LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 7471 NOTE PREPARED: Mar 21, 2025
BILL NUMBER: SB 146 BILL AMENDED: Mar 20, 2025
SUBJECT: Teacher Compensation.
FIRST AUTHOR: Sen. Rogers BILL STATUS: CR Adopted - 2
nd
House
FIRST SPONSOR: Rep. Teshka
FUNDS AFFECTED:XGENERAL IMPACT: State and Local
XDEDICATED
FEDERAL
Summary of Legislation: (Amended) Report: This bill requires the Department of Education (DOE) to
submit a report to the General Assembly before November 1, 2025, that provides an analysis of the feasibility
and cost of increasing school corporation employee health plan options.
Indiana Teacher Recruitment Program and Fund: The bill creates the Indiana Teacher Recruitment Program
and Fund.
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%).
The bill amends the requirements for a school corporation and the DOE if the school corporation determines
that the school corporation cannot meet minimum teacher salary requirements.
Paid Leave: This bill provides for certain paid new parent and childbirth recovery leave for teachers.
Interstate Teacher Mobility Compact: The bill joins the Interstate Teacher Mobility Compact.
Matrix Rating System: The bill removes a provision that provides that the matrix rating system may not rank
or compare teacher preparation programs.
Effective Date: (Amended) July 1, 2025.
Explanation of State Expenditures: (Revised) 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
SB 146 1 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.
(Revised) 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 non-reverting 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 specifies that money in the fund is continuously appropriated for the purposes
of the fund, and the program and fund expire at the end of FY 2027.
DOE Report: The bill’s requirement that DOE complete a report by November 1, 2025 regarding the
feasibility and cost of increasing school corporation employee health plan options would be completed with
existing staff and resources.
(Revised) 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 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: (Revised) 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: (Revised) Paid Leave: This bill will require public schools to offer
paid parental leave for employees. An Indiana Education Employment Relations Board analysis of 168
collective bargaining agreements found that 38 (or about 23%) had paid parental leave provisions, with an
average leave of just under 7 days. The bill’s requirements are expected to significantly increase public
school expenditures, but the impact is dependent upon a number of factors, including, but not limited to:
1. The current new parent leave policy;
2. The number of female and male teachers who would be eligible for new parent leave;
3. The length of time teachers would be away from work both under the bill and under current law;
4. The difference in pay between the teacher on new parent leave and a substitute teacher;
5. Other actions taken by the school and teachers.
SB 146 2 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.
(Revised) 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
(Revised) Minimum Teacher Salary: The bill will require more school corporations to take certain steps if
they are unable 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:
State Agencies Affected: Department of Education; State Board of Education.
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.
https://nces.ed.gov/surveys/ntps/estable/table/ntps/ntps2021_sflt02_t1s
Indiana Education Employment Relations Board.
Fiscal Analyst: Austin Spears, 317-234-9454.
SB 146 3