While less than 1 percent of students from Howard, Miami and Tipton counties are attending private schools on the state’s dollar this year, some public school educators still say their districts are being negatively affected by the shifting of state money to private schools.

Meanwhile state legislators are considering designating even more funding to the state’s voucher program, known as choice scholarships. The House’s budget bill calls for eliminating the $4,800 cap on vouchers for K-8 students, which is estimated to cost an additional $4 million a year. Sen. Dennis Kruse (R-Auburn), chair of the education and career development committee, said that’s an insignificant increase in the scope of a $6.9 billion K-12 tuition support budget.

“That itself would not increase things much,” Kruse, R-District 14, said, noting that currently there is no cap on the voucher amount for high school students so removing the $4,800 cap for K-8 students would make the vouchers more uniform.

Without that cap, the amount eligible families receive from the state for a choice scholarship will be up to 90 percent of what the students’ home district receives in per student state funding.

Since legislators first approved the voucher program in 2011, restrictions on the number of vouchers awarded, the amount awarded per voucher and eligibility requirements for families have been relaxed, and more and more families statewide are taking advantage.

This school year, 29,148 Hoosier students received choice scholarships, which is a 47 percent increase from last school year, according to the Indiana Department of Education’s choice scholarship program report that was updated in February. The voucher program diverted $15.8 million from public schools in 2013-14, even though the program was initially billed as a way to save money, which would then be redistributed to public school corporations.

“We may not have lost a lot of students, but the pot can only be so big,” said Randy McCracken, superintendent of Western School Corp., which had 24 of the students living in its district opt to attend a private school on vouchers in 2014-15. “If the money starts going to vouchers, then it’s coming from public schools.”

The Senate is set to release its version of the budget bill today, and Kruse was anticipating Wednesday that there would be some differences related to the voucher funding.

“There’s the possibility we might do a separation of the voucher funding and put it in a separate fund from the K-12 tuition,” Kruse said, adding the change would increase transparency in how much money is being spent on vouchers.

Sen. Luke Kenley (R-Noblesville), chair of the Senate appropriations committee, wasn’t sure that change would pass the Senate because he thinks the IDOE already provides sufficient transparency in its annual report on the choice scholarship program.

Kenley, R-District 20, declined to comment further on the Senate’s budget proposal Wednesday, noting that it will be officially released to the media this morning.

Double standard

Kruse sees the choice scholarships as an important factor in making private school accessible to low-income families.

To receive a choice scholarship that equates to 90 percent of the home district’s per student state funding, a family’s income has to fall at the federal government’s threshold to qualify for reduced-price lunches. That's $44,123 a year for a four-person household. To receive a choice scholarship that equates to 50 percent of the home district’s per student state funding, a family’s income can be within 200 percent of that federal guideline for reduced-price lunches, or $88,245 for a family of four.

Kokomo Schools Superintendent Jeff Hauswald pointed out lawmakers are using two different definitions of low-income when it comes to state funding for the voucher program and additional state funds for public schools educating low-income students. Kokomo Schools had 124 students in its district choose vouchers this school year.

“It’s like we have two definitions for poverty. How can that be?” Hauswald said. “In four years, the foundation originally made for the implementation of vouchers has been eroded.”

The funding formula for public schools includes a factor called the complexity index, which takes into account the percentage of a district’s student body that is considered low-income and provides additional state money to help meet those students’ needs. The House budget bill would change how the complexity index is determined to count only students who qualify for free lunches, not reduced-price lunches. That means a four-person family’s annual income would have to be $23,850 or less for a public school to receive complexity funding for that student.

“Voucher costs come out of the same pot of money as the school funding formula,” Hauswald said. “The more vouchers cost, the less money for public schools. Private schools play an important role in our community; however, private schools are a choice.”

Still, Kruse said he doesn’t think an increase in the number of students using the vouchers harms public schools.

“The money is for the student. The money isn’t for the schools, so wherever the student goes the money goes,” he said. “Traditional schools no longer have a monopoly on education.”

Families can choose to send their children to the public school in the district where they live, a public school in another district, a private school, charter school or to home school them, Kruse said. State money will follow the student in every scenario besides home schooling.

More than 50 percent of the 325 K-8 students enrolled at Sts. Joan of Arc and Patrick Schools in Kokomo use choice scholarships to help pay for tuition, said Therese Bath, director of stewardship for the private, Catholic schools.

“It’s increased every year since the program began,” Bath said. “Families having the option to choose the best school for their child is important.”

Ruth Lavrenz, principal of Redeemer Lutheran School in Kokomo, agrees that it’s important to give parents options for their children’s education, regardless of their income level.

“It’s been pretty wonderful to give parents that choice,” she said. “It’s so iffy from year to year [how many vouchers the school will receive]. If you look at the trend, it will continue to go up. It does give parents much more of an opportunity for choice.”

Twenty-four of Redeemer Lutheran’s 116 preschool through eighth grade students utilize state vouchers, which is double the school’s 12 choice scholarship recipients in 2013-14, according to the IDOE report.

Tax credits

Another factor in state support for the school choice scholarships is the tax credit given to people who contribute to Scholarship Granting Organizations. Indiana currently recognizes four SGOs that raise money for scholarships to allow students to attend private schools. Donations come from private parties, but they then receive a state tax credit of up to 50 percent of the amount they donated.

Hauswald sees that tax credit as even more state funding going to support the voucher program, noting that contributions to public schools’ educational foundations don’t qualify for the same tax credits.

Currently, the state has approved up to a total of $7.5 million in tax credits for contributions to SGOs, and the House budget bill proposes increasing that limit to $12.5 million. Kruse expected the Senate to modify that part of the budget.

“The Senate I don’t think is as anxious to keep that increase. I don’t know that it’s needed,” he said, noting that the tax credits granted for SGO donations last year didn’t come close to the current cap.

There is some concern related to how SGOs actually spend the money they collect. In the 2013-14 school year, SGOs raised a total of $16.1 million, but they awarded only $11.8 million in scholarships that school year. State law says SGOs must spend at least 90 percent of their budgets on student scholarships, so that leaves a $2.7 million gap in what should have been distributed in student scholarships.

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