12-02-2025
‘Gutting our community': Lawmakers advance bill that could close 20 schools, IPS says
Indiana lawmakers advanced a property-tax sharing bill on Tuesday that Indianapolis Public Schools leaders say would require it to close 20 schools, cut funding and lay off staff.
But charter schools that would benefit from the legislation say they just want the students who attend their schools to get an equitable piece of the pie in terms of the millions of dollars in property tax revenue that are going to traditional public schools.
Senate Bill 518, which would require all traditional public-school districts, including IPS, to share property tax revenue with certain charter schools in their attendance boundaries, passed out of the Indiana Senate Tax and Fiscal Policy Committee on Tuesday along party lines, with all Democrats on the committee voting against the bill. The bill will now move to the Senate floor for consideration.
The proposal was part of a flurry of legislation filed by lawmakers this legislative session that would impact IPS, as Republican leadership and some Democrats sought to encourage the district to share more resources with charter schools. The messy debate even spilled over into the Indianapolis City County Council, where a member was ejected from the Democratic caucus over the disagreement.
IPS Superintendent Aleesia Johnson said the changes being proposed under Senate Bill 518 and other bills would amount to "gutting our community" by causing a $40 million impact to the district as soon as 2026. That could grow to an $80 million impact by 2028. She said property tax cuts under discussion in Senate Bill 1 would also impact IPS.
"This bill would guarantee the closure of at least 20 schools and the elimination of hundreds of jobs in our district," Johnson said. "This bill asks a taxpayer to support a seemingly ever-growing number of schools with no expectation of what they can expect in return."
But proponents of SB 518, including charter schools, say it's designed to address a fundamental unfairness in the existing school funding model. They say parents' property tax dollars should follow the child when they choose to attend charter schools instead of traditional districts.
"It is simply unacceptable to me that a student who chooses a different public school than the one to which they are geographically assigned should receive thousands less in educational funding annually," said Sen. Linda Rogers, R-Granger. "I think it's time that a parent who chooses to send their child to a public charter school has their tax dollars following their child and educating their child."
More: The bill to dissolve IPS might not move. Are lawmakers using it as a bargaining chip?
The bill would impact a variety of school districts beyond IPS and Indianapolis, including the traditional districts in Gary, Anderson, Muncie, South Bend, Hammond, East Chicago, Fort Wayne, Elkhart and Lafayette.
The statewide fiscal impact of the bill as approved in committee on Tuesday is currently unclear. The original fiscal analysis prepared for the bill said it would have shifted at least $124 million to charter schools and $435 million to other public schools.
However, lawmakers removed a requirement for traditional public-school districts to share property taxes with each other, so the fiscal impact is likely to be different now.
In addition, the revenue-sharing rules do not apply to districts where less than 100 students who have legal settlement are choosing to attend charter schools. That limits the scope of the bill and likely removes many rural school districts that don't have charter schools in their footprint.
Districts who say they would be hurt by the bill need to "right-size their school corporation for the number of students they are educating," Rogers said.
At least 20 people testified on Tuesday about how the bill would directly impact IPS, which collected about $90 million in property taxes overall in 2023. IPS already has to share some of its property-tax revenue with charter schools, but it's currently limited to new revenue.
Chelsea Thompson, principal of IPS' William Penn Middle School, said the bill would harm the 6,000 students in work-based learning programs. Thompson called it a "catastrophic budget cut."
"Crippling this district cripples the city and cripples your state," Thompson said. "People are in our corner."
Several IPS parents said the district is embarking on needed change and reform through its Rebuilding Stronger plan, which has already resulted in closures and reorganization.
However, the bill also applies to several other districts throughout Indianapolis and statewide.
"We're talking about our entire state," said Speedway resident Megan Bickle. "If charter schools need more money, they need to take that question to the voters and ask it themselves."
Sen. Fady Qaddoura, D-Indianapolis, said other districts than IPS would "absolutely" be impacted, including Washington, Pike, Lawrence and Wayne townships.
"Every school is set to lose money under this very low threshold because it is unfairly targeting only one direction of transfers and not the other direction," Qaddoura said.
He said, for instance, that while about 300 Washington Township students left the district for charters, about 500 students "transferred the other direction." The bill doesn't account for that, he said.
Meanwhile, charter leaders in several areas of the state testified in support, including Jean Hitchcock, executive director of Signature School charter in Evansville.
Hitchcock said the school performs wells even though it gets about $2,000 less per student on average than other public schools.
"Our teachers are paid less, and we want to build a middle school, but can't because of funding issues," she said.
The committee's discussion and testimony was contentious at times, as traditional public-school supporters and charter school advocates clashed.
Qaddoura, D-Indianapolis, said charter schools weren't as accountable to the public as traditional public schools.
"This will be a precedent by which you're giving property taxes to schools with boards that are not elected," Qaddoura said. "So how do you expect not elected folks to manage taxpayer dollars and be held accountable to the same level as elected officials?"
But Rogers said charters are held accountable by the authorizers that oversee them.
"Very often, if they're not doing what they should, they will actually close that school," Rogers said. "How often do you see a traditional public school close?"
Hillary Brown, a member of IPS' parent council, said the proposal "prioritizes politics over responsible funding."
"Charter schools often lacked accountability, mismanage funds and leave families in crisis," Brown said. "Meanwhile, our public schools ... will face cuts, closures and layoffs."
Charter school advocates pushed back against several claims made at the bill hearing, saying they thought too much focus was being put on school type as opposed to the choices of families.
Kim Reier, vice president of strategy for the Indiana Charter School Alliance, said property taxes paid by parents are "locked in the districts that they no longer attend."
"You heard claims that this bill would devastate districts or undermine Indianapolis voters who approved a $410 million IPS referendum, but the reality is that families choosing charter schools are seeing their tax dollars held hostage in a system they opted out of," Reier said.
Brandon Brown, CEO of The Mind Trust, said that IPS' property tax revenue has grown substantially over the last several years, but 60% of public-school students within the IPS boundary currently attend a charter school.
"All of that money is locked in a school district that serves less than 40% of public-school students," Brown said.
However, Sen. Andrea Hunley, D-Indianapolis, said that much of the argument was unproductive and a "red herring," saying the real issue is that all public schools are underfunded and being pitted against each other. She called for a conversation about fair funding that doesn't destabilize Indianapolis.
"What this bill did was pit neighbor against neighbor," Hunley said. "We are not operating from a place of scarcity. We do not need to pit our community against one another in order to save pennies at the state level. ... What we need to do is zoom out."
IndyStar reporter Brittany Carloni contributed to this story.
Contact senior government accountability reporter Hayleigh Colombo at hcolombo@
This article originally appeared on Indianapolis Star: Indiana bill to share school property taxes with charters moves ahead
