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 6513 NOTE PREPARED: Dec 20, 2023
BILL NUMBER: SB 143 BILL AMENDED:
SUBJECT: Education Matters.
FIRST AUTHOR: Sen. Buchanan BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
XDEDICATED
FEDERAL
Summary of Legislation: This bill requires the Department of Education to prepare and submit a report that
includes the department's recommendations regarding the major themes and content areas that should be
developed and maintained in Indiana education law.
The bill amends the:
(1) definition of "eligible student" for purposes of eligibility under the Indiana Education
Scholarship Account Program (program);
(2) definition of "ESA qualified expenses" under the program to include additional items; and
(3) state fiscal year used to determine the annual grant amount under the program.
This bill provides that the Treasurer of State shall accept applications July 1 through June 30 of each year
for the immediately following school year. (Current law requires applications to be submitted for an eligible
student not later than September 1 for the immediately following school year.)
The bill establishes requirements regarding using grants under the program for computer hardware or other
technological devices.
It also removes the following provisions:
(1) Certain program agreement requirements regarding enrollment in a school that receives tuition
support.
(2) References in the program provisions regarding plans developed under Section 504 of the federal
Rehabilitation Act of 1973.
SB 143 1 Effective Date: Upon passage; July 1, 2024.
Explanation of State Expenditures: Summary - The bill’s provisions
1. Expanding the population that is eligible to participate in the program; and
2. Changing the fiscal year of the Basic Tuition Support Grant used to calculate the annual Education
Scholarship Account (ESA) grant amount
could increase expenditures in FY 2025 and beyond. This includes additional staff for the Treasurer of State
(TOS) to administer the program as expanded under the bill, estimated at about $76,000. However, any
expenditure increase is dependent upon the number of students that participate in the program, which will
be limited by the appropriation to the program. In both FY 2024 and FY 2025, the appropriation is $10 M.
Additionally, the bill’s provision requiring a report from the Department of Education (DOE) to provide a
report will result in a workload increase in FY 2024 and FY 2025.
Additional Information -
Eligibility Expansion: Under current law, only students aged five and up who have a disability and a family
income equal to or lesser than 740% of the federal poverty level are eligible to participate in the program.
Under the bill, the eligible population expands to anyone aged five or older. [Under both current law and the
bill, eligibility ends when the student turns 22, and the account terminates when the student graduates high
school]. While state expenditures would likely increase due to the provision, the impact on state expenditures
is dependent upon where those students would have attended school without the eligibility changes provided
by the bill. Students who would have attended a public school who switch to the program would decrease
state expenditures while students who would have been homeschooled or attended a nonpublic school
without a Choice Scholarship would greatly increase state expenditures.
ESA Grant Amount Calculation: The bill changes the ESA grant amount calculation so that it uses the
student’s home school corporation’s per-student Basic Tuition Support Grant from the current fiscal year,
rather than the prior fiscal year. Based on Basic Tuition Support estimates for FY 2024 to FY 2025, this
change is expected to increase the per-student ESA grant amount by about $82 per account holder in FY
2025. Impacts beyond FY 2025 would be dependent upon increases in the Basic Tuition Support Grant.
Administrative Costs: The TOS estimates that for each additional 300 students participating in the ESA
program, it would need one additional full-time employee. LSA estimates that the salary and benefits of each
additional employee would be about $76,000, including health insurance benefits. Under current law, the
TOS can transfer up to 5% of the appropriation for the ESA program to the Indiana Education Scholarship
Account Administration Fund, which is used to pay for the costs of administering the program.
Current Law ESA Program: Under current law, the ESA program allows 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 for the previous fiscal year.
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. FY 2023 was the first year the
program enrolled students. As of November 21, the TOS reports that 431 students are participating in the
program in FY 2024, up from 143 students in FY 2023. State expenditures for those students is about $5 M.
TOS can use up to $500,000 for administration of the program, bringing the program cost to an estimated
$5.5 M in FY 2024. Based on enrollment changes in other states that have programs similar to an ESA
program, the number of students will likely increase over the next few years.
SB 143 2 DOE Report: The bill requires DOE to provide a report no later than November 1, 2024 on the major themes
and content areas that should be developed and maintained in Indiana Code. The work would likely begin
in FY 2024 and finish in FY 2025, but would likely be completed with existing staff and resources, assuming
near customary staffing and resource levels.
Explanation of State Revenues: Qualified Expenses: Under current law, students are able to carry over up
to $1,000 of unused ESA funds in their accounts from one school year to the next. Unused funds that exceed
that threshold are reverted back to the General Fund. Additionally, upon graduation, any amount still in the
program account is reverted back to the General Fund. The bill expands the list of qualified expenses to
include computer hardware under certain circumstances, autism disorder sensory educational tools,
curricular materials, and any other expense approved by the TOS. This could increase the portion of ESA
funds that are used by account holders, and thus reduce the reversions to the General Fund.
Explanation of Local Expenditures:
Explanation of Local Revenues: Public school revenue from state tuition support would likely decrease
under the bill as students who were ineligible for the ESA program become eligible for the ESA program
under the bill and switch to a nonpublic school. The number of students that would switch to the ESA
program is dependent in part on the appropriation for the ESA program, as that will limit the number of
students that can participate in the program.
State Agencies Affected: Treasurer of State.
Local Agencies Affected: Public schools.
Information Sources: United States Census Bureau; National Center for Education Statistics; Choice
Scholarship Program Annual Report, Indiana Department of Education, April 2021; LSA education database;
Department of Education; Treasurer of State.
Fiscal Analyst: Austin Spears, 317-234-9454
SB 143 3