Taxation without representation?

There’s a tradition in Indiana that, if we pay for a government service through property taxes, we can use our votes to influence how the money is spent. We elect city, county, town and township officials. We elect school boards. We elect the people who appoint library and fire district boards.

If we don’t like the way our taxes are being spent, we can vote for different officials. We can run for office, try to get elected, and change how the institutions are run.

But look for the Indiana General Assembly to scrap that idea in its 2023 session, which begins in January. Lawmakers may require that our property taxes help pay for privately operated charter schools.

Would that amount to “taxation without representation,” the grievance that helped inspire the American Revolution? One could argue that it would.

I emailed Larry DeBoer, emeritus professor of agricultural economics at Purdue University and an expert on local government finance in Indiana, to ask if he could think of precedents for giving property taxes to entities that don’t answer to the voters. The closest he could come up with was a “mandate of funds,” in which a judge can order local government to pay for unexpected court expenses.

“Judges are elected, though, so it’s one elected body forcing another elected body to pay its expenses,” he said.

Under Indiana’s system of funding schools, the state provides money for operating expenses, such as teacher and staff salaries, on the same basis to public school districts and charter schools. But districts, unlike charter schools, can levy local property taxes to pay for buildings and transportation.

To help make up the difference, the state gives charter schools an additional $1,250 per student. Charter school advocates say that’s not enough to level the playing field. Increasingly, they have suggested their schools should get the same funding, per pupil, as public schools.

School districts – but not charter schools — can also turn to the voters to approve additional property tax funding, both for operations and buildings. Districts can share those funds with charter schools, but they don’t have to.

That’s what brought the issue to a boil. Indianapolis Public Schools officials are planning a May 2023 referendum to raise property taxes to fund the district’s Rebuilding Stronger plan. Charter schools – and there are dozens of them in the IPS district – want a significant share.

“Every student who lives in the district and attends a school within IPS boundaries should benefit from this referendum,” charter school leaders said in a letter to IPS officials.

IPS Superintendent Aleesia Johnson said that’s not going to happen. The district will share with “innovation network” schools, charter schools that have contracts with IPS. But giving referendum revenue to charter schools that aren’t affiliated with the district “provides no mechanism for the IPS administration or our publicly elected Board of School Commissioners to oversee those funds – which amounts to spending without accountability,” Johnson said in a statement quoted by news media.

That leaves charter supporters with several options. They can use their considerable political clout to try to defeat the IPS referendum: in effect, to punish IPS and its students for not sharing. They can call on their friends in the General Assembly to force IPS – and other school districts – to share referendum funds with charter schools, an approach that lawmakers teased last session. And they can call on the legislature to boost the extra $1,250 in per-pupil funding that charter schools receive.

Regarding Johnson’s statement, charter advocates said the schools are accountable through their authorizers, which approve their charters or operating agreements. In Indianapolis, many are authorized by the mayor’s office. Other authorizers include the Indiana Charter School Board, whose board members are appointed by the governor, legislative leaders and the state secretary of education; Ball State University, Trine University, Grace College and Calumet College; and three school districts.

The mayor’s office conducts annual evaluations of its charter schools, while other authorizers seem to look at their performance when it’s time to extend the multi-year charter agreements. But the schools’ day-to-day operations are overseen by their school boards, typically chosen by leaders of the schools.

Those boards aren’t elected, and neither are the people who appoint them. They can’t be voted out.

DeBoer, the Purdue expert, cautioned it could “get pretty tricky” to argue this constitutes taxation without representation. After all, state legislators are elected, and they’re the ones who write the rules. They’re supposed to represent us.

In practice, however, most lawmakers serve in gerrymandered districts and don’t have to worry about an election challenge, except in a party primary. For many Hoosiers, they may seem as distant and unaccountable as King George III and the British Parliament were to the American colonists.