LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7471 NOTE PREPARED: Jan 14, 2025
BILL NUMBER: SB 146 BILL AMENDED:
SUBJECT: Teacher Compensation.
FIRST AUTHOR: Sen. Rogers BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State and Local
XDEDICATED
FEDERAL
Summary of Legislation: Health Care Coverage: The bill requires a school corporation or charter school
to provide coverage of health care services for active and retired employees of the school corporation or
charter school under a state employee health plan if the state employee health plan is less expensive than an
alternative plan offered by the school. (Under current law, a school corporation or charter school may elect
to provide coverage under a state employee health plan.)
Indiana Teacher Recruitment Program and Fund: The bill creates the Indiana Teacher Recruitment Program
and Fund.
Paid Leave: It provides 20 days of paid leave for a full-time teacher employed by a school corporation and
10 days of paid leave for a part-time teacher employed by a school corporation upon: (1) the birth of the
teacher's child; (2) the birth of a child to the teacher's spouse; (3) the placement of a child for adoption with
the teacher; or (4) the stillbirth of the teacher's child.
Teacher Preparation: The bill also removes a prohibition on ranking teacher preparation programs.
Teacher Compensation: Beginning June 30, 2025:
(1) The bill increases the minimum salary for a teacher employed by a school corporation
to $45,000 (current law requires $40,000); and
(2) It requires a school corporation to expend an amount for teacher compensation that is
not less than 65% of state tuition support (current law requires 62%).
Incentivization Grants: The bill changes the name of the "Teacher Appreciation Grant" to the "Teacher
Incentivization Grant". It amends the requirements regarding the Teacher Incentivization Grant.
Interstate Teacher Mobility Compact: The bill joins the Interstate Teacher Mobility Compact.
Effective Date: June 29, 2025; July 1, 2025.
SB 146 1 Explanation of State Expenditures: Health Care Coverage: The bill will require school corporations and
charter schools to provide health care coverage for employees and retirees through the state employees health
plan (SEHP), unless an alternative plan has less total cost. (Total cost is the sum of the employer’s cost and
the employees’ share.) The bill also requires a school corporation or charter school to provide health care
coverage for public safety personnel through the SEHP. The incoming group will have an indeterminate
impact on SEHP premiums, depending on location and the utilization profile of the new employees. Areas
of the state have above average costs that will potentially increase the premiums.
The added coverage under the SEHP will increase workload for the State Personnel Department (SPD) to
administer a potential three- or four-fold increase in the number of covered people enrolled in the SEHP .
The bill eliminates a requirement for the SPD to provide enrollment periods to school corporations or charter
schools, which will minimally reduce the SPD’s workload. The SPD contracts with a third party
administrator to provide the SEHP and the contracted costs may increase to meet the needs of the new
enrollees. The additional funds and resources required could be supplied through existing staff and resources
currently being used in another program or with new appropriations. Ultimately, the source of funds and
resources required to satisfy the requirements of this bill will depend on legislative and administrative
actions.
Interstate Teacher Mobility Compact: Joining the Interstate Teacher Mobility Compact, a multi-state
agreement to facilitate the mobility of teachers across the member states by removing potential barriers to
employment and licensure, would require additional workload and resources for the Department of Education
(DOE) and the State Board of Education. Costs may include an interstate compact member fee or annual
assessment charged on behalf of the Interstate Teacher Mobility Compact Commission. Compact member
state responsibilities include defining eligible licenses and career and technical education licenses that the
member state is willing to consider for equivalency under this new compact. This may include changes to
testing or course equivalency requirements for out-of-state teachers. To the extent Indiana has already
established interstate agreements facilitated by the National Association of State Directors of Teacher
Education and Certification (NASDTEC), increases to workload and expenses may be mitigated. Ultimately,
the source of funds and resources required to satisfy the requirements of this bill will depend on legislative
and administrative actions.
Indiana Teacher Recruitment Program and Fund: The bill establishes the Indiana Teacher Recruitment
Program to award grants to training and recruitment programs for teachers in critical shortage areas. It also
establishes the Indiana Teacher Recruitment Fund, consisting of appropriations from the General Assembly,
gifts, grants from private entities, and federal grants. The DOE will administer the program and fund. The
bill does not make an appropriation to the program or fund.
Teacher Incentivization Grants: The bill modifies the Teacher Appreciation Grant and names it the Teacher
Incentivization Grant. Under the bill, virtual charter schools would not receive funding. Other public schools
would receive the same $37.50 per ADM under the bill that they would under current law. Removing virtual
charter schools from the eligibility for the grant could decrease state expenditures by $300,000 to $340,000
annually, but any impact is dependent upon the appropriation made for the grant.
Additional Information: Current interstate reciprocity agreements are in place to allow for out-of-state
teachers to seek licensure based on testing and course equivalency standards as determined by a receiving
state. Indiana has reciprocal agreements in place that may still require additional testing related to content
areas or coursework after a provincial license has been granted to an out-of-state teacher. The compact aims
SB 146 2 to establish more uniform licensure requirements to minimize the need for teachers to seek additional course
work and testing when seeking employment across state lines. Any changes to current requirements in
Indiana may reduce participation in teacher preparation course work and/or minimize additional testing.
Explanation of State Revenues: Interstate Teacher Mobility Compact: DOE collects a $36.72 Indiana
Teacher Licensing fee for initial certification and renewal, duplications, evaluations of licenses or
out-of-state transcripts, addition or deletion of license areas, conversion to professional licenses, permits, and
degree changes. Out-of-state teachers applying for a license are charged an additional $36.72 evaluation fee.
All fees from teacher licenses are deposited into the Professional Standards Fund. To the extent any newly
established uniform requirements allow for more initial licenses to be granted rather than provincial
(one-year temporary reciprocal permits), licensing fees may be reduced. DOE reported 234 reciprocal
licenses during the 2021-2022 school year.[See Explanation of State Expenditures].
Explanation of Local Expenditures: Health Care Coverage: If alternative health care coverage provided
by a school corporation or charter school is less expensive than the SEHP, the cost savings is passed to the
employee through the employee’s choice of a contribution to a defined contribution account or added annual
salary. While the impact of this provision is unknown, it could increase benefit costs significantly for school
corporations or charter school with lower cost health care coverage.
Paid Leave: This bill will require school corporations to offer paid parental leave for employees. Assuming
school corporations do not currently offer the paid parental leave required by the bill, statewide school
corporation expenditures could increase by $4 M to $5 M annually to pay for substitute teachers. The policy
will also create a small workload increase for school administrators, but any increase should be within the
routine administrative functions of the school. The bill's provisions may also improve teacher recruitment
and retention, which may decrease expenditures associated with faculty turnover.
Interstate Teacher Mobility Compact: If the number of teachers with valid licenses increases as a result of
the bill's provisions, public schools may be able to fill vacant positions. [See Explanation of State
Expenditures].
Minimum Teacher Salary: The bill will require more school corporations to submit a report to the DOE
explaining the school corporation’s inability to meet the minimum threshold requirement, which the bill
increases from $40,000 to $45,000. Using data school corporations submitted to DOE with salary and
position information, LSA estimates that in FY 2024, of the 281 school corporations that reported salary data,
221 had minimum salaries at or above $40,000, while 44 had a minimum salary at or above $45,000.
State Tuition Support and Teacher Compensation: Beginning in FY 2026, this bill requires school
corporations to expend at least 65%, instead of 62%, of their state tuition support revenue on compensation
for teachers. According to DOE’s 2024 Annual Teacher Compensation Report, 214 out of 290 school
corporations met the 62% requirement, while 150 school corporations would have met the 65% requirement.
School corporations that do not meet the requirement must publish onto their website and discuss at their
next public meeting that the school was unable to meet the teacher compensation threshold.
Explanation of Local Revenues: Teacher Incentivization Grants: Virtual charter schools would experience
a revenue decrease, as they could receive Teacher Appreciation Grants under current law but not Teacher
Incentivization Grants under the bill. Other public schools would receive the same $37.50 per ADM under
the bill that they would under current law.
SB 146 3 State Agencies Affected: Office of Educator Licensing and Development, Department of Education; State
Board of Education; State Personnel Department.
Local Agencies Affected: Public schools.
Information Sources: LSA Education Database.
DOE 2024 Annual Teacher Compensation Report:
https://iga.in.gov/publications/agency_report/2024%20Annual%20Report%20-%20Teacher%20Compen
sation%20Report.pdf
Legislative Services Agency: Indiana Handbook of Taxes, Revenues, and Appropriations, FY 2023;
National Center for Interstate Compacts: https://teachercompact.org;
National Association of State Directors of Teacher Education and Certification:
https://www.nasdtec.net/page/Interstate;
Department of Education: 2021-2022 Annual Licensing Report,
https://www.in.gov/doe/files/2022-annual-report-educator-licensing-fy-2022.pdf.
Fiscal Analyst: Karen Rossen, 317-234-2106; Austin Spears, 317-234-9454.
SB 146 4