10 Shocking Facts about School Choice and Education Funding in Indiana
1. Our tax dollars pay for students to attend private schools in Indiana via government vouchers —over $1 billion of sales, use, and income taxes since 2011. Originally designed to help “rescue” poor kids from failing schools, vouchers increasingly go to students who are white, suburban, and middle class.
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Yes. Since 2011 to 2023, about $1.72 billion in tax dollars have been sent to private schools to help subsidize tuition for children. These tax dollars, since 2008, come from sales, use, and income taxes. The bulk of public education is paid for by these tax buckets (not property tax).
Why do our tax dollars pay for students to attend private schools? Back in 2011, legislators created vouchers. The idea was sold in the Indiana Statehouse as a way to save low-income children from “failing” schools (“failing schools” is a label created by the state…marketing is slick). But that group of low-income kids was just a gateway. A toehold.
Between 2011 and spring 2023, eligibility tracks to obtain vouchers for private school grew and expanded to eight tracks:
And then in 2021 the state eliminated the partial voucher for higher income earners (only full vouchers are now available) and expanded the income limits, which lead to one of the largest jumps in voucher use. The state spend on vouchers increased 41% in one year from 2020-21 to 2021-22.
In 2023 the state created an almost universal voucher system, eliminating the eligibility tracks listed above and raised the income limits even further, allowing over 97% of households to qualify for vouchers. Taxpayers will have to wait and see how much this will really costs. In the past, the state estimates were often less than reality.
Here is the breakdown of spend since vouchers came into effect:
2011–12 $15,514,025
2012–13 $36,042,923
2013–14 $78,593,340
2014–15 $112,707,313
2015–16 $131,514,682
2016–17 $142,193,700
2017–18 $151,366,354
2018-19 $158,837,890
2019-20 $172,776,490
2020-21 $170,685,142
2021-22 $241,371,212
2022-23 $311,814,032
2023-24 $439,051,454
TOTAL $2,162,468,557
Why do our tax dollars pay for students to attend private schools? Back in 2011, legislators created vouchers. The idea was sold in the Indiana Statehouse as a way to save low-income children from “failing” schools (“failing schools” is a label created by the state…marketing is slick). But that group of low-income kids was just a gateway. A toehold.
Between 2011 and spring 2023, eligibility tracks to obtain vouchers for private school grew and expanded to eight tracks:
- Special Education Track
- Pre-K Track
- "F" Public School Track
- Previous Choice Scholarship Student Track
- Previous SGO Track
- Foster Track
- Two Semesters in a Public School Track
- Sibling Track
And then in 2021 the state eliminated the partial voucher for higher income earners (only full vouchers are now available) and expanded the income limits, which lead to one of the largest jumps in voucher use. The state spend on vouchers increased 41% in one year from 2020-21 to 2021-22.
In 2023 the state created an almost universal voucher system, eliminating the eligibility tracks listed above and raised the income limits even further, allowing over 97% of households to qualify for vouchers. Taxpayers will have to wait and see how much this will really costs. In the past, the state estimates were often less than reality.
Here is the breakdown of spend since vouchers came into effect:
2011–12 $15,514,025
2012–13 $36,042,923
2013–14 $78,593,340
2014–15 $112,707,313
2015–16 $131,514,682
2016–17 $142,193,700
2017–18 $151,366,354
2018-19 $158,837,890
2019-20 $172,776,490
2020-21 $170,685,142
2021-22 $241,371,212
2022-23 $311,814,032
2023-24 $439,051,454
TOTAL $2,162,468,557
Indiana has been working hard at offering the largest voucher system in the country by continually expanding access to this program. Unfortunately, we're in a moment of a national movement of voucher expansion. Arizona and Florida are also fighting for number one. Nine states now offer universal voucher programs.
But one thing that still holds: The population that uses vouchers has become more white, more suburban, and more middle class since its inception (Indiana vouchers were created in 2011 on the premise that they would save low-income kids from failing schools). Below is a sample of some numbers from the IDOE Choice Scholarship annual reports.
More white.
In 2011-12, 46.38% of choice participants were white. In 2023-24 it was 64.34%
But one thing that still holds: The population that uses vouchers has become more white, more suburban, and more middle class since its inception (Indiana vouchers were created in 2011 on the premise that they would save low-income kids from failing schools). Below is a sample of some numbers from the IDOE Choice Scholarship annual reports.
More white.
In 2011-12, 46.38% of choice participants were white. In 2023-24 it was 64.34%
More suburban.
In 2011-12, 16% of choice participants were from the suburbs. In 2023-24 it was 31.7%.
In 2011-12, 16% of choice participants were from the suburbs. In 2023-24 it was 31.7%.
More middle class.
In 2011-12, 3.67% of choice participants were from households that earned over $100,000 a year. In 2023-24 it was 45.17%.
In 2011-12, 3.67% of choice participants were from households that earned over $100,000 a year. In 2023-24 it was 45.17%.
*In addition to household income and household size, the Choice Scholarship Program utilizes the Choice Scholarship Eligibility System (CSES) and legal foster child status as verification that Choice students satisfy the income eligibility aspect of the application process. This data only tracks about 85% of voucher users that use household income to verify voucher eligibility.
Source: IDOE voucher annual reports, accessed June 2024.
Read more on Indiana's vouchers in this series published in the Washington Post.
Data from voucher annual reports combined into a spreadsheet can be accessed here. It is forever a work in progress.
Source: IDOE voucher annual reports, accessed June 2024.
Read more on Indiana's vouchers in this series published in the Washington Post.
Data from voucher annual reports combined into a spreadsheet can be accessed here. It is forever a work in progress.
2. Hoosiers never voted for school choice—vouchers, charters, educational scholarship accounts, tax credit scholarships. But organizations backed by billionaires helped legislators pave the way for school choice in Indiana with the goal of pushing more and more public dollars to private institutions.
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It’s true. The public was never asked to vote on sending dollars earmarked for traditional public schools to charters, private schools, private educational services. It all was decided at the Statehouse.
Charter school legislation was enacted in 2001 in Indiana and later expanded.. That bill was introduced by Theresa Lubbers (R). The program has been adjusted through the years via additional legislation.
Tax credit scholarship (SGO Scholarships) legislation was first enacted in 2009. SB 528 was authored by Carlin Yoder (R). It was then rolled into the budget, HEA 1001. The program has been regularly expanded via additional legislation. It is a type of voucher. It involves tax credits for donations to private school scholarship granting organizations. The tax credit is 50% of the donated amount to the private organization. Advocates have asked for public schools via foundations to also qualify. As of 2022, they have not.
Voucher (Indiana Choice Scholarship Program) legislation was enacted in 2011. Indiana School Scholarship Act (ISSA) HEA 1003 was authored by Bob Behning (R) and Todd Huston (R). The program has been regularly expanded via additional legislation.
Education scholarship accounts (ESAs), another type of voucher, began in 2022-2023 school year. It was introduced in a separate bill (HB 1005) authored by Bob Behning, but was later rolled into the budget, HEA 1001. School boards throughout the state voiced their opposition to the proposed privatization program. For now (as of 2024), special education students and their siblings have access to ESAs.
Charter school legislation was enacted in 2001 in Indiana and later expanded.. That bill was introduced by Theresa Lubbers (R). The program has been adjusted through the years via additional legislation.
Tax credit scholarship (SGO Scholarships) legislation was first enacted in 2009. SB 528 was authored by Carlin Yoder (R). It was then rolled into the budget, HEA 1001. The program has been regularly expanded via additional legislation. It is a type of voucher. It involves tax credits for donations to private school scholarship granting organizations. The tax credit is 50% of the donated amount to the private organization. Advocates have asked for public schools via foundations to also qualify. As of 2022, they have not.
Voucher (Indiana Choice Scholarship Program) legislation was enacted in 2011. Indiana School Scholarship Act (ISSA) HEA 1003 was authored by Bob Behning (R) and Todd Huston (R). The program has been regularly expanded via additional legislation.
Education scholarship accounts (ESAs), another type of voucher, began in 2022-2023 school year. It was introduced in a separate bill (HB 1005) authored by Bob Behning, but was later rolled into the budget, HEA 1001. School boards throughout the state voiced their opposition to the proposed privatization program. For now (as of 2024), special education students and their siblings have access to ESAs.
3. State dollars for private schools and charters come out of the same budget that pays for public schools. No additional funds were added to help pay for more schools. Instead, in Indiana, the “money follows the child.”
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Yes. Paying for all these additional charter schools and voucher scholarships for private schools comes from the same tuition support budget. There was no new money added for these school models as funding these programs was built upon the idea that they would save the state money (code for transfer the spending to the pockets of the caregivers ... and, sadly, debt collectors).
Growth in Indiana’s budget for public school personnel has not kept up with growth in its general fund or even inflation. As of October of 2021, the current budget for public school personnel was estimated to be $295 million behind the 2009-10 budget when inflation is taken into account. The 2021-2022 biennial budget, when passed, had significantly made up the difference; however, recent spikes in inflation have eaten into those gains.
