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Funding for gifted learners, dual immersion programs, and the Dolly Parton Imagination Library is on the chopping block in the proposed state budget, while tuition support is increasing, as Indiana faces a leaner two-year fiscal period.
In total, the 2025-27 state budget draft outlines an increase of around 2% each year in overall education funding, alongside cuts to several K-12 and library programs and initiatives.
Education officials say some of those cuts are necessary to increase tuition support, the primary funding mechanism for both public schools and private school vouchers.
The budget proposal from House lawmakers is just the first step in a months-long budget process in which legislators could restore funding. It also likely doesn't capture the full effect of lawmakers' policy priorities this year, which include caps on property tax growth as well as universal school vouchers.
It reflects the pressure on the state to fund K-12 education, which makes up nearly half — $21 billion — of the state's two-year budget, amidst ongoing inflation, a Medicaid deficit, and the end of federal pandemic funding.
In a presentation to the House Ways and Means Committee on Wednesday, Secretary of Education Katie Jenner — who made recommendations that lawmakers then incorporated into the draft budget — said she looked through the whole budget to find places to streamline in order to increase funding for tuition support.
“I'll be honest with you, I want all the things. ... But noting that we had to make some decisions, I went through with a red pen and cut about 20.5 million in order to try and get that tuition support number up,” Jenner told lawmakers. “Glad to add that back in if we have the money.”
Indiana Department of Education representatives did not reply to a request for more details about what was cut. But a comparison of the proposed budget to the 2023-25 budget shows some key areas where funding is being cut, added, or held flat.
Here are a few highlights from the 2025-27 budget proposal.
Funding cuts: Dolly Parton's library, computer science
The budget proposal includes 5% cuts to the Department of Education and the State Board of Education, per directives from GOP Gov. Mike Braun that state leaders find savings within their departments. That reduces funding for the department from $19.9 to $18.9 million annually, and funding for the board from $1.9 million to $1.8 million annually.
Other cuts include:
- All funding is cut for the Dolly Parton Imagination Library, which received $2 million in 2023-24 and $4 million in 2024-25 — its first two years operating in Indiana. The library offers free books to children under 5 in around 85 counties in Indiana funded by a combination of state and local funding.
- All funding is cut from the Career Advising Grant program, which received $10 million in 2023-24 and $15 million in 2024-25.
- All funding — $425,000 — is cut from the Dual Immersion Pilot Program.
- All funding — $3,415,000 — is cut from the School Internet Connection fund.
- Funding for Gifted and Talented Education is cut from $15 million annually to $13 million annually in the two-year budget.
- Funding for the State Library is cut from $3.7 million annually to $2.6 million annually. Additionally, funding for statewide library services is cut from $1.5 annually to $1.43 million annually.
- Funding for the Next Level Computer Science program is cut from $3 million annually to $2.5 million annually.
- Funding for the David C. Ford Educational Technology program is cut from $5 million annually to $3 million annually.
- Funding for Alternative Education fund — which includes $10,000 for each child in recovery from alcohol or drug abuse who attends a certain kind of charter school — is cut from $5.3 million annually to $800,000 annually.
Funding increases: Tuition support, ILEARN pilot
One of the primary increases in funding in the budget proposal is for tuition support, which would increase by around $181 million in 2026 and $365 million in 2027, for a total allocation of $9.4 billion by 2026-27. That funding supports public schools, including charter schools, as well as private school vouchers.
According to a fiscal analysis from the Legislative Services Agency, making vouchers universal would increase state expenditures by an estimated $88.6 million in 2026 and $94.6 million in 2027. The state spent roughly $439 million on its voucher program for the 2023-24 school year.
Additionally, Education Scholarship Accounts, a voucher-like program for students with disabilities, would receive $25 million per year in the budget proposal, up from $10 million in each year of the last budget. Career Scholarship Accounts, which fund career training for high schoolers with private companies and organizations, will receive $11 million per year in the next budget, up from $10 million each year of the last budget.
A new addition to the budget is a $25 million per year Freedom and Opportunity fund, which will support the following, according to a Department of Education budget presentation to the House Committee on Ways and Means:
- $11 million to expand the ILEARN checkpoint pilot
- $4.5 million to develop and deploy an interactive advising tool to help implement the new diploma requirements
- 4.26 million to sustain the state teaching jobs board
- $5.5 million to recruit English learner, special education, and STEM teachers
Funding is flat for summer learning, literacy programs
The budget notably does not propose additional funding for curricular materials, which will be held at $160 million per year.
Some schools have reported that their share of those funds has not been enough to pay for books and materials for all students, requiring them to dip into their general budgets to cover the cost.
The budget proposal also keeps funding flat per year for excess special education costs at $29 million, and summer school, at around $18.4 million.
Addressing increased costs in these categories may come down to budgeting. In her Ways and Means presentation, Jenner said there are schools that were spending less than their allocation for curricular material.
Jenner has also hinted at reprioritizing funding for summer school to focus more on required literacy intervention, and less on physical education costs, which currently eat up a large share of summer school funding.
The budget proposal also maintains $50 million per year for academic improvement initiatives. According to Jenner's presentation, these funds would support the following:
- $17.5 million for programs like the Summer Learning Labs, a summer acceleration program operated by The Mind Trust.
- $20 million on literacy initiatives like the Literacy Cadre.
- $10 million for outcome-based funding for staff who have improved students' literacy skills.
- $2.5 million for Crossing the Finish Line.
Policymakers have not publicly proposed a figure for the Indiana Learns program, which provides families with $1,000 in state funds for private tutoring.
The House Ways and Means Committee, which helps draft and advance the state budget legislation, has yet to schedule its next meeting.
Chalkbeat Data and Graphics Reporter Kae Petrin contributed data analysis.
Aleksandra Appleton covers Indiana education policy and writes about K-12 schools across the state. Contact her at [email protected].
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Copyright Newstex Jan 31, 2025