Legislators in a state considered a leader in promoting charter schools, earlier this month also passed a law mandating the Indianapolis school district, the state’s largest and where 60% of students attend charters, work with the mayor and charter officials on a plan to share busing and school buildings. 

The two laws share a common theme: Both continue Indiana’s steady march toward treating charters – public schools that operate outside the purview of traditional school districts — as equal parts of the state’s education system. And in different ways, the bills chip away at districts’ longstanding and exclusive control of local taxes, school buildings and busing, giving charters a greater claim to assets they have long coveted. 

The laws’ impact could extend even further, with national charter advocates saying other states could use Indiana as a legislative model to provide charters across the country with more resources.

Few states have created as “robust” a structure for sharing property taxes with charters as Indiana, according to Todd Ziebarth, a senior vice president of the National Alliance For Public Charter Schools.

“It’s a big step forward for charter school funding equity there,” said Ziebarth.  “It serves as a pretty powerful example to other states about what states should do for charter school students.”

“I think there’s a philosophical difference that people have…,” Ziebarth said. “Districts think ‘this belongs to us,’ whereas other folks think [it] belongs to the community. It’s been a philosophical split that’s been tough to break in a lot of places… and Indiana has done it.”

But school district officials say the state has only widened the gap between the district and charter families. Some Indiana residents have called the bills part of a plan to privatize education, pointing out that many public charters are run by private organizations.

“Many of our lawmakers, their top priority was not our children, but dividing our community,” Indianapolis school board member Allissa Impink said at the board’s meeting Thursday. 

Teachers unions and districts fought bitterly over the tax-sharing bill and a separate statewide tax cut that will cost districts millions more. So many in protest on April 14 that Indianapolis Public Schools and three other districts .

But Indiana charter advocates have praised the tax-sharing bill for closing what they see as an unfair gap in funding between charter and district schools, which one study estimates at , with districts spending $18,500 and charters $10,600. The difference in per pupil spending is mostly because, while district and charter schools receive state and federal aid, only school districts can raise money through property taxes. 

The new tax-sharing law would require that eligible charter schools receive a portion of local property taxes, funds that used to go entirely to districts for daily operations such as teachers’ salaries, books, hiring bus drivers and extracurriculars.

How much money each charter would receive would be based on the percentage of students living in the district who attend charter schools. The change could give charter schools nearly $4,000 more per student when fully phased in by 2031, advocates said. 

The new law affects an estimated 30 districts, including Indianapolis. 

Indiana isn’t the first to offer charter schools local tax dollars, but advocates say the state goes further than the limited ways other states do. Sometimes local property taxes are built into state school funding formulas, for example, or only charters created by the city or school district receive local revenue. 

The second law, aimed just at Indianapolis where charter students often have no transportation to school, would require city and school district officials to work with charters on a plan outlining how bus services and school buildings can be shared. 

“We’re really trying to share a significant number of assets that have never been shared before with charters and families,” said State Rep. Robert Behning, chair of the Indiana House education committee and author of the bus and facilities plan

Opponents of the plan say that gap could be addressed by giving charters more state money instead of splitting up local property tax funds.

“I want kids in all of our public schools to succeed, no matter the school type,” State Senator Andrea Hunley, an Indianapolis Democrat, said during the  debate on the bill. “But taking money from one of our systems that’s underfunded and giving it to another system that’s underfunded isn’t the way to do it, and it’s never going to be.”

The two laws come out of a state legislative session filled with conflict between districts and charter schools. Lines were drawn early, when legislators filed a bill that would wipe out the Indianapolis district and four others where charter schools educate the majority of students.

That bill never received a hearing, but drew an angry backlash from teachers, parents and district officials, particularly in Indianapolis, where charter schools draw increasing numbers of students away from district schools.

The tax-sharing bill followed soon after, with the Indianapolis Public Schools predicting the bill would force the district to close 20 schools, cut busing for students and likely hurt its partnership with some charter schools known as Innovation Schools.

The bill was scaled back before passing — delaying tax-sharing until 2028, phasing it in over four years and dropping a requirement that districts share property taxes passed specifically for building or updating school buildings.

It kept, however, the mandate that local property taxes for operations would have to be shared with charters. 

How much money would eventually be shared and the number of charters affected is unclear, which drew objections from Democrats as Republicans passed the bill. The state has estimated that $5.4 million would be shared in 2028.

The Indianapolis Public Schools has not shared its estimates of what the new laws would cost the district. 

Behning said his plan for the school district and charters to share and coordinate use of old school buildings and bus routes will also help the district pass tax increases. Charter school parents, the majority in the city, are more likely to vote for property tax increases if they will help their children’s schools. 

“There’s no way they could get a referendum approved right now if they did not voluntarily come together and try to do this alliance and try to figure out how to share,” Behning said.

Behning’s plan creates the Indianapolis Local Education Alliance which will review busing plans for district and charter students; along with sharing other resources such as available school buildings.The alliance will report its findings by Dec. 1. Recommendations are not binding.

