News From Terre Haute, Indiana

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June 18, 2014

Report: Vouchers cost, don’t save

Changes to program turn $4M saved annually to $16M lost

INDIANAPOLIS — An Indiana Department of Education report shows that changes to the state’s private school voucher program are costing the state roughly $16 million.

The report, which was released late Tuesday, says the voucher program saved the state $4.2 million in the 2011-2012 school year and $4.9 million in the 2012-2013 school year. But changes that allowed some students already attending private schools to begin receiving state aid ended up costing the state $15.8 million for the school year that just ended.

Daniel Altman, a Department of Education spokesman, delivered a limited explanation for the sudden change between school years.

“The Department is committed to a transparent accounting of how taxpayer dollars are spent. The update [in] today’s report reflects recent growth in the Choice program,” Altman said in an emailed statement.

Voucher supporters questioned the report’s accuracy on Wednesday. Jeff Spalding, director of fiscal policy and analysis at the Friedman Foundation for Educational Choice, said there are problems with how lawmakers established the formula that determines whether vouchers save money or not.

Money for school vouchers is diverted from the state’s public school funds, but supporters note that vouchers cost an average $2,000 less than it costs for each public school student, effectively creating a savings for the public schools.

By Spalding’s estimate, the program should have actually returned roughly $18 million to the state’s public schools. Spalding said the state’s formula doesn’t properly account for children who were never likely to attend public school or for students who previously received vouchers that were paid for by private-sector scholarship organizations.

The first Indiana scholarship granting organization was started by former insurance magnate Patrick Rooney in 1991. His foundation paid the costs for each student, but in 2009 the Legislature approved a tax credit covering half the cost of each privately funded voucher.

“The key here [is] knowing what the fiscal impact is. How many kids were diverted from the public school system?” he said. “Then you can start to get your head around what the true fiscal impact is.”

Vouchers continue to be a touchy item at the Statehouse. A legal challenge filed by the Indiana State Teachers Association was rejected by the Indiana Supreme Court last spring, giving fuel to supporters looking to add to the state’s already expansive voucher program.

Gov. Mike Pence was forced to scale back his plans to expand the voucher program earlier this year because of cost concerns and that they may violate a key tenet of the deal allowing vouchers in 2011: students must spend at least a year in public school before qualifying for vouchers.

Indiana Republicans expanded the program last year to allow siblings of students enrolled in the voucher program to receive a voucher without having first to attend public school. They also waived the public school requirement for any student in a school district graded “F” by the state. Those changes contributed to a spike in private school students receiving state aid.

Vouchers have been a tough subject for Democratic Schools Superintendent Glenda Ritz. She was among the plaintiffs who challenged the voucher program in court, but she removed her name from the lawsuit after she was elected superintendent.

Voucher supporters, worried that Ritz wouldn’t enforce the law, attempted last year to remove the program from her oversight, but ultimately abandoned the effort.

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