Indiana gets a D for effort when it comes to funding public education. Keep that in mind when legislators say there’s not enough money to give schools what they need.
The Education Law Center’s “Making the Grade” report is an annual evaluation of state school funding. In its latest report, Indiana earned a C for school funding adequacy and fairness and D for effort.
The rating comes from the latest “Making the Grade” report, an annual evaluation of state school funding by the Education Law Center, a New Jersey-based research organization that advocates for equitable funding. Indiana does slightly better, earning a C, for school funding adequacy and fairness.
The report measures effort by dividing state and local spending for public schools by each state’s gross domestic product. Indiana spent under 3 percent of its GDP on K-12 schools, well below the national average and ranking 32nd among the states.
Indiana also ranked 32nd for the amount it spends on public schools, according to the report. It spent $15,414 per pupil, about $1,200 below the national average. The figures include state and local revenues and are adjusted for local wage markets.
The state looks a little better for funding fairness. Its overall funding of schools is slightly progressive, meaning schools that mostly serve students from low-income families get more money than schools that serve high-income families. Indiana used to do even better in this category, but funding for the state “complexity index” hasn’t kept up in recent years.
The state also used to do better at school funding effort. As Ball State economist Michael Hicks noted in a 2021 column, if Indiana had kept funding education at the same rate of GDP as ten years earlier, schools would be getting $1.3 billion more per year.
The data in “Making the Grade” are from 2021–2022, the most recent available to researchers for all the states. Things have probably gotten worse in Indiana since then. Our lawmakers did increase school funding in the 2023 state budget but not as much as inflation. An outsized share of the increase went to expanding tuition vouchers for private schools.
The Education Law Center warns against two national trends that are undermining public school funding. First is the growing adoption of voucher programs, which divert public funds to private schools. Second is policymakers’ mania for cutting taxes. Indiana, which adopted an almost universal voucher program in 2023, has been at the forefront of both.
“We find that public school needs are going unmet due to shortsighted economic and education policies that depress state revenue and divert scarce resources away from public schools, especially in states where the need for investment is the greatest,” Education Law Center research director Danielle Farrie said in a news release.
Indiana’s 2025 legislative session is underway. Republicans who control state government say their priorities include (1) expanding “school choice,” (2) cutting taxes, and (3) holding the line on spending. Any one of those policy choices would be problematic for public schools. All three could spell disaster.
Editor’s note: All Indiana Senate and House bills in the 2025 legislative session can be found at iga.in.gov/legislative/2025/bills.
The Education Law Center’s “Making the Grade” Report
This column first appeared on December 23, 2024, in School Matters, a blog about K-12 education in America, Indiana, and Monroe County, reported by Steve Hinnefeld, former education reporter for The Herald-Times.
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Find other articles by Steve Hinnefeld on his Limestone Post contributor page, including articles on education and the local housing crisis. Steve’s articles “Deep Dive: Struggling with Housing Supply, Stability and Subsidies” and “‘No Silver Bullet’: Advocates, Officials Use Many Tactics on Housing Woes” won 1st place for Non-Deadline Story or Series in the Indiana Pro Chapter of the Society of Professional Journalists “Best in Indiana” Journalism Contest.
