(This story is one in a series exploring the basics of key issues in education in Indiana. For a list of the issues and links to the other stories in the series, go here.)

Charter schools are publicly funded but privately operated public schools that are tuition-free. The schools are overseen by governing boards that report to a sponsoring organization that gives the school permission to operate and can close down schools that don’t meet academic performance goals. Some governing boards hire for-profit or non-profit management companies to run the schools.

Charters are controversial. Proponents argue that they create more options for students to find a good fit for their interests and skills and create competitive pressure for all schools to educate students better in order to attract higher enrollment and the state aid dollars that come with those students. Critics say the schools are no better, and often worse, than the traditional public schools from which they drain students and money and that the schools are less publicly accountable as their boards are not elected.

The charter school movement in Indiana differs from other states’ in that it’s been a little slower moving, differently managed from most places and, proponents argue, somewhat better in quality overall than in other parts of the country.

The mayor’s unusual role

Indiana’s 2001 charter law remains the only one in the country that gives a city mayor — the mayor of Indianapolis — the ability to sponsor charter schools. Both ex-mayor Bart Peterson, a Democrat, and current mayor Greg Ballard, a Republican, have aggressively chartered schools in the city.

Originally, charter sponsoring also was available to universities and school districts. But for a decade the Indianapolis mayor was joined by just one other major sponsor — Ball State University. With just two active sponsors, charter schools expanded more slowly in Indiana than in most states with more expansive laws.

Perhaps as a result, Indiana’s charter schools looked different in other ways, too. For one, there were more homegrown charter schools in the Hoosier state and fewer national organizations operating charters in the state. Examples of homegrown charters are the Tindley Acclerated School, Christel House Academy, and Herron High School. There were some national chains, notably Concept Schools, Heritage Academies and KIPP (Knowledge is Power Program).

Sponsoring expands

Today, Ballard is still the only mayor in the country sponsoring charters. But in 2011, the legislature expanded chartering authority in two ways. It allowed private, nonprofit universities to sponsor charters and created a new statewide charter school board with sponsoring powers.

The law has helped fuel a recent expansion of charters. In 2012 and 2013, 21 new charters have opened, or a 50 percent increase. Also helping the expansion is a cooperative effort by the mayor’s office and The Mind Trust, an Indianapolis-based education reform organization, to create a charter school incubator. The effort seeks to aid high-performing charters to replicate with new schools and to attract high-performing charter organizations around the country to come to Indianapolis.

Concerns also have been raised about whether more sponsors allow schools to “shop” for more accommodating oversight, allowing schools that are less likely to perform well to avoid accountability. In 2015, the legislature is considering new limits on charter sponsors aimed at preventing charter shopping.

Performance debated

There is considerable debate about the performance of charter schools in Indiana. Critics point out that charters generally rank in the bottom half of schools in the state for test performance, but advocates argue they compare well against the schools they were designed to compete with — those with high poverty and other challenges located nearby.

A pair of studies by Stanford University have shown Indiana’s charter schools have generally performed well when compared to charters in other states. The study’s authors have argued that the Hoosier state was helped by mostly choosy sponsoring by the Indianapolis mayor’s office and Ball State, which both rejected far more charter applications than they approved.

And yet the authors were critical of Ball State for allowing a small number of low-performing charters to keep operating. Soon after, the university ordered several of the low performers closed in 2013. A few managed to stay open by finding new sponsors, raising questions about whether Indiana’s charter law is strong enough to force low performers to close when their sponsors believe they should.

Access to new funding

In the 2015 legislative budget debate, Gov Mike Pence pushed for a big $1,500 per-student grants for charter schools for outside-of-the-classroom costs like buildings and busing. That would have cost the state about $90 million over two years. Instead, the legislature set aside $10 million for grants of up to $500 per-student to help charter schools with those costs.

But all charter schools won’t qualify. Only those that received either an “A,” “B,” or “C” grade from the state or can show they out-perform nearby traditional public schools are eligible.

The issues ahead

On the horizon, along with more charter schools, are questions about whether charters and school districts can forge working partnerships, especially in Indianapolis.

In 2014, the Indiana legislature passed a bill giving IPS the authority to hand empty buildings over for charter schools to use, or to hire charter school operators to run an IPS school.

Under these “innovation school” partnerships, IPS could count partner schools’ test scores in district averages. Charters would get space in IPS buildings and possibly district services like transportation and special education as well. The first such partnership will be wlith the Phalen Leadership Academy charter school at IPS School 103 in the fall of 2015.

The idea behind the bill, which IPS superintendent Lewis Ferebee helped craft, was strongly opposed by by unions and Democrats.

The Indiana State Teachers Union has argued the bill creates a newly uneven playing field for teachers when it comes to their bargaining rights. The bill permits the charter operators to hire teachers for the schools they run — even if they remain IPS schools — and disregard the district’s union contract when deciding what the pay and benefits will be.

In 2012, annual teacher pay in Indianapolis charter school, on average, was $10,000 to $25,000 less than IPS.

Also the state has seen a trend toward expanded offerings of online and blended learning charter schools, which shift some or all instruction to online venues. More than 10 such schools are on the drawing board to open in the next five years.

Can the city sustain so many new schools along with the traditional public and private school networks? Or can charters and traditional schools work more closely to share services and building space? Those are big unanswered questions going forward.

-Updated December 2015