Legislation to force school districts to share money from property-tax referendums with charter schools is scheduled for a hearing Thursday in the House Ways and Means Committee.
The measure, House Bill 1072, says funding from future operating and school-safety referendums must be shared with charter schools attended by students who live in the school district. Its author is Rep. Bob Behning, R-Indianapolis, the influential chair of the House Education Committee.
An analysis by the state’s Legislative Services Agency suggests the bill could shift about $25 million a year from school districts to charter schools, which are publicly funded but independently operated. The impact would be most pronounced in cities with many charter schools, like Indianapolis and Gary. It would not apply to online charter schools or “adult high schools” like Goodwill Industries’ Excel Centers.
In 2020, the legislature changed the law so school districts could share referendum funds with charter schools but didn’t have to. That provision was controversial, in part because Senate Republicans sprung it as an amendment to unrelated tax legislation, with no opportunity for public input and little debate. Critics suspected lawmakers would change the law to require sharing. Sure enough, that’s what’s happening.
In Indiana, state government provides most funding for public school operations. In addition, about one in five school districts have been able to supplement state funding with local property tax increases approved by the voters. Property taxes also pay for school building and transportation costs.
Charter schools generally don’t get property tax funding. To help make up for that, the state gives charter schools per-pupil grants: $1,000 in the current school year and $1,250 in 2022-23.
To my knowledge, no school district has voluntarily shared referendum funding with charter schools, with one exception. The Indianapolis Public Schools board voted last year to share $500 per pupil from its referendum with “innovation network schools,” which are charter schools that have contracts to operate IPS schools. Board members said the schools were part of the “IPS family of schools.”
Under HB 1072, referendum funds would be distributed according to the percentage of students who live in the district and attend charter schools. In IPS, nearly as many students attend charter and innovation schools as attend regular IPS schools; so a lot of money from the referendum, if voters extend it, would go to charter schools. The IPS operating referendum raises about $30 million a year.
In the Monroe County Community School Corp., to use another example, about 4.7% of students attend charter schools. The district’s referendum raises about $11.7 million a year. If it’s extended at the same tax rate when it expires next year, a little over a half million dollars would go to two charter schools that local students attend.
The Ways and Means Committee will meet Thursday afternoon after the House session adjourns.