Indiana voters will likely see far more school referendums on the November ballot this year than in recent elections. School finance experts estimate 40 to 50 districts could ask voters to approve local property tax measures, driven by a series of changes to state law.
The biggest factor is Senate Enrolled Act 1, the property tax law Gov. Mike Braun signed in 2025. The law increases property tax deductions for homesteads, which means less property tax revenue will flow to school districts.
The Indiana Fiscal Policy Institute estimates that districts in 2028 won’t receive a total of $338 million in previously projected funds because of the change in law.
Another change in state law now requires school referendum questions to appear only on the November general election ballot in even numbered years. That gives districts only one chance every two years to pass a referendum. Previously, districts could put a question on either the primary or general election ballot.
School districts whose current referendums expire before 2028 are pressed to get the question in front of voters in time to prevent large funding gaps.
To understand why local referendums matter so much, it helps to go back to 2009 when the state made major changes in school finance formulas, leaning more heavily on state revenue generated through sales taxes, individual income tax and other levies. As a result, many school districts came to rely on additional funds from local property-tax referendums to consistently finance teachers, staff and academic programs.
Indiana caps property taxes based on property type. But if voters approve a local referendum, property tax bills can exceed the cap, with the surplus directed to the local school district.
Jeff Butts, the executive director of the Indiana Association of Public School Superintendents, said the changes also force districts into the complicated task of guessing, sometimes years in advance, about various economic factors to determine the right referendum rate.
“So you're trying to project out eight years from now, what does inflation do, what does our economy do, what might the state do with state support and several other factors to determine what the ask will be at the local level,” Butts said.
During discussions over SEA 1 last year, lawmakers defended the move by saying schools would still see an increase in funding from property tax revenue, but it just wouldn’t be as high as previously anticipated.
However, Scott Bowling, the executive director of the Indiana Association of School Business Officials, said that’s not the case everywhere.
“Our data is showing that there will be schools that may receive less revenue locally in 2029 than they got in 2025,” Bowling told WFYI. “So that is not a decrease to the increase, that is a real meaningful cut, especially in the inflationary environment we're talking about.”
Bowling also said he expects fewer than 50 districts going out for a referendum this year. But that is still much more than normal.
Some districts may not even ask voters to increase their rates at all. The MSD of Washington Township, for example, is considering asking voters to renew its current rate of 25 cents.
One area that could potentially see many referendums is in the northern Indianapolis suburbs. So far, Carmel, Zionsville, Noblesville, Hamilton Southeastern, and Westfield Washington school districts have discussed possible referendum votes.
Districts have until early August to approve a referendum ballot question to ensure it appears on the November ballot.
Sharing property taxes with charter schools affects some
Another change in state law approved last year required a phased-in approach to sharing local property tax revenue with charter schools starting in 2028.
Historically, charter schools across the state have not had access to property tax revenue. Charter schools are tuition-free public schools managed privately by nonprofit boards rather than elected officials.
The areas where this will have the greatest impact on school districts are Marion County and parts of Northwest Indiana, where the state's largest concentration of charter schools is located.
Indianapolis Public Schools had previously said this change would cost them $97 million from 2026 to 2032. However, now IPS must allow a new appointed board, the Indianapolis Public Education Corporation, to set a new referendum rate.
The board was created by new legislation passed earlier this year, designed to reshape the Indianapolis education system so that resources are used more efficiently and equitably across the district’s public schools.
IPEC is currently in the process of considering what new referendum rate would be best needed to now serve both IPS and charter schools in the city.
IPS Superintendent Aleesia Johnson presented a range of possible rates that could cost taxpayers anywhere from $6.26 to $25.49 per month in new taxes.
Heightened political tension complicating referendum campaigns
A separate law that could complicate districts’ referendum plans: school board members can now declare a political party when running for their positions.
Butts said he worries this could incentivize certain candidates to use an anti-referendum platform as part of their campaign to get on the school board.
Political tension around passing school referendums has been on the rise in recent years and even prompted high-profile officials like Lt Gov. Micah Beckwith to actively campaign against Avon School’s referendum last year.
Butts worries that slates of candidates, like those seen in previous school board races in conservative-leaning areas of the state, could campaign against passing referendums that would raise taxes.
As the former superintendent of MSD of Wayne Township, Butts has weathered referendum campaigns and said he’s familiar with the kind of heated attacks that he believes are likely headed into the November election.
“There'll be a lot of personal attacks against people that are trying to do the best for the school districts and for children, while also trying to be good stewards of the dollars that the taxpayers are giving them to do that work,” Butts said.
What’s at stake if referendums fail?
The impacts of SEA 1 vary across Indiana districