Op-Ed: How Tax Dollars Work in Public Schools

K-12 public education is a focal point of the two-year state budget.

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INDIANAPOLIS - With the start of the 2025 session of the Indiana General Assembly, the investment in K-12 public education will become a focal point of the two-year state budget. When examining the areas that consume the largest portions of the state budget—while Medicaid is the fastest-growing expenditure now at 19 percent of the state budget—K-12 education remains the largest expenditure at 47 percent. This number decreases to 42 percent when deducting the obligations for retired teacher pensions. The annual appropriation of more than $9 billion for K-12 education supports teaching and learning opportunities for more than 1 million Hooser children. About $5 billion of this amount pays for the salaries and benefits of the 63,000 teachers in the classroom.

The investment by the state legislature in public schools is a sound decision. Adequate funding for schools helps perpetuate our democracy, benefits local communities, provides opportunities for our youngest citizens, and drives economic and job growth. Successful schools produce law-abiding, tax-paying citizens ready for postsecondary education, military enlistment, or high-wage careers.

The return on the investment is strong, as illustrated by several positive indicators. Most recently, Indiana's public high schools achieved a record-high graduation rate of 92.5%. Indiana students lead the nation in earning college credits while in high school, with 64 percent of students earning an average of 13.5 college credits. The State Board of Education approved changes to high school graduation requirements, increasing the opportunities for students to earn workplace credentials through participation in work-based learning, internships, and modern youth apprenticeships. Other policy changes are helping drive improvements in reading proficiency and student attendance. Indiana consistently performs well on national rankings based on the National Assessment of Educational Progress (NAEP), with our fourth and eighth graders exceeding the national average in math and on par in reading. While these are positive indicators, we have more work to do, especially to encourage more students to pursue a higher education. Continued investment in K-12 public education is essential.

Where does Indiana stand on per-student spending? According to a 2024 report from the Reason Foundation, Indiana had the second-lowest inflation-adjusted increase in education spending in the nation from 2002 to 2020 at only 1.9%. Another 2024 report from the Education Data Initiative indicates Indiana ranks 37th of 50 states in education spending per pupil. While state funding has risen substantially in the last four years, the long-term trends have not kept up with inflation and are decreasing as a percentage of the state budget.

These are cautionary trends for policymakers and state leaders as they craft the new two-year state budget. Public education continues to be a wise investment, in return helping proactively address many issues related to public health, safety, and quality of life. Balancing a budget that addresses a bevy of complex issues and essential programs is not an easy task. Legislators are to be commended when they prioritize the best investment of taxpayer dollars in K-12 education, as they have done recently. Let us hope we can celebrate a similar outcome at the end of the budget session, accelerating educational progress for Hoosier students.