Indiana teachers may finally get that raise.
With an extra $2 billion to spend over the next two years due to a rosy April revenue forecast, Indiana lawmakers announced Tuesday they would invest half of that into increasing funding for K-12 schools. The influx of cash allowed them to fulfill a promise made two years ago to address the state’s teacher pay shortage.
The state also benefited from the federal stimulus package signed by President Biden. The $37.4 billion two-year budget compromise, struck between Gov. Eric Holcomb and leaders of the Indiana General Assembly, will fund the $600 million down payment that a state commission found was needed to make teacher pay in Indiana competitive.
“This budget truly is transformational,” Holcomb said during a press conference Tuesday afternoon.
$1 billion more for K-12 schools
In total, it will direct an astronomical $1.9 billion new dollars toward K-12 schools over the biennium, more than twice as much as originally proposed in earlier budget drafts. The money will fund major increases in tuition support for the state’s public schools, as well as massive expansions in private school choice programs.
State tuition support will grow by 4.6% in the first year of the budget and another 4.3% in the second year for a total of more than $1 billion new dollars.
Total K-12 education spending over the biennium will top $18.7 billion.
An updated revenue forecast released last week showed that Indiana has more than recovered from the COVID-19 pandemic. What was expected to be a relatively tight budget is now awash in extra cash that lawmakers had one week to figure out how to spend before the end of the legislative session.
They also had to work out how to spend some unbudgeted federal funds from the roughly $3 billion dedicated to Indianathrough the American Rescue Plan, the $1.9 trillion stimulus package Congress passed this year and Biden signed. The state used that for infrastructure and other one-time expenses.
They did it in five days, with the historic increase in K-12 spending, large paydowns in state debt and the restoration of full funding for mental health programs.
The compromise between the two Republican-controlled chambers and the governor calls for a $900 million infrastructure fund, $250 million for broadband expansion and $500 million for a regional development initiative. On the public safety side, it appropriates $20 million for state police to purchase body cameras and $10 million for grants for local police to do so.
Budget eliminates cigarette tax increase
House Republicans did not get the 50.5 centcigarette tax increase they had hoped for, however, it does establish a tax on electronic cigarettes.
While Democrats had concerns about the budget — especially about the expansion of the private school voucher program — Senate Minority Leader Greg Taylor, D-Indianapolis, called it “probably one of the best budgets I’ve seen since I’ve been here.”
Senate Democrats claimed responsibility for many of the ideas in the budget and the influx of federal money provided by Democrats in Washington D.C, during a press conference Tuesday. Still, it’s not perfect, they said.
“There’s still some trepidation and some hesitation, because we have concerns with the expansion of vouchers,” said Sen. Eddie Melton, D- Gary. “This is still siphoning funds away from our traditional K-12 public schools.”
After last week’s announcement, pressure mounted on lawmakers to address the teacher pay issue.
Raising teacher pay
The Indiana State Teachers Association called on lawmakers to make good on promises to address lagging teacher pay. A report commissioned by Holcomb estimated it would cost around $600 million to catch Indiana up to neighboring states and make compensation competitive.
The report set goals for the state to increase starting pay for teachers to $40,000 and to raise average pay to $60,000. An IndyStar analysis of 288 collective bargaining agreements from the 2019-20 school year found that 220 districts had minimum pay below $40,000 and average pay statewide is less than $53,500.
State leaders argue that they can’t dictate salaries — that it’s a local decision. Schools say they can only invest in teachers as much as the state gives them. With annual increases above inflation, the hope is that schools can now start to direct more dollars toward teachers.
Statehouse leaders said they expect the new dollars flowing to schools to make their way to teachers pockets. If they don’t, House Speaker Todd Huston said the state may look to take those decisions away from local districts.
“This is important time for schools, he said. “I’ll just say this: because we’re making a significant investment, we expect it to be in teacher pay. And we’ll be watching closely.
“It feels like a lot of the pressure on teacher pay has been directed at this building. We’ve stepped up. Now’s the time for locals to step up because we don’t really want to be more prescriptive but with the type of investments we’re making, if it doesn’t get to teacher pay we might just have to be.”
In addition to meeting the needed investment outline in the report, the budget includes three more recommendations from the report.
It will require districts direct at least 45% of their tuition support dollars to teacher pay and to not reduce their spending on salaries from one year to the next. According to the teacher compensation report, more than 100 districts weren’t meeting the 45% spending threshold in the 2019-20 school year. The report called that requirement “aspirational but attainable.”
It’s not clear what would happen to districts that don’t meet these new requirements, but the report recommends that districts seek a waiver from the Indiana Department of Education.
Up until this point, statehouse leadership had been largely silent on the recommendations from the report.
The budget will also include a strong recommendation that districts start their teachers at no lower than $40,000. This recommendation from the report has been a goal of the state’s teachers for more than a decade.
“This is a good day for Indiana’s students, educators and communities,” said ISTA President Keith Gambill in a prepared statement. “While we wait to review the details of the final budget bill, today’s announcement by lawmakers and the governor that the proposed budget will fund the governor’s teacher compensation report is to be celebrated. This level of funding is the direct result of our members’ advocacy.”
Gambill credited the advocacy of teachers, who held one of the largest Statehouse rallies in Indiana in late 2019, for the progress they saw Tuesday. He said the budget and subsequent raise for teachers should go a long way toward retaining the state’s existing teachers and recruiting new people into the profession.
“It’s been a long time in working,” he said. “We believe this is going to go a long way… It feels great today.”
Traditional public schools aren’t the only ones that got what they wanted. School choice advocates also lobbied for substantive increases in size, scope and funding of their programs — most of which were granted.
Charter schools get boost
Charter schools will get a boost in their per-student grant. It will rise from $750 per student this year to $1,000 next year and $1,250 in the second year of the budget.
And House Republicans will get much of what they wanted when it comes to expanding the state’s private school choice programs. The final budget deal will raise the income-limit for eligibility in Indiana’s Choice Scholarship program to 300% of the free and reduced-price lunch program and eliminate lower tiers of funding for wealthier families. It actually expands the program even faster than either chamber’s budget proposal would have.
It also creates a larger Education Scholarship Account program than the Senate’s proposal, though it’s still smaller than what the House GOP wanted to see. The program will be capped at $10 million in the first year, but will open the program to all special education families at the 300% income limit and give participating families 90% of the tuition support that a school would have received for that student and 100% of their special education dollars.
One education spending proposal that didn’t make the final cut was a big boost to the dollars that support schools educating large numbers of students living in poverty. The proposal for that funding is less than the Senate wanted but more than the House proposed.
Both chambers are poised to vote on the budget this week before lawmakers leave the Statehouse.