Indiana could see a push for school choice savings accounts

A plan that would allow families direct access to their child’s state education dollars to use for school-related expenses could be gaining traction in Indiana.

Two bills proposed in the Indiana General Assembly last year would’ve set up “education savings accounts” — focused on K-12 and unrelated to 529 college savings plans — that would create what some education reform advocates call “universal school choice.” The proposal would direct state money not through school channels, but deposit it into an account parents could freely access.

Supporters of the idea argue it provides more options to families to choose how to best educate their children. But critics of the savings accounts say they could divert even more money away from public schools and come with few regulations to protect against fraud and ensure families are spending the money according to the law.

The idea is becoming more popular in states with Republican-controlled legislatures.

Similar programs have passed state legislatures or are already operating in Tennessee, Florida, Arizona, Mississippi and Nevada. So far, Arizona’s and Nevada’s programs are the most expansive, applying to more than just students with special needs.

The American Legislative Exchange Council, a conservative not-for-profit lobbying group that pairs legislators and business owners together to write model legislation, highlighted the education savings accounts in their yearly summer conference, held in Indianapolis last week.

ALEC, strongly opposed by teachers unions and school choice critics, has considerable influence in Indiana, with several key lawmakers participating in the group and elements of the group’s model laws inspiring some of Indiana’s education reforms in recent years.

The group also admires and has sought to promote Indiana’s legislative work on education, even naming its model legislation for school choice programs the “Indiana Education Reform Package.”

Neither Indiana bills was actively considered last year, but Sen. Dennis Kruse, R-Auburn, and Rep. Bob Behning, R-Indianapolis, who serve as chairmen of the Senate and House education committees, said earlier this year that they were open to the ideas in the future. Indiana lawmakers must write a new budget in 2017. Legislation dealing with state funding is much more likely to be heard and move forward in budget years.

“It’s something we need to talk about,” Behning told Chalkbeat in January. “It’s worthy to look at options. It wouldn’t change the landscape significantly because we already have a lot of choice, it’s just the way we distribute it a little differently.”

It’s true that Indiana has lots of school choice options now. About 30,000 students use public money to pay private school tuition through the voucher program, and more than 37,000 attended public charter schools.

But the plans proposed by lawmakers last year could allow for more state education dollars to be controlled directly by parents than under the voucher or charter school systems. The bills also would make families with higher incomes eligible to direct their state education dollars somewhere other than their local public schools. In 2016-17, the base per-student aid each school district will receive is $5,088.

Joel Hand, with the Indiana Coalition for Public Education, said the programs are too unregulated and pose a threat to taxpayers and public schools.

“There’s nothing there to protect the taxpayer that their tax dollars are really going to be used for that intended purpose,” Hand said at an ICPE presentation earlier this summer. “All these things would work to drain significant funds from public schools.”

Sen. Jeff Raatz, R-Richmond earlier this year pushed a bill that was never considered by lawmakers in Senate Bill 397, which would’ve only allowed families with students who have special needs to participate in an education savings account program. That bill would not have limited the family income of participants.

House Bill 1311, which was authored by Rep. Tim Brown, R-Crawfordsville, but also was never considered, would’ve set up a much more expansive program with similarities to a model bill crafted by ALEC. It would have allowed all families to sign up to receive between 70 percent and 100 percent of the basic state aid amount set aside for each child’s public education if they earn no more than $97,000 for a family of four.

That is much more, for example, than what families can receive through Indiana’s private school tuition voucher program.

Under the voucher program, a family of four making less than $44,863 per year can receive up to 90 percent of the funding that their local public district would receive from the state. A family earning up to $89,725 per year is eligible for half the state aid their district would receive.

The House bill would’ve allowed families to spend the state money on private school tuition but also on lots of other things, such as curricular materials, exam fees (for Advanced Placement and other tests), services for students with disabilities or even college tuition. The flexibility would be a particular boon to families who homeschool their children.

Hand and his colleague at ICPE, Vic Smith, said the idea for K-12 education savings accounts would lead to too large an expansion of the state’s voucher program and divert too much funding from existing public schools.

“This work to bring us vouchers over the past several years has warmed us up for this,” Smith said. “We think that’s just going down the wrong road.”

Chalkbeat is a not-for-profit news site covering educational change in public schools.