By Jason Bearce, vice president of education and workforce development

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With strong backing from the Indiana Chamber, state lawmakers doubled down on proposals aimed at better retaining Indiana’s classroom teachers, skilling up Hoosier workers and promoting closer alignment between the state’s education and employment sectors.

Teachers Are Head of the Class … on Education Priorities

On the teacher front, the state boosted school funding by $539 million over the biennium (a 2.5% annual increase) and saved school districts $70 million per year by paying down teachers’ retirement fund obligations. Lawmakers also created new grant programs that provide increased mentoring support (HB 1009) for new teachers and “career ladders” (HB 1008) that tie compensation to teachers’ level of responsibility and proven effectiveness in the classroom. In contrast to traditional teacher pay scales that are based almost entirely on years of experience, the career ladder concept is intended to keep Indiana’s best teachers in the classroom longer by providing alternative paths –beyond becoming administrators – for educators to earn more.

While observers acknowledged that these investments will not fundamentally change teacher salaries in Indiana, most seemed to accept that the Governor and General Assembly did as much as they could for teachers during a session when it was widely accepted that the top budget priority was addressing a shortfall at the Indiana Department of Child Services that totaled several hundred million dollars over the biennium.

It’s also worth noting that despite allocating hundreds of millions in new state dollars to K-12 education over the past decade, average teacher salaries have stagnated in Indiana and Hoosier teachers often earn significantly less than their peers in other states. This trend reflects the strong role local school leaders have in determining how state funding is spent – whether that’s paying their teachers more, hiring more administrators or using it for other non-classroom expenditures.

In response, the General Assembly passed HB 1003 in an effort to increase public transparency around the degree to which state dollars are being spent on education versus operational expenses. House Bill 1003 establishes a target of no more than 15% of the revenue deposited in a school district’s education fund being transferred to its operations fund. School corporations that exceed that 15% threshold may be required to explain why they were unable to meet the target, and state financial experts may make recommendations to drive more dollars to the classroom.

Indiana’s Got Talent … Just Not Nearly Enough

Teachers are unquestionably a key factor in developing Indiana’s next generation of talent, but lawmakers didn’t stop there with their efforts this session. The General Assembly passed proposals impacting both ends of the state’s talent pipeline. This includes increasing statewide access to
pre-kindergarten programs (HB 1628), expanding state-supported internship opportunities for high school and college students (HB 1629) and doubling state funding for Indiana’s Next Level Jobs grants (HB 1002) that pay for individuals to earn tuition-free certificates in high-demand job sectors and reimburse employers for training and retaining their workers.

Often called the Governor’s workforce measure, HB 1002 contained a number of provisions in its original form – most of which were focused on strengthening career-technical education opportunities for high school students. However, as the session progressed HB 1002 became a common home for even more proposals that didn’t make it through the process as standalone bills, including HB 1404 (School Accountability) and SB 420 (Industry Collaboration Organizations).

House Bill 1404 called for the State Board of Education to make changes to the state’s K-12 accountability system, which assigns A through F letter grades to help parents and community members gauge the performance of their local schools. For high schools, the current system assigns letter grades based primarily on student test scores and graduation rates. Specifically, the measure proposed including additional “postsecondary outcome” measures, including student enrollment in postsecondary education, completion of industry-recognized credentials and military service. With the Chamber’s backing, the goal was to transition away from an over-reliance on standardized state assessments – which often are not valued by either employers or colleges – toward more meaningful measures that offer a better indication of whether Indiana students are on track for success after high school.

Passed by House lawmakers with support from employers and many local educators, HB 1404 met strong resistance in the Senate due to concerns about data tracking and whether schools have any responsibility for how their students fare after graduation. As a strong advocate for outcomes-based accountability, the Chamber maintained that high schools play a critical role in ensuring students are prepared for post-graduation success and the state should use relevant data to drive the results that matter most.

In the end, the language passed in HB 1002 took a different path to the same goal: creating a 15-member school accountability panel charged with recommending new indicators for high school accountability to the General Assembly by October 30 of this year. Co-chaired by two members of the State Board of Education, the panel also includes representatives from the business community, including a designee from the Indiana Chamber.

Separately, SB 420 took a similarly winding path through the Legislature. The bill was intended to incentivize employers to work collaboratively to increase career-technical education and work-based learning opportunities for students. However, after passing the Senate with broad support, the bill stalled in the House before ultimately ending up in HB 1002 in modified form. The Chamber saw HB 1404 and SB 420 as potentially complementary measures that could promote closer alignment between the state’s education and workforce sectors. As such, the Chamber worked closely with lawmakers to resurrect the key provisions from both bills in the HB 1002 conference committee report that ultimately passed both houses and was signed by the Governor.

Call for Greater Alignment … Not Rearranging Deck Chairs

The need for closer alignment at all levels was a recurring theme throughout the session: between different branches of state government, between K-12 and higher education, and between educators and employers. Lingering concerns and frustration on this issue resulted in the passage of bills that added legislators to the Governor’s Workforce Cabinet (also in HB 1002), created an interim study committee to review Indiana’s existing governance structures for education policymaking (SB 546) and moved up the appointment date for the state’s secretary of education – historically known as the superintendent of public instruction – from 2025 to 2021 (HB 1005).

Long championed by the Chamber, Indiana’s change from an elected to an appointed K-12 schools chief began with legislation passed by the General Assembly in 2017. State Superintendent Jennifer McCormick’s announcement in late 2018 that she would not seek re-election cleared the way for Indiana to join the 38 other states that currently appoint their K-12 school chiefs. This change is also consistent with how Indiana already selects the heads of related state agencies: The state’s workforce development commissioner is appointed directly by the Governor and the higher education commissioner is selected by a board appointed by the Governor.

Given the increasing linkages between Indiana’s K-12, higher education and workforce development systems in producing the talent needed to compete and thrive, the Chamber welcomes these moves to align and streamline state government to better respond to the needs of employers and to ensure a better return on investment for taxpayers.

Where We Are and Where We Need to Be

At the end of the day, it really is all about talent. That certainly seems to be the consensus among Indiana employers – 80% of whom said in the Chamber’s most recent annual workforce survey that filling workforce needs is either their top concern or among their biggest challenges. For the first time in the 11-year history of that survey, more than half of Indiana employers reported leaving positions open in the last year due to a lack of qualified applicants.

With more than 85,000 unfilled jobs today and at least one million more job vacancies projected over the next decade, there is a growing concern about whether Indiana is building the talent pipeline it needs to be competitive. What’s clear is that traditional talent pipeline sources and approaches are no longer producing a sufficient supply of qualified job seekers, and Hoosiers who lack the necessary skills have become increasingly disillusioned as they find themselves falling further behind.

This anxiety is bound to become even more apparent as international competition continues to increase, and automation and artificial intelligence eliminate more low-skill jobs and place an increased premium on individuals with higher-level skills and credentials. Looking ahead, the extent to which Indiana is successful in developing and deploying the talent required by a 21st century global economy may well be the deciding factor for the future of our state.

That message – one which has and will continue to be championed by the Chamber – clearly has reached the Indiana Statehouse.

Resource: Jason Bearce at (317) 264-6880 or email: [email protected]