Indiana will create the nation's broadest private school voucher system and enact other sweeping education changes, making the state a showcase of conservative ideas just as Gov. Mitch Daniels nears an announcement on whether he will make a 2012 presidential run.
The Republican-controlled state Legislature handed Daniels a huge victory Wednesday when the GOP-led House voted 55-43 to give final approval to a bill creating the controversial voucher program. It would allow even middle-class families to use taxpayer money to send their children to private schools.
Unlike other systems that are limited to lower-income households, children with special needs or those in failing schools, Indiana's voucher program will be open to a much larger pool of students, including those already in excellent schools. Families would have to meet certain income limits to qualify, with families of four making up to about $60,000 a year getting some type of scholarship.
Daniels' agenda mirrors ideas being pushed nationwide by Republicans empowered by 2010 election victories. But Daniels has successfully led Indiana — a conservative state not known for going out on a limb — into uncharted education territory.
"Other states are going to be taking notice about how far Indiana's going," said Robert Enlow, president of the Foundation for Educational Choice.
The successes couldn't come at a better time for the two-term governor, who has said he'll announce his intentions on a possible White House run sometime after the legislative session ends Friday.
Daniels said in a statement Wednesday that the General Assembly's passage of the education bills put "the interests of Hoosier kids first, and placed Indiana first among the states in reforming and improving public education."
House Speaker Brian Bosma, R-Indianapolis, said Daniels is thinking of what's best for students, not his own political ambitions, when advocating the education overhaul.
"I'm sure he's not worried about a presidential run," Bosma said.
The bills approval Wednesday brought applause from state Republicans, school choice advocates and others who said Indiana would become a model for the rest of the country.
"Indiana is now at the forefront of a national movement that demands all children receive the academic tools necessary for success," State Superintendent for Public Instruction Tony Bennett said in statement.
Opponents say Daniels' agenda will hurt public schools by taking money and students away from them.
"He says that his motivation is to improve student achievement, but so many of these reform measures are not aimed at improving student achievement," said Nate Schnellenberger, president of the state's largest teachers union. "He wouldn't be siphoning public money from public schools if he was concerned about those students who remain at public schools."
The voucher proposal was a key reason behind a five-week boycott earlier this session by House Democrats, who returned to the state after winning concessions on the voucher bill and other legislation. Democrats also opposed other parts of Daniels' agenda.
The House voted 61-37 for Daniels' proposal aimed at expanding charter schools, which are public schools free of many state regulations. The bill allows more entities to authorize charter schools and lets charter schools cheaply buy unused buildings owned by traditional school corporations. The bill also increases accountability rules for charters.
Rep. Matt Pierce, D-Bloomington, said every dollar that flows to charter schools is going to flow away from public schools at a time when they are struggling to provide services.
"It's a zero sum game," he said.
Legislators previously have approved including merit pay for teachers and restrictions on teacher collective bargaining. Daniels has already signed the restrictions on collective bargaining into law and is expected to sign the other education bills in coming days.
The state is expected to get the most attention for the voucher bill, however. Vouchers are government-issued certificates that can be applied to private tuition, essentially allowing parents to use some of the tax dollars that would normally be sent to public schools at other institutions.
The vouchers themselves do not carry any additional expense for the state because they mainly transfer money between schools. But the bill includes a tax deduction of $1,000 for each child in a private school or home school. That will translate into a revenue loss of more than $3 million, according to the nonpartisan Legislative Services Agency.
Students receiving vouchers make up less than 1 percent of school enrollment nationwide, but vouchers have been one of the top priorities among conservatives. Indiana's program would be limited to just 7,500 students for the first year and 15,000 in the second, a fraction of the state's approximately 1 million students. But within three years, there would be no limit on the number of children who could enroll.
The actual value of the vouchers would be based on a sliding scale and would be less than the amount of tax money a public school would have received for that student. In the case of students in grades 1 through 8, the maximum value would be $4,500.