The total education budget, which includes higher education, is estimated to be short $1.5 million. Put another way: from 2010 to 2019, state spending on education shrank from 3.24 percent of our Gross Domestic Product to 2.76 percent. Education spending is the MOST significant factor that influences quality of life.
The "money follows the child"/"backpack funding"/"student-based budgeting" funding model was created under Mitch Daniels. It is one of the many pieces used to help privatize public education.
Growth in Indiana’s budget for public school personnel has not kept up with growth in its general fund or even inflation. As of October of 2021, the current budget for public school personnel was estimated to be $295 million behind the 2009-10 budget when inflation is taken into account. The 2021-2022 biennial budget, when passed, had significantly made up the difference; however, recent spikes in inflation have eaten into those gains.
The total education budget, which includes higher education, is estimated to be short $1.5 million. Put another way: from 2010 to 2019, state spending on education shrank from 3.24 percent of our Gross Domestic Product to 2.76 percent. Education spending is the MOST significant factor that influences quality of life.
The "money follows the child"/"backpack funding"/"student-based budgeting" funding model was created under Mitch Daniels. It is one of the many pieces used to help privatize public education.
4. To make matters worse, since the Great Recession, school funding from the state has not kept up with the rate of inflation
-$232 million less in 2023-2024 compared to 2009–2010.
-$232 million less in 2023-2024 compared to 2009–2010.
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There were big changes in how K-12 was funded back in 2009 with the basic belief that a market principle of competition would improve education outcomes and drive down costs (remember, we're talking about children, not coffeemakers for sale on Amazon). Under the guise of property tax reform, the state government took control of school funding by legislating that only the state would pay towards the general fund, while giving localities the responsibility for paying for debt service, capital projects, transportation, and bus replacement. Since 2009 only sales tax, income tax, and use tax fund the general public education fund/tuition support fund, putting it at the whim of the market (property tax is steady, consumer spend and jobs numbers fluctuate, hence why Indiana needs a strong rainy day fund). In addition, property taxes were capped so that they could not exceed 1 percent of a home’s assessed value. The poorer the town, the less money the district could raise. On top of that, the government created private school vouchers, resulting in the funding of a separate education system under the same budget. That program has expanded to more and more of the public year after year. And there are also charter schools that are authorized by outside district entities, often, non-local. Yet another education system being funded under the same budget.
Below is a breakdown of tuition support through the years since 2009-10. In 2021, the CPI rate of change since 2009-10 was estimated to be 27.64%. The tuition support fund has only grown 23.04%, resulting in a deficit of $295+ million.
Below is a breakdown of tuition support through the years since 2009-10. In 2021, the CPI rate of change since 2009-10 was estimated to be 27.64%. The tuition support fund has only grown 23.04%, resulting in a deficit of $295+ million.
Source: https://drphildowns.com/node/48
5. Does your school district have an operational referendum, large class sizes, limited course selections, and/or has it closed one or more of its schools in the past decade? It’s most likely due to an overall funding shortage from the state in addition to public dollars going to charter and private schools.
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See fact 4 for a summary. But also add to it a $300 million cut by the statehouse in 2009 under Mitch "The Knife" Daniels in the wake of the Great Recession. Just months later, $300 million was found. It was never returned to the education budget. In response to the $300 million cut, districts across the state had to make difficult cuts. In MCCSC, for example, $5.7 million was the loss. To avoid a fiscal cliff, the district eliminated programs and fired a number of teachers. Class sizes ballooned. Since 2009, more than 40 percent of the school districts in Indiana have put a referendum on the ballot. And Indiana's Legislative Services Agency has found in a 2019 study that schools with operational referendum are able to pay their teachers more.
6. Almost all private schools receiving vouchers in Indiana are religious. Unlike public schools, private schools are not required to make their budgets, curriculum, hiring practices, or teacher qualifications public. State funds to private schools mean a loss of accountability to the public for how education funding is spent.
7. Inadequate oversight of charters opens the door to for-profit schemes and fraud. Recently, two Indiana virtual charter schools defrauded the state of over $86 million. The $86 million has never been paid back to the state educational fund.
8. Our tax dollars are being used to perpetuate segregation when they fund private and charter schools. These schools can’t and some won’t serve all. Private schools can discriminate based on religion and sexual identity. Charter schools serve a limited number of self-selected families. However, public schools must serve all.
