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Charter schools scored significant funding wins in the legislative session that wrapped up this week.
Indiana lawmakers passed legislation that grants property tax revenues to charter schools statewide starting in 2028, a change that expands on a 2023 law that required only certain districts to share a portion of property tax revenue increases with charters.
Charters will also continue to receive $1,400 per pupil through the state’s Charter and Innovation Network School Grant over the next two school years.
One setback for charter schools statewide is that lawmakers decided not to continue a $25 million grant they created for charters’ capital needs in 2023. However, at least in Indianapolis, that could be offset by the property tax revenue charters will receive for the first time this year under the 2023 law. And over the long term, a new group will study the possibility of sharing Indianapolis Public Schools buildings and buses with charter schools.
“I don’t think it’s hyperbole to say this was the most successful legislative session for charter schools since the law passed in 2001,” said Brandon Brown, CEO of the Mind Trust nonprofit that grows charters in Indianapolis, referring to the law that allowed charters to open in Indiana. ”It was just an extraordinary session, from my perspective, in terms of moving towards a system where all kids are funded fairly.”
Meanwhile, Indianapolis Public Schools and other districts in areas with several charters will face more financial pressure in the coming years as the state enacts property tax reform that will slash a key component of school district revenues.
In February, IPS told lawmakers that it would need to close multiple schools and lay off staff under the property tax sharing and tax reform bills legislators were considering at that time. Earlier this month, the district estimated it would lose $96.8 million from 2026 to 2032. But the exact impact the session’s activity will have on the district is unclear.
IPS did not immediately respond to a request for comment Friday.
Funding increases won’t occur until 2028
Most funding increases for charter schools won’t take place until 2028, when state law mandates that districts must begin sharing property taxes used for operating expenses.
The total amount for charters will be phased-in over a period of four years, so that charters receive 25% of the expected amount in 2028, 50% in 2029, 75% in 2030, and the full amount by 2031.
Charter schools could also see additional funding if districts approve and pass an operating referendum before 2028. The new law requires districts to share that referendum funding if more than 100 students and more than 2% of its overall student population attend charter schools.
The Mind Trust estimates that on average, charters enrolling students living within IPS borders would get roughly $2,050 per student in property taxes in 2028 — assuming the district asks voters to pass a new operating referendum to increase property taxes.
By 2031, the group estimates roughly an additional $3,750 per charter school student.
But for KIPP Indy, which runs three charters that are all a part of the IPS network of autonomous Innovation Network schools, the extra funding won’t be a financial boon in the near-term.
That’s because KIPP Indy is slated to send most of it back to IPS to pay the full cost of the transportation and facilities management services the charter network uses, said KIPP Indy Executive Director Andy Seibert.
But eventually, Seibert said, the network hopes to use the extra funds to sustain its transportation and facilities.
“Right now, we’re using general operating dollars to do some of that work,” he said. “Those will be more dollars that we’ll have freed up to continue to do things like invest in teacher compensation, and invest in high-quality, well rounded offerings for students.”
Charter schools lose capital grant
Lawmakers stripped funding for the state’s charter capital grant, a $25 million appropriation first allotted in fiscal 2023-24.
That funding, charter advocates say, amounted to roughly $600 per pupil over the two-year period.
While advocates said they would have appreciated the funding, they understood the financial constraints lawmakers faced as they sought to trim the state budget.
Charters in four counties already receive a portion of the increase in property taxes for the first time this year under a law passed in 2023.
That should soften the blow of losing that capital grant funding for most charter schools, said Scott Bess, president of the Indiana Charter Innovation Center. He estimated roughly 7,500 charter students outside of those counties would be fully affected by the loss in that capital grant statewide.
Charter schools secure zoning wins
Another provision added to House Bill 1515 allows charter schools to be a permitted use in all types of municipal zoning districts.
The change to state law comes after a contentious fight in Washington Township over the rezoning of a former church property for use by the charter school Girls IN Stem Academy.
Amelia Pak-Harvey covers Indianapolis and Lawrence Township schools for Chalkbeat Indiana. Contact Amelia at apak-harvey@chalkbeat.org.