The battle is playing out around three bills before the Indiana state legislature as it grapples with the rapid growth of charter schools, especially in Indianapolis. 

More than 60% of Indianapolis public school students attend charter schools, making the city a national leader to school choice advocates.

One of the three bills would have eliminated the Indianapolis Public Schools and four other districts, but failed to pass out of committee earlier this week. Instead, the bill that has gained the most traction would shift $80 million in local annual property taxes from school districts to charters. The move is aimed at closing a funding gap between district and charter schools which one study estimates at , with districts spending $18,500 and charters $10,600.

The state Senate passed that bill Wednesday after agreeing to delay some of the tax sharing until 2028. It now heads to the Indiana House.

State Sen. Linda Rogers, author of the bill, said local property taxes should “follow the student” to any school they choose, as state aid already does. 

“Local funding today… remains with the district, even though the student living in the district may not be receiving their education there,” Rogers said in a committee hearing on the bill last week that drew impassioned testimony from more than 50 supporters and critics.

“If you have thousands of students that you’re getting paid for, that you’re not educating, is that fair?” she added.

Kim Reier, vice president of strategy for the Indiana Charter School Alliance, said the state must stop “prioritizing institutions” like districts instead of individual schools.

“Families who choose charter schools still pay the same property taxes, yet those dollars remain locked in the districts that they no longer attend,” Reier testified.

But at the same hearing, Indianapolis Public Schools officials said the bill would devastate the district. Superintendent Aleesia Johnson said the bill would force the district to close 20 schools, cut busing for students and likely hurt its partnership with some charter schools known as Innovation Schools.

She also joined critics of charter school growth who say it has led to an “oversaturation” of schools in the city for the number of students.

“Because there are currently no limitations of the number of new charter schools that can be opened in our boundary, the dollars will continue to be more and more splintered until every school gets something, but no school gets enough,” Johnson said. 

The most extreme of the three bills — one that would wipe out the Indianapolis school district and turn all 50 of its schools over to charters — did not win enough support to even have a hearing. But it both loomed as a threat in case no funding changes pass and as a rallying cry for the district, which called on residents to fight to save its schools.

A third bill aimed at providing charters and private schools with two crucial needs — school buildings and busing — also awaits a hearing in the House Education Committee. That bill would appoint facilities and student transportation boards in Indianapolis and four other cities to take control of all district, charter and private school buses and buildings. Boards would include two appointees by the mayor, one by city council and two by state house and senate leaders.

The boards would then award buildings to school operators, district, charter and private, deemed most promising and coordinate busing for students of all schools in the city.

The bill calls for those panels to launch in the 2026-27 school year and take control of buildings over time, but legislators are considering delaying them to study how they would work. 

Rogers’ tax sharing bill drew support from charter schools, including the KIPP Indy and Adelante charter school operators, who run so-called Innovation Schools that have support of the school district and each have agreements to use varying combinations of school district buildings, buses and internet service.

Other prominent charter school operators, like the Paramount Schools of Excellence, which has four schools in Indianapolis, an online school and schools in Lafayette and South Bend, are not taking any public position.

Leaders of the Mind Trust and Stand For Children, nonprofit advocates of school choice, also testified in support of Rogers’ bill, praising it for trying to close a funding gap they say is unfair to charter students.

Both organizations, along with Rise Indy, another nonprofit, have been criticized in recent weeks by some Indianapolis Public Schools board members and residents for promoting charter schools using money from outside the state. 

Mind Trust CEO Brandon Brown said he is willing to “be a punching bag” if it leads to changes that help charter schools and students.

“I am happy to take any slings and arrows if it means that we’re going to be one step closer to a system that treats all kids fairly and with the respect that they deserve,” he said.

But teachers opposed the bill, as did parents of children in Indianapolis Public Schools.

Sally Sloan, executive director of the American Federation of Teachers of Indiana, said sharing tax money with charters would make school districts need more money and seek higher property taxes from voters.

And parents said they voted for property taxes to help the school district, not other schools.

“I just don’t think it should be the policy of the state to tell people how to spend their property tax revenue,” said Chris Kozak, parent of a student at the district’s Eleanor Skillen Montessori elementary school. “We voted for an additional levy for the Indianapolis public schools. I don’t think I would have voted for it if I had known this was going to come.”

Others called it “taxation without representation” since charter schools don’t have elected school boards.

“I think it’s another handout, an unearned handout, to charter schools, of which one in three will fail, most likely due to mismanagement, not because of outcomes,” said Mark Latta, father of a student at the Theodore Potter Spanish language elementary school. “Schools without public oversight are not public schools.”

Disclosure: The Mind Trust provides financial support to ����Ӱ��.

A state bill introduced earlier this month comes as elected officials tackle an issue facing cities across the country: how to share state and property tax dollars between public schools that are losing students and charter schools that are gaining them.