9. Teachers in charter and private schools do not have to comply with the same Indiana education licensure standards to teach as public school teachers.
10. There are now four different types of vouchers in Indiana. The original voucher – Indiana Choice Scholarship – is near universal with a family of four earning $231k a year qualifying for a voucher.
7. Inadequate oversight of charters opens the door to for-profit schemes and fraud. Recently, two Indiana virtual charter schools defrauded the state of over $86 million. The $86 million has never been paid back to the state educational fund.
8. Our tax dollars are being used to perpetuate segregation when they fund private and charter schools. These schools can’t and some won’t serve all. Private schools can discriminate based on religion and sexual identity. Charter schools serve a limited number of self-selected families. However, public schools must serve all.
9. Teachers in charter and private schools do not have to comply with the same Indiana education licensure standards to teach as public school teachers.
10. There are now four different types of vouchers in Indiana. The original voucher – Indiana Choice Scholarship – is near universal with a family of four earning $231k a year qualifying for a voucher.
School choice has been marketed as a method to increase access to educational options. This argument begins to break down, however, when you ask the questions, Access for whom? And to what? Are we further fragmenting our communities? Is it possible to afford more schools on less funding?
10 Reasons Why Public Schools Are the Best Choice
- Public schools are the heart of the community. They do so much more than just teach students. Football, basketball, musicals, emergency shelter, community events, and traditions all happen at your local public schools.
- Public schools are a community investment. Strong public schools are the backbone of a community, preparing students year after year to become good citizens who make positive contributions. Businesses and people seek to settle in communities with strong public schools.
- Public schools have more educational choice. Almost 90 percent of students in Indiana attend public schools. And most districts are larger than any private or charter school. Size allows them to offer a broad array of academic and extracurricular choices.
- Public schools are accountable to the public. The majority are represented by a publicly elected school board.
- Public schools are dependable. They can’t close at a moment’s notice unlike charters and private schools.
- Public schools are diverse. They must accept all students and legally are not allowed to discriminate. There are over 290 languages spoken by students in Indiana’s public schools.
- Public teachers are highly qualified educators. They must be certified by the state and continue their certification and advanced degrees throughout their career.
- Transportation is free. Public schools offer free transportation to get your child to the school they are attending.
- Free and reduced lunch. Almost 50% of all Hoosier students receive free and reduced lunch in public schools. Not all charter and private schools provide a free/reduced lunch for kids who qualify.
- Best value for your money. Public schools are funded using state, federal, and local funds. Funds are pooled and distributed to serve all students in the school—from gifted and talented to special education, from gym and art to music and library, from therapists and reading specialists to nurses and custodians.
Terms
- Charter School: A school that operates on a contract and is authorized by an entity such as a mayor’s office or university. The authorizer need not be local. A charter school receives state funding but operates independently of the local public school district. As of 2024, charter schools can receive local property tax dollars in 4 counties—Lake, Marion, Vanderburgh and St. Joseph—even though charter school boards are private.
- Education Scholarship Accounts (ESAs): A taxpayer-funded voucher account for parents who withdraw their child from public school. Currently only available for special education students and their siblings.
- Homeschool: Education provided at home by a caregiver using private funds.
- Private School: A school founded, conducted, and maintained by a private group rather than by the government. There are accredited and non-accredited private schools in Indiana. Accredited private schools can accept vouchers.
- Public School (also called Traditional Public School): Community schools that must, by law, accept all students in their geographic boundaries. In Indiana, they are publicly funded using a combination of state, federal, and local tax dollars. They are governed by their local community most often via an elected school board.
- Tax Credit Scholarship: Private voucher funding that helps a student attend a private school. It is collected via nonprofit scholarship granting organizations (SGOs). Indiana offers tax credits to donors allowing them to claim 50% in their tax returns. Some of the largest SGOs in Indiana are religious organizations.
- Voucher: A private or government subsidy for students to attend an accredited private school. In Indiana the largest voucher is called Indiana Choice Scholarships; the majority of which are used to attend religious schools.
The Data
You can access the data pulled from all the reports and various lists from IDOE at the follow spreadsheets. All data is updated by volunteers. If you are interested in helping, let us know: contact at keepeducationpublic dot org.
Voucher data
Charter school data
Voucher data
Charter school data
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The vision of the Indiana Coalition for Public Education–Monroe County is for all children to have high-quality, equitable, well-funded schools that are subject to democratic oversight by their communities.
Our mission is to be the primary voice for public education advocacy in Monroe County.
Our mission is to be the primary voice for public education advocacy in Monroe County.