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 6707 NOTE PREPARED: Feb 26, 2024
BILL NUMBER: SB 1 BILL AMENDED: Feb 26, 2024
SUBJECT: Reading Skills.
FIRST AUTHOR: Sen. Rogers BILL STATUS: 2
nd
Reading - 2
nd
House
FIRST SPONSOR: Rep. Teshka
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides that the Department of Education (DOE) may grant certain
individuals a waiver that provides an exception to the literacy endorsement requirements if the DOE submits
a report to the Legislative Council by a specified date.
This bill requires certain schools, beginning with the 2024-2025 school year, to offer summer school courses
for students who are not reading proficient or are at risk of not being reading proficient as indicated on the
determinant evaluation of reading skills approved by the State Board of Education. It also expands eligibility
for funding for summer school courses. The bill also requires certain summer school courses to be taught by
a teacher, instructor, or tutor who is trained in the science of reading. It also provides that if a student does
not achieve a 90% attendance rate in a summer reading course, the student is required to participate in an
individual reading plan in the following school year.
The bill requires the DOE to procure a universal screening assessment that meets certain criteria. It also
requires certain schools to administer the assessment to students in kindergarten through grade 2 who are not
on track for reading proficiency by grade 3 as determined by the DOE. The bill also requires the State Board
of Education to establish a method for virtual administration of the ILEARN statewide assessment. It
provides that a vendor must supply a student's assessment results to the student and the student's parents.
The bill applies the reading deficiency remediation plan to public schools, charter schools, state accredited
nonpublic schools, and eligible schools. It makes the following changes to the plan:
(1) Beginning with evaluations administered in the 2024-2025 school year, requires retention of a
student in grade 3 in addition to remediation if the student has not achieved a passing score on the
evaluation.
SB 1 1 (2) Requires schools to notify a student's parent of certain assessment results, interventions, or
remedial actions provided to the student.
(3) Requires schools to monitor the progress of students who have failed to achieve a passing score
on the evaluation or the statewide assessment program test.
(4) Requires schools to provide reading instruction aligned with the science of reading to all students
in kindergarten through grade 8.
(5) Requires schools to administer the evaluation to students who are in grade 2.
(6) Requires a student to take the evaluation until certain conditions are met.
(7) Requires school reporting on interventions for certain students at risk of not being reading
proficient and for certain students who do not a achieve a valid passing score on the determinant
evaluation of reading skills.
The bill creates exceptions to the grade 3 retention requirement for a student who meets certain criteria.The
bill also requires the governing body of a school to establish a procedure allowing a parent or guardian of
a student to appeal the student's retention under the plan. The bill also requires the DOE to notify the parent
or guardian of a child enrolled in kindergarten of the retention requirements under the plan.
Effective Date: Upon passage; July 1, 2024.
Explanation of State Expenditures: Summary - The bill will increase the number of students that must
retake third grade in FY 2026. This will shift some state tuition support expenditures back one year beginning
in FY 2030, and will eventually lead to a state expenditure increase of $50 M to $57 M in FY 2035. The
bill’s requirements regarding certain students taking IREAD-3 is expected to increase expenditures by about
$92,000. The bill will have an indeterminate impact on enrollment in state educational institutions, which
could have a minor impact on outcomes-based performance funding in future years. The bill’s provisions
regarding summer school, virtual administration of ILEARN, and administrative requirements for DOE are
all minor workload increases.
Additional Information -
Third Grade Retention: The bill requires schools to retain students in third grade who do not pass IREAD-3
unless they meet one of the following requirements:
1. The student was already retained in the prior year;
2. The student has a disability or the student’s IEP specifies that retention is not appropriate;
3. The student is an English learner who has received services for fewer than two years and a
committee has determined that promotion to fourth grade is appropriate;
4. The student received a math score of proficient or higher on ILEARN in third grade.
LSA estimates that about 7,050 more students would repeat third grade in FY 2026 due to the bill’s
provisions based on 2023 IREAD-3 data.
