Private School Voucher Program Costs Indiana $40M, Report Finds

Indiana's school voucher program cost the state $40 million in 2014-15, according to a report out today from the state Department of Education.

The cost is a $24 million increase from last year’s report which found for the first time the program did not generate a savings.

The controversial program has become the second largest school voucher program in the country in just four years. Some public school advocates argue that vouchers deplete the already limited funds for school districts. Yet supporters counter vouchers allow families to direct their tax dollars to schools that are the best fit for their children.

The Choice Scholarship allows a portion of the state funding that a public school receives when a student enrolls, instead be redirected towards tuition at a private school the student chooses to attend. Families must meet income and other eligibility requirements to qualify for a voucher.

In the just completed school year 29,148 students received vouchers to attend 314 private schools worth $115.9 million in state aid. Indiana's Choice Scholarship is considered to be the most expansive in the country due to its wide eligibility requirements. 

This is could be the last time the state department releases this report, since the requirement was removed form the new two-year budget passed by lawmakers in April. But the department could still decide to calculate whether the program creates a savings or cost, a spokesman said Tuesday.

Read the report: 2014-15 Choice Scholarship Program Annual Report

When the program began, many expected it to create an annual savings. Since vouchers are worth between 50 percent and 90 percent of the basic tuition support that a school district receives for each student, the expectation was the state would save money when only a portion of that money was given to a private school.

The 90 percent award provides up to $4,800 for students in grades K-8 in the 2014-15 school year, according to Indiana University's Center for Evaluation & Education Policy.

Savings are calculated when a student leaves a traditional public or charter school and qualifies for a voucher to enroll at a private school, according to a formula required by the 2013 budget bill.

But as the program has grown, more students who never attended a public school have opted to use vouchers for private schools.

When the program began in 2011, just 10 percent of students receiving vouchers had no record of attending an Indiana public school. Now, 50 percent of voucher students have not attend a public school.

Funds for the $40 million estimated cost of the voucher program would come from funds allocated to school corporations where voucher recipients live.

Advocates for school choice have questioned the method used by the state department to evaluate whether the program generates savings. 

In the first two years of the program -- 2011-12 and 2012-13 school years -- a total of $9 million of “choice savings” was distributed to school corporations and charter schools.

In 2013 Indiana Supreme Court upheld voucher program after it was challenged by the Indiana State Teachers Association as violating the state constitution.

"Advocates for the private school voucher program touted the potential savings to taxpayers due to students receiving a voucher that would cost less than sending the student to a traditional public school," ISTA said in a statement on its website today.

Tosha Salyers, a spokeswoman for Institute for Quality Education, a group that supports vouchers, said it would cost more money if these students were attending a public school. 

"From our perspective it always costs less to educate a child at a voucher accepting school," she said.

Also reported in the Choice Scholarship Program Annual Report:

• 3,018 voucher students live in the Indianapolis Public Schools corporation limits
• 4,036 voucher students live in the Fort Wayne Community Schools corporation limits
• 5,667 voucher students in 2014-15 previously received a tution award from the state's School Scholarship Tax Credit. Of those students, 84 percent did not previously attend a public school.

Contact WFYI education reporter Eric Weddle at eweddle@wfyi.org or call (317) 614-0470. Follow on Twitter: @ericweddle.