Indiana Boosts Rural School Funding in Major Overhaul

The Indiana General Assembly concluded its 2025 session by passing a two-year state budget that delivers a 2% annual increase in K-12 funding, with Indiana's support comprising 46% of the overall budget, prioritizing underfunded rural districts like those in southern Indiana. House Enrolled Act 1001, approved in the early hours of April 25 after a marathon session, also expands universal school vouchers set to launch mid-2026, covering private school tuition and eliminating parental textbook costs. Lawmakers hailed the reforms as a lifeline for districts struggling with enrollment declines, such as those in Lafayette and Richmond, where per-pupil spending lags urban peers.

Gov. Mike Braun signed dozens of education bills post-session, including Senate Bill 146, which raises the minimum teacher salary from $40,000 to $45,000 effective July 2025 and mandates 65% of state tuition support for teacher pay, up from 62%. However, the property tax reform package slashes school revenue by $744.4 million, forcing traditional public districts to share operations funds—covering buses, utilities and buildings—with charter schools starting 2028, impacting about 30 districts and funneling $4.7 million to charters in year one. Rural advocates in areas like Jasper and Dekalb counties pushed for the per-pupil equity focus, but Democrats decried missing long-term fiscal data.

Additional measures in House Bill 1498 overhaul the A-F school grading system, tasking the State Board of Education with a new model by year's end that emphasizes diploma seals and proficiency, while null grades continue through 2025-26. Senate Bill 358 mandates literacy interventions for schools where under 70% pass IREAD-3 and launches a mastery-based pilot, alongside facilities boards for Indianapolis schools. The reforms cap a session Rep. Jeff Raatz called transformative, though teachers rallied at the Statehouse against revenue-sharing cuts.