There would be no immediate impact to state tuition support, as students retained in third grade are funded
the same as students promoted to fourth grade. However, as the students age, they will be a year behind in
taking CTE courses that would impact the CTE Grant and achieving certain academic goals in high school
that impact the Academic Performance Grant. This would shift state expenditures related to those grants back
one year, with shifts beginning to occur in FY 2030. In FY 2035, as students who would have otherwise
graduated are in their senior year, LSA estimates that state expenditures would increase by $50 M to $57 M,
assuming FY 2025 state tuition support grant amounts. This represents the cost of paying for each of these
students for one more year than the state would have paid under current law. As the bill will impact each
SB 1 2 cohort of third graders moving forward, each year after FY 2035 would be similarly impacted.
Ultimately, the impact of the increase in the number of third grade students retained is dependent upon a
number of factors including but not limited to:
1. The number of students that are retained in the future.
2. How those students’ academic careers progress post-retention compared to how they would have
progressed under current law.
3. The state tuition support formula in place in the future.
IREAD-3: The bill requires schools to administer IREAD-3 to all second grade students. This would increase
the number of students taking assessments. However, DOE currently allows schools to opt-in to assessing
second grade students. The Secretary of Education reported that 1,099 out of 1,336 elementary schools opted
in for 2024. Additionally, the bill requires students to retake IREAD-3 until they pass or enter seventh grade.
Under current law, students must retake IREAD-3 in third (for students in schools that opt-in to test second
grade students), fourth, and fifth grade if they did not pass in the previous year. The Secretary of Education
reported that the additional assessments would cost $92,000, but it is not clear if that estimate accounts for
some sixth and seventh grade students taking IREAD-3.
Dyslexia Screener: The bill requires DOE to procure and provide technical support for a preferred dyslexia
screener, a minor workload increase. [DOE already reviews and approves these assessments, which are
required for all students in kindergarten through second grade and students in third grade or later under
certain circumstances.]
State Educational Institutions (SEIs): The bill will have an unknown impact on enrollments in literacy
certificate programs, as two of the bill’s provisions will have opposite impacts. SEIs could experience an
increase in enrollments in literacy certificate programs from the bill’s requirement that instructional coaches
have a literacy endorsement by FY 2026. However, another provision in the bill changes the year by which
certain teaching licenses can not be renewed without a literacy endorsement from FY 2026 to FY 2028. The
bill also allows DOE to grant a waiver that would exempt individuals from this requirement if the agency
prepares a report. To the extent SEI enrollment is impacted, it could impact the funding SEIs receive from
the performance funding formula in future bienniums. Any impact is probably minor and would depend on
the funding formula used in the future. [SEIs receive state funding through General Fund appropriations.]
Summer School: The bill requires the State Board of Education to give priority reimbursement to summer
school programming that is provided to students in second or third grade that are at risk of not being reading
proficient or are not reading proficient. This represents a minor workload increase for the state board that
will be completed with existing staff and resources. The bill is not expected to increase total state
expenditures for summer school, as HEA 1001-2023 appropriated $18.36 M in both FY 2024 and FY 2025
for summer school and specified that to the extent costs would exceed that amount, DOE must
proportionateley reduce the grants distributed to stay within the appropriation. All of the summer school
appropriation will likely be used under current law.
ILEARN: The bill requires the State Board of Education to establish a method for virtual administration of
ILEARN, a minor workload increase.
DOE Administrative Requirements: The bill requires DOE to notify parents of students enrolled in
kindergarten of the retention requirement for students that do not pass IREAD-3 in third grade. DOE would
likely be able to work with schools to notify parents. The bill also requires DOE to establish a standard
SB 1 3 reporting process and reporting window for schools to report students who qualify for an exemption from
the third grade retention requirement.
Explanation of State Revenues: SEIs: To the extent the bill changes enrollment patterns in literacy
certification programs, SEI revenue would be impacted. [See Explanation of State Expenditures.]
