funding made it harder for the Senate to resist the House's call to expand the program to more families.
  • Under the budget deal, the income eligibility threshold increases to more than $220,000 for a family of four, and all other pathway requirements are eliminated.
  • The change is expected to add 30,000 more students in the first year and another 10,000 in the second — a 75% increase in two years.

Catch up fast: Last week, lawmakers got an updated revenue forecast

that showed the state had $1.5 billion more than expected to spend over the next two years.

The other side: Rep. Greg Porter, an Indianapolis Democrat, said the budget underfunds public health funding and traditional public schools.

  • "An expansion of vouchers of that magnitude is despicable, from my perspective," Porter said.

By the numbers: A little less than half of the $44.5 billion biennial budget goes toward K-12 schools.

  • It increases the tuition support formula by 6% in the first year and another 2% in the second and eliminates fees for textbooks and curricular materials in a separate line item — a proposal of Gov. Eric Holcomb's that schools had rallied around.
  • The revenue forecast enabled budget writers to increase funding for several key mental and public health initiatives — including a $50 million annual appropriation for community mental health services.
  • The budget speeds up by planned income tax cuts, lowering the state's rate to 2.9% by 2027 — two years early.
  • Some funding was restored for Martin University, the state's only predominantly Black institution. Although the House had proposed $10 million for the Indianapolis-based institution, the Senate set aside no money for it. Martin gets $5 million in the final budget deal.

The bottom line: Although the revenue increase made it easier to fund priorities from both chambers, the House looks to be the big winner in the final deal.

  • The compromise budget looks much like the original House proposal, with some additional investment to pay down one of the state's teacher pension plans — a Senate priority.

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