Indiana lawmakers are expected to tackle a slew of school funding questions, as well as numerous legislative changes that could affect K-12 and college education, during the 2025 legislative session. Photo from Getty Images.

By Casey Smith
Indiana Capital Chronicle

INDIANAPOLIS — With Indiana’s latest forecasts showing a cooling economy, uncertainties around a new round of education funding loom ahead of the 2025 budget-setting legislative session.

Also up for debate upon lawmakers’ return to the Statehouse are proposals that seek to further boost private school vouchers, adjust teacher certification requirements, and expand the state’s charter school networks.

Recent budget plans earmarked roughly half of the state’s $44.5 billion biennial spending for K-12 education; the most recent budget, adopted in 2023, dedicated a historic $21 billion to schools.

This time around, however, Indiana’s budget regulators and legislative leaders warn that less state revenue compared to years prior — and growing Medicaid costs — could tighten education spending.

That bleak outlook comes as schools are already trying to cope with inflation increases and the end of federal pandemic relief funding.

State legislators are expected to spend the next four months hashing out how much money to make available for K-12 base funding, as well as allocations that could affect teacher pay, summer school, math and literacy tutoring, and extra resources for English learners and students with disabilities.

Questions Largely To Revolve Around Funding

Republican legislative leaders have not said for sure whether base funding for K-12 schools would increase or decrease in the 2025-27 budget.

While Senate President Pro Tem Rod Bray and House Speaker Todd Huston said education continues to be a “priority,” they emphasized that passing a balanced budget likely means less overall spending across a majority of line items.

House Minority Leader Phil GiaQuinta agreed.

Adding to the education funding questions are continued legislative attempts to limit property tax referendums, which Indiana school districts increasingly use to supplement state dollars for salaries, programming, construction and safety improvement projects.

Rep. Jake Teshka, R-North Liberty, testifies in committee on Thursday, Feb. 29, 2024. Photo by Leslie Bonilla Muñiz, Indiana Capital Chronicle.

During the 2024 session, Republican lawmakers — eager to pass property tax relief measures proposed a bill to restrict school operating and school safety referenda to general election years, but the language failed to pass.

While it’s not clear if the measure will return in 2025, incoming Gov. Mike Braun marked property tax relief among his legislative priorities and included in his plan the same restrictions to limit property tax referendums to only general elections.

Braun has also proposed a cap on property tax increases at 2% for certain residents and at 3% for others.

Republican Sen. Travis Holdman, who heads the Senate’s tax-focused committee, said to expect “a whole plethora of bills dealing with the property tax” to be filed this year.

The extent to which school districts are required to share property tax dollars with charter schools could be revisited in the 2025 session.

Indiana lawmakers gave charter schools major funding boosts in the current state budget after advocates ramped up lobbying efforts in the 2023 session to extend more benefits to the traditional public counterparts. A new law also forces school districts in four Hoosier counties to share referendum funding with charters.

A newly formed group representing Indiana’s growing public charter school sector recently said it will renew the push to make traditional public schools share local property tax revenue.

House Bill 1136, authored by Rep. Jake Tashka, R-North Liberty, seeks to go a step further, giving the state the authority to dissolve public school corporations and turn them into charters if more than 50% of students in a given district do not attend the traditional public schools in that area.

A legislative fiscal analysis estimates the bill’s provisions could dissolve five school corporations and transition 68 schools to charters by 2029. The affected districts include Indianapolis Public Schools, Gary Community School Corporation, Union School Corporation, Tri-Township Consolidated School Corporation and Cannelton City Schools.

Roughly a dozen other Hoosier districts are at or near the 50% threshold.

The state’s largest teachers union opposes the bill, which the group argues would “strip away” locally-elected school board governance, “replacing it with a state-appointed board and eroding the foundation of democracy in public education.”

“Rather than supporting schools and addressing critical issues like poverty and underfunding, HB 1136 would unfairly target districts based on student transfers — an issue mostly rooted in broader socioeconomic challenges beyond the control of schools,” said Indiana State Teachers Association President Keith Gambill. “If heard, lawmakers should reject HB 1136 and instead focus on policies that strengthen Indiana’s public schools, address staffing shortages and ensure equitable resources for all students.”

State Leaders, Advocates Make To-Do Lists

Indiana Education Secretary Katie Jenner said to “definitely” expect bills affecting school safety, another key piece of Braun’s education agenda.

Jenner said school and community leaders currently have to make “a number of different calls” to the state education and homeland security offices to put “proactive” measures in motion.

Secretary of Education Katie Jenner addresses lawmakers during a budget committee hearing on Dec. 16, 2024. Photo by Whitney Downard, Indiana Capital Chronicle.

She said Braun’s proposed Office of School Safety, “where all of us as state agencies would support” local efforts, is likely on the horizon.

Income guidelines for Choice Scholarships were expanded so much in 2023 that the program already reaches more than 95% of the state’s population.

Republican Rep. Bob Behning, chair of the House Education Committee, said in December that the GOP supermajority is on board.

Less, clear, though, is whether a “school choice” overhaul bill floated by Sen. Ryan Mishler in 2024 will get traction in the next legislative session.

The top GOP state senator’s proposal — which did not advance when previously introduced — would have created a grant program to allow all Hoosier families, regardless of income, to choose where their students get educated.

Doing so would bring an end to Choice Scholarships, special education-only Education Scholarship Accounts and the newly-established Career Scholarship Account Program.

Instead, Mishler suggested merging those programs into a new “Indiana Funding Students First Grant Program” for students ages 5 to 21, permitting all Hoosier parents to apply for an annual grant that can be used for “qualified” education expenses. That includes tuition and fees, exam fees, services for students with a disability, transportation, payments for tutoring, and costs associated with extracurricular activities, apprenticeships or other programs.

Indiana’s teachers, meanwhile, have called for improved pay and benefits — including 12 weeks of parental leave for all public school employees — though the union did not recommend a specific minimum salary. Baseline educator pay in the state currently sits at $40,000.

Republican legislative leadership has kept mum about their willingness or ability to approve those requests, and instead have pointed to the latest data showing the average teacher salary in Indiana during the last school year was recorded at $60,557 — up from $58,531 the year prior.

ISTA, Democrats and multiple advocacy groups are additionally pushing for Indiana’s compulsory school attendance age to drop to 6 — meaning kindergarten would become a requirement for Hoosier kids — and for universal access to pre-K. The state’s Republican supermajority has so far resisted such efforts.