Explanation of Local Expenditures: Summary - The bill’s provisions requiring:
1. Instructional coaches at schools with an IREAD-3 pass rate below 70% to have a literacy
endorsement; and
2. Schools to offer summer school, beginning in the summer of 2025, to students who are in second
and third grade who are at risk of not being, or are currently not, reading proficient
will increase the workload and could increase expenditures for some schools. Additionally, the bill’s
provisions that:
1. Increase the number of students that are retained in third grade;
2. Increase the population of students taking the IREAD-3 assessment;
3. Require schools to provide a core reading program aligned with the science of reading through
eighth grade;
4. Require schools to report certain information to DOE regarding their literacy interventions;
5. Require students who do not have at least 90% attendance rates in a required summer reading
course to participate in a reading plan the following year; and
6. Require schools to establish a procedure by which a parent can appeal their student’s retention
will also increase the workload of schools.
The bill also requires the State Board of Education to establish a method for virtual administration of
ILEARN. That could decrease workload and/or expenditures for virtual schools.
Additional Information -
Instructional Coach: Current statute requires school corporations to employ instructional coaches trained
in the science of reading if less than 70% of their students did not pass IREAD-3. The bill requires those
instructional coaches to have a literacy related endorsement beginning in FY 2026. Some schools may need
to hire additional teachers with a literacy endorsement to comply with the bill’s requirements. Using data
school corporations submitted to DOE with salary and position information, and using the State Budget
Agency's fringe benefits calculation, Indiana teachers cost approximately $72,000 annually.[This estimate
does not account for health insurance.] Schools may be able to reduce these costs dependent on the extent
that they assist existing instructional coaches in attaining a literacy endorsement. Several SEIs offer literacy
endorsements at a cost of approximately $7,500. Statewide, there are 2,700 teachers with a literacy
endorsement.
Summer School: The bill requires, beginning in the summer of 2025, public schools to offer summer school
courses to students in second and third grade who are at risk of not being, or are currently not, reading
proficient. If a public school was not offering these summer school courses, expenditures could increase.
Schools may also shift summer school course offerings in order to be compliant with the bill without
increasing expenditures.
Third Grade Retention: The bill will increase the number of students retained in third grade. For some
schools that have low IREAD-3 pass rates, large portions of third grade classes could be retained, requiring
teachers to shift what grade level they teach to accommodate a large third grade class and a small fourth
SB 1 4 grade class.
ILEARN: Currently, ILEARN must be administered in-person. This requires virtual schools to set up test sites
that are accessible to students. If ILEARN can be administered remotely, it would reduce the workload and
potential cost of organizing test sites.
Explanation of Local Revenues: Third Grade Retention: Public schools’ state tuition support revenue
would not be impacted in the near-term from students being retained in third grade. However, revenue shifts
from one year to the next year would begin to occur around FY 2030. A revenue increase would occur
beginning in FY 2035, estimated at $47 M to $53 M. [See Explanation of State Expenditures].
Summer School: Beginning in the summer of 2025, the bill requires accredited nonpublic schools to offer,
and receive summer school funding for, summer school courses provided to students in second and third
grade who are at risk of not being, or are currently not, reading proficient. Since summer school funding is
limited by the appropriation, allowing accredited nonpublic schools to receive funding could decrease the
distributions public schools receive.
State Agencies Affected: Department of Education; State Board of Education; State Educational Institutions.
Local Agencies Affected: Public schools.
Information Sources: Department of Education;
https://www.in.gov/doe/files/2024-2025-Indiana-Dyslexia-Screener-Evaluation-Protocol.docx.pdf
https://www.in.gov/doe/files/2023-2024-IREAD-3-Frequently-Asked-Questions.pdf
Ball State University,
https://www.bsu.edu/academics/collegesanddepartments/online/academic-programs/graduate-
certificates/literacy;
Indiana University, https://online.iu.edu/degrees/language-and-literature-certificate.html;
State Budget Agency, https://www.in.gov/sba/files/Operating-Budget-Instructions-FY24-and-FY25.pdf;
https://eddata.doe.in.gov/PublicHome/GetObjectByUuidAndViewType?uuid=df4a26e1-eedc-4480-812d-
da6cad5528ff&viewType=Report¤tPage=1;
LSA Education Database;
Final Reimbursement for 2022 Summer School Programs Memo, November 18, 2022, Department of
Education.
Fiscal Analyst: Austin Spears, 317-234-9454.
SB 1 5