The bill targets districts where so many students have left for charter and private schools that fewer than half remain in district schools.

It would shut all five districts, including the Gary Community School Corporation near Chicago, by 2028. Schools would then be turned over to charter schools that would be overseen by new panels appointed by the governor, Indiana charter school boards and local officials. 

If passed, experts say it would be an unprecedented action against a city school district, reaching far beyond temporary state takeovers — and even the reshaping of New Orleans schools after Hurricane Katrina in 2005.

“It is sending a message to several school districts that things have to change,” said 

State Rep. Robert Behning, chair of the house education committee where the bill will have its first hearings. “Status quo is not okay.”

Behning said the bill goes too far for his comfort, but it is forcing a discussion about how to better support charter and voucher schools that are popular in the state.

“It’s actually encouraging some districts to come up with strategies that could improve academic success for all students,” Behning said.

“I authored this legislation… to find solutions in districts where the current governance is failing its students,” said bill author Jake Teshka, a Republican from the South Bend area.

In Indianapolis, less than 40 percent of students attend schools run by the district. Enrollment fell by more than 900 students in the last year to about 20,000. 

Nearly 27,000 other Indianapolis students attend charter schools or Innovation Schools, an the district helped create. 

The funding difference between traditional districts and charter schools is also driving the bill. A 2023 study found Indianapolis Public Schools spent $18,500 per student with the help of local property taxes, while charters spent roughly $10,600.

Bill author Jake Teshka, a Republican from the South Bend area, said it is unfair for parents that send children to charter schools to pay property taxes to the school district where charters receive little property tax money or transportation for students.

“Their property taxes are funding a school system they don’t attend,” he said in a written statement to ����Ӱ��. “This is an important conversation to have.”

Robert Enlow, president and CEO of EDChoice, a national organization promoting charter schools and vouchers, praised the bill for calling attention to the “monopoly” districts have on property taxes even as their enrollments fall and charters grow.

“They’re only educating 30 percent of the kids, and they’re getting 100 percent of the dollars,” Enlow said. “There’s a dramatic and systemic problem with districts who can’t even attract one out of two of their students.” 

The proposal drew immediate protest from the Indianapolis school board, which said the bill “threatens local authority and community control of public schools.”

The Indiana State Teachers Association also opposes the bill.

“Rather than supporting schools and addressing critical issues like poverty and underfunding, House Bill 1136 would unfairly target districts based on student transfers,” union president Keith Gambill wrote. 

The bill also has notable critics in the national charter community, who would prefer a more moderate way of providing charter and voucher schools more resources.

“It’s a bad idea, for several reasons,” said Michael Petrilli, president of the Thomas B. Fordham Institute, which backs school choice. Petrilli said districts serving only about half of the students still serve a lot of them and a change can’t happen quickly.

He also said the bill could also bring an unintended backlash.

“Proposals like these give ammunition to opponents who argue that charters are out to destroy traditional public education,” he said. “That’s not what the vast majority of charter leaders and educators are trying to do. We want the public schools to respond to competition and get better.”

He added, however, “If policymakers wanted to force IPS and similar districts to close some of its under enrolled schools, that I would support.”

The National Association of Public Charter Schools directed questions to Scott Bess, a member of both the Association’s board and of the Indiana State Board of Education. Bess is also founder of the new Indiana Charter Innovation Center, which is

Bess wants to find more ways to share property tax revenue, busing and school buildings with charter schools. He’d like to expand on two bills the state legislature passed in 2023 that – gains from both increased property values and from passing new taxes – with charters based on the percentage of students they serve.

“If a charter school has 10% of the students who live in that district, then they would get 10% of the proceeds,” Bess said.

He also wants the state to create a regional board as a pilot program to treat all charter, private and district schools in a region as common property, then allocate buildings and busing to operators as best serves students.. Such a plan would be similar to states that have countywide school districts that share all resources with charter schools, he said, 

For such a board to work, districts and charters alike would have to  give up control of buildings and money to the board. That could be a sticking point, Bess said.

“This is where everything gets complicated,” Bess said. “This is why no one has solved this issue across the country, because it’s really complicated.”

Several other local officials, including two former Indianapolis mayors, have joined the call to send more resources – cash, busing or buildings – to charters. In a letter to the Indianapolis Public Schools, they in the city.

“We call on IPS and legislative leaders to ensure all public school students within IPS boundaries are served by a system that uses its resources fairly and efficiently,” said the letter from former mayors Bart Peterson and Greg Ballard joined by four other current or former city and school officials.

Maggie Lewis, majority leader of the Indianapolis City-County Council and a signer of the letter, said she opposes the bill to close the district. She wants the school board to be part of a local plan to help charters, not one forced by the state. She also said that penalizing the district because it lost students to Innovation Schools it helped create sends the wrong message.

“For over two decades, Indianapolis has been known as a hotbed for education innovation,” the letter states. “Now it is time for Indianapolis leaders to ensure we sustain this progress through needed structural changes.”