LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7001 NOTE PREPARED: Feb 21, 2022
BILL NUMBER: SB 331 BILL AMENDED: Feb 17, 2022
SUBJECT: Education Matters.
FIRST AUTHOR: Sen. Buchanan BILL STATUS: CR Adopted - 2
nd
House
FIRST SPONSOR: Rep. Behning
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: Teacher Compensation Calculation: This bill provides that, for purposes of
determining the funding floor for teachers of a school corporation, the amount a school corporation expends
for full-time teacher salaries shall include the amount the school corporation expends for participating in a
special education cooperative or a career and technical education cooperative that is directly attributable to
the salaries of full-time teachers employed by the cooperative, as determined by the Department of Education
(DOE).
Teacher Compensation Report: The bill requires the DOE to annually report to the Legislative Council and
the Budget Committee on certain matters regarding full-time teacher salaries and benefits and the issuance
of waivers of the requirement that a school corporation expend a specified percentage of tuition support for
full-time teacher salaries.
Program Administration: The bill also authorizes the Treasurer of State to deduct up to 10% of funds made
available for the Indiana Education Scholarship Account Program to cover costs of administering the
program in the first year and up to 5% of funds made available in each year thereafter. It also establishes the
Indiana Education Scholarship Account Administration Fund to support the administration of the program.
The bill requires any amounts deducted by the Treasurer for administration costs to be deposited in the fund.
Qualified School: The bill makes changes to the definition of "qualified school".
Miscellaneous: The bill requires an eligible student with a disability to choose in the application process
whether the eligible student will receive special education services from:
(1) the school corporation required to provide the special education services to the eligible student;
SB 331 1 or
(2) a qualified school that provides the necessary special education or related services to the eligible
student.
This bill specifies the annual grant amount calculation for an eligible student based on the eligible student's
application choice. It also amends the list of individuals or entities that may become participating entities.
The bill removes provisions that do the following:
(1) Require the treasurer to provide certain online services and capabilities.
(2) Require certain participating entities to post a surety bond or provide the Treasurer information
regarding unencumbered assets.
It makes technical corrections.
Effective Date: Upon passage; July 1, 2022.
Explanation of State Expenditures: Summary- The bill’s impact on state expenditures is unknown and is
dependent upon the following:
1. The number of students, if any, who would participate in the program who would not have
participated under current law.
2. Where the new student participants would have attended school.
3. The appropriation for the program after FY 2023.
The bill has two components that could increase the potential number of participants in the program. The
Participants who Receive a Certificate of Completion and the Application Deadline sections detail the
potential fiscal impact of each of the two provisions. Additionally, the bill has provisions that would impact
the administrative costs of the program, detailed in the Program Administration and Website Requirements
sections. Any increase in state expenditures would be subject to the $10 M appropriated to the Indiana
Education Scholarship Account Program Fund for the ESA program in FY 2023. In FY 2024 and beyond,
any change to the appropriation for the program would impact state expenditures. Finally, the bill would
result in small workload changes for DOE, outlined in the Teacher Compensation Report and the Teacher
Compensation Calculation sections.
Participants who Receive a Certificate of Completion: Under current law, once students graduate or receive
a certificate of completion, they are no longer eligible for the ESA program. The bill would allow students
who receive a certificate of completion to continue to be eligible for the ESA program and receive a grant
up to the age of 22 in accordance with their individualized education plan, service plan, Choice special
education plan, or Indiana education scholarship account education service plan. This matches what current
law allows for public school students who receive a certificate of completion.
Application Deadline: The bill requires the Treasurer of State to accept applications for the program through
September 1 each year for the next school year. Under current law, the Treasurer of State is required to set
the date by which an application for the program must be submitted for FY 2023. For FY 2024 and beyond,
current law requires applications for the program to be submitted by April 1 for the immediately following
school year. The provision could increase participation in the program beginning in FY 2023. If participation
in the program increased, the impact on state expenditures is dependent upon where the students would
otherwise have attended school. [See Additional Information for further details regarding the impact of
additional participants in the program]. Any potential increase in program participation would be subject to
the $10 M appropriated to the Indiana Education Scholarship Account Program Fund for the program in FY
SB 331 2 2023.
