Supporters and opponents showed up in force for a legislative hearing this week on a controversial bill that would expand Indiana's private school voucher program and create an Education Scholarship Account program.

The House Education Committee hearing continued for about three hours on Wednesday, with emotional debate on both sides of the issue. In the end, the committee passed the bill on a party-line 8 to 4 vote and it now goes to House Ways and Mean. The committee also approved an amendment that reduced the bill's costs and made other changes.

While many spoke passionately in favor of the bill, critics say now is not the time to create a new ESA "entitlement" program that will divert needed resources from public schools.

"This is a tremendous concern," said Terry Spradlin, Indiana School Boards Association executive director, who spoke at the hearing.

Funding the amended bill is estimated to cost $60.7 million over the biennium, according to the Indiana Legislative Services Agency, which provided a preliminary report, given the amendment making changes was introduced at Wednesday's hearing. LSA estimated the original bill at costing $202 million over the biennium.

On Friday, when asked about Gov. Eric Holcomb's response to House Bill 1005, press secretary Rachel Hoffmeyer wrote in an email: "The governor is laser focused on his agenda, which includes a $377 million dollar increase to K-12 public education funding in his proposed budget and is tracking additional legislation as it develops."

According to Spradlin, funding for HB 1005 would come through the tuition support formula appropriation that also funds K-12 public education.

"This diverts necessary funds away from supporting the constitutionally mandated system of public schools. They are creating dual systems and favoring the one system that only educates 10 percent of Hoosier children."

The bill would open eligibility for state vouchers to more students from middle-income families, raising income eligibility for a family of four up to about $110,000 per year in 2022, and a little more than $145,000 by 2023. According to the Indiana State Teachers Association, it would allow a family of four earning up to $145,000 to qualify for at least $5,500 per child.

Income tiers within the voucher program would also be eliminated, awarding all participating students the maximum award — 90% of the amount the state would have provided to their public district.

Education Scholarship Accounts [ESAs] would provide state funding to parents of special needs children with an Individualized Education Plan [IEP]; children in foster care; and children of active duty military in the armed forces or national guard.

According to ISBA, ESAs would give qualifying parents a taxpayer-funded account "loaded with $5,000 to $7,000 per child to spend at their discretion on private school tuition, home school, tutoring, therapy, and other services.” Under Wednesday's amendment, the grant would be 90% of tuition support, rather than full tuition support, and funds would be provided quarterly.

State Rep. Bob Behning, R-Indianapolis, who authored HB 1005 and is House Education Committee chair, describes the ESA component as "an opportunity for parents to really develop the education plan that best meets their child's needs, rather than us as state legislators and the state of Indiana saying this is the only option you have."

In response to critics who say that money should go to public schools to help them improve, he says, "I would argue there is a lot of data out there that shows us competition makes us better."

Behning also said, "We're trying to focus on improving opportunities for kids and improving their education and performance and I think we have to look at the system as a whole. I'm somewhat agnostic as to where a kid is educated as long as the system is meeting the needs of that child. I think that's where we should be focused."

So what are Education Scholarship Accounts?

The website ExcelinEd describes them as "state-supervised spending accounts containing a child’s education funds that can be used to pay for a variety of educational services. With an ESA, parents direct their children’s education funding to the state-approved schools, courses, programs and services of their choice."

According to a recent article in Forbes, ESAs "are enjoying a sudden start-of-year legislative push in many states." The article described them as a version of school vouchers, with ESA funds given to parents to spend on various education products and services.

It suggests that "most ESA programs have little or no accountability in place to determine just how the money is being spent."

The Feb. 1 Forbes article further states that ESAs "represent a radical shift in our country’s approach to education." Education has been viewed as a public good "that should be guaranteed to every child not just for their own sake, but for the sake of society as a whole," the article states.

The author suggests that ESAs "replace that idea with the notion that education is a commodity" purchased by parents.

HB 1005 would provide qualified students with an annual grant, distributed quarterly, "that may be used to pay for tuition at an accredited nonpublic school or education related expenses." The state treasurer would administer the program and would have to provide "parent-friendly" online services — an online portal — so that parents could send, and participating entities could receive, payments from the students' account.

Also, the bill states, the program would be audited annually by an independent public accounting firm. The state treasurer would contract with one or more financial institutions to maintain and manage the accounts.

According to Behning, the state would quarterly load the account with state tuition support dollars [90% of what a district receives] and special education dollars, and parents could choose from a list of approved vendors located on the portal. He suggested there might be a mobile app parents could use.

"It's very tightly protected against fraud. There is no cash changing hands. There is no debit card. It is a portal that is managed" and parents could only use approved vendors or services included on the portal, Behning said.

For foster children to qualify, the child must be approved by the Indiana Department of Child Services. Students enrolled in a public school would not qualify for an ESA.

Wednesday's amendment also called for the creation of an advisory council "to provide guidance on the implementation of the program" and to provide recommendations on program improvements to the state treasurer and General Assembly.

Behning suggested "very few" home schooling families would take advantage of the program because of the "hoops" they might have to go through and they typically do not want government intervention.

He said it's important for parents to have options for their children with disabilities, especially since the U.S. Department of Education’s Office of Civil Rights is investigating the Indiana Department of Education over complaints the state has denied students with disabilities equal access to education during the COVID-19 pandemic.

A letter from OCR said the state's "one-size-fits-all model is not working during COVID," Behning said. The new ESA program "would provide options for parents." Those options could include nonpublic schools, other services or special schools that focus on disabilities.

At Wednesday's hearing, some suggested providing more funding to public schools to better meet the needs of special education students. "I think we can do both," Behning said. "It may make sense for us to increase special education funding. I would not be opposed to that."

However, he said, "More money but no options isn't necessarily a positive thing."

Concerns remain

On Wednesday, several speakers criticized the bill as harmful to public education.

"I think that this is not the right time to create a new program in education or expand an existing program," said State Rep. Tonya Pfaff, D-Terre Haute, on Friday. She serves on the House Education Committee.

"We are still in a pandemic and need to concentrate our funding to supporting our schools, teachers and support staff," Pfaff said. "We still have a teacher crisis and before we allocate any money to new programs like ESA's, we need to fix our current problems."

The Indiana State Teachers Association opposes HB 1005. "Expanding these entitlement programs would consume much of the increases to traditional public schools as well as wipe out the ability to impact teacher pay for the foreseeable future," it says on its website. "Now is the time to invest in the public schools and educators who serve more than 90% of Hoosier kids and families."
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