Scholarship tax credit gets tangled in education funding debate

By Brigid Curtis Ayer

With dwindling state revenues, funding cuts hit school corporations hard, causing some to do what Department of Education officials told them to do “only as a last resort”—lay off teachers.

Lawmakers headed into the 2010 legislative session hoping to give school corporations the ability to dip into other education funding sources like capital projects money, currently prohibited by law to use for salaries, to prevent additional teacher layoffs.

The House and Senate each offered proposals to restore some of the $300 million education funding cuts.

House Bill 1367, authored by Rep. Greg Porter, D-Indianapolis, covered numerous education matters, including a delay in the scholarship tax credit, but did allow school corporations to use their capital projects funding to make up the shortfall provided that teachers received no pay raise. However, it excluded the automatic incremental pay raise that teachers have in their contracts. The incremental raise has been one of the major sticking points in the negotiations.

Senate Bill 309, authored by Sen. Ron Alting, R-Lafayette, allows school corporations to transfer funds from their school corporation budgets, but stipulated a pay freeze for teachers, including the incremental raise. The Senate version also placed stricter limits on the amounts of funding shifts and prohibits funding transfer from the debt service fund.

When House Bill 1367 moved to the Senate, Republicans removed all the contents of the bill, including the scholarship tax credit delay, and added their version of the education funding solution, the contents of Senate Bill 309 and Senate Bill 258 requiring reading proficiency standards.

Two members of the House Education Committee, Rep. David Cheatham,

D-North Vernon, and Rep. Robert Behning, R-Indianapolis, hammered out a bipartisan amendment to attach to Senate Bill 309. The compromise amendment prevented teacher layoffs and instituted a one-year pay freeze.

When Rep. Porter, who is House Education Committee chairman and the author of House Bill 1367, realized Senate Republicans stripped his bill in the Senate, he offered a surprise amendment to reinsert the contents of House Bill 1367 into Senate Bill 309 during a Feb. 17 committee hearing. The Democrats, who hold a slim majority on the committee, voted in support of Rep. Porter’s amendment and it passed.

Glenn Tebbe, Indiana Catholic Conference executive director, said, “What was so upsetting and surprising about this was the House Republicans and House Democrats had worked out a compromise. When the language to House Bill 1367, including the scholarship tax credit delay, came back into the bill, it really threw a wrench into the whole education funding debate.

“The scholarship tax credit, which saves the state money and will offer hundreds of children better educational opportunities, unfortunately has become a political football in the education funding debate,” Tebbe said.

Rep. Behning stood by the compromise amendment.

“The single most important thing in the classroom for the success of Hoosier children is a highly qualified, dedicated teacher,” he said. “Our goal is to keep these teachers on the job, and that’s what my compromise amendment did.”

In 2009, Indiana teachers earned on average nearly $50,000. As part of their contract, teachers automatically get on average a 2.6 percent salary increase and may receive salary raises on top of the incremental raise. Democrats support a “pay freeze” as long as it doesn’t include the incremental pay increase. Republicans want a total pay freeze.

Rep. Behning said the one-year incremental teacher pay freeze would save the state $60 million to $90 million. The state could also save approximately $30 million to $70 million annually if school corporations would accept the state health plan rather than their own private health insurance, the state lawmaker said.

“Indiana is facing one of the worst economic times since the depression. State employees have been under a pay freeze for three years, and they get no incremental raise either,” Rep. Behning said. “Teachers are quasi-state employees. What we are asking is reasonable—a pay freeze for [the] 2010-11 school year so that teachers can stay on the job, and we prevent further teacher layoffs.”

Shortly after Rep. Porter’s amendment passed the House Education Committee, his amendment was challenged by House Republicans. Rep. Porter’s failure to give proper notification on his amendment violated House Majority rules. As a result, House Speaker Rep. B. Patrick Bauer,

D-South Bend, ordered another hearing on Senate Bill 309, which was scheduled for Feb. 22.

“The educational goals of the Republicans and Democrats will have to be ironed out in conference committee,” Tebbe said.

During the Feb. 22 hearing, Rep. Porter deleted several sections of House Bill 1367, including the delay of the scholarship tax credit. According to Tebbe, the amended version of Senate Bill 309 now includes some aspects of the funding flexibility that was agreed to by lawmakers on Feb. 17. The revised bill, Senate Bill 309, passed committee in a bipartisan vote of 9-3 and moves ahead for a final vote.

The Indiana General Assembly must adjourn by March 14, but is expected to end the first week of March.

(Brigid Curtis Ayer is a correspondent for The Criterion.) †