Program Administration: Under current law, the Treasurer of State is allowed to deduct up to 3% of the
annual grant amount sent to program participants to cover the costs of managing the participants’ accounts
and administering the program. The bill eliminates that funding source and instead permits the Treasurer of
State to transfer up to 10% of the funds ($1 M) in FY 2023 in the Indiana Education Scholarship Account
Program Fund to the newly established Indiana Education Scholarship Account Administration Fund for the
purposes of administering the program. Beginning in FY 2024, the bill specifies that 5% of the funds can be
transferred annually. The Treasurer of State stated that the additional funds will be used to pay for the
additional personnel needed to review every expense distribution, account applications, participating entity
applications, and to answer questions from students and entities participating in the program.
Website Requirements: Under current law, the Treasurer of State must provide certain online services and
capabilities related to the program. The bill’s elimination of two of the capabilities will reduce state
expenditures on the creation of the website by an unknown amount.
Teacher Compensation Report: Beginning in FY 2023, the bill requires DOE to provide an annual report on
teacher compensation (including benefits) at the school corporation level. This workload increase would be
completed with existing staff and resources.
Teacher Compensation Calculation: Under current law, beginning in FY 2022, school corporations are
required to spend an amount equal to 45% of the state tuition support they receive on full-time teacher
salaries. If the school corporation does not meet this requirement, the superintendent must submit a waiver
to the DOE explaining why they were not able to meet the requirement. If DOE grants the waiver, the school
corporation must work with the DOE to create a plan that would allow the school corporation to meet the
45% requirement in the future. By including teacher salaries that may have otherwise been excluded from
the calculation, some school corporations that would have failed to meet the requirement under current law
might meet the requirement under the bill. This could result in a small workload decrease for DOE.
Additional Information- Indiana Education Scholarship Account Program: Under current law, beginning
in FY 2023, the program would allow students with a disability who meet an income requirement and who
enroll in a nonpublic school to receive a grant that is equal to 90% of the student’s home school corporation’s
per student basic tuition support grant. Additionally, if the student chooses to receive special education
services from an entity other than the student’s home school corporation, the student would be eligible to
receive the special education grant the student’s home school corporation would have received for the
student.
Program Participation: If the bill expands participation in the program, the total statewide impact is
dependent upon the number of students who would participate in the program that would not have
participated otherwise and where the students would have attended school under current law. Students who
would have attended a public school under current law that would participate in the program under the bill
would result in a state expenditure decrease of about $950. However, each student who would have been
homeschooled or enrolled in a private school without a choice scholarship would increase state expenditures
by an estimated $6,250 on average.
Explanation of State Revenues:
Explanation of Local Expenditures: Teacher Compensation Calculation: The bill’s provisions could allow
SB 331 3 more school corporations to meet the requirement that at least 45% of the state tuition support they receive
is spent on full-time teacher salaries. This could result in a minor workload decrease for school corporations.
[See Explanation of State Expenditures for additional details.]
Explanation of Local Revenues: The bill could decrease public schools’ state tuition support revenue
beginning in FY 2023. If, under current law, the program’s cost was going to reach the $10 M appropriation,
the bill would have limited to no impact on local revenue, as the number of students who might leave public
schools to participate in the program would not be impacted. If, under current law, the program’s
participation was not going to reach the $10 M appropriation, the bill would likely increase program
participation. Many of the students who switched to the program would come from public schools, which
would decrease state tuition support revenue for public schools.
State Agencies Affected: Treasurer of State; Department of Education; Legislative Council; Budget
Committee.
Local Agencies Affected: Public schools.
Information Sources: LSA education database, Treasurer of State; Department of Education.
Fiscal Analyst: Austin Spears, 317-234-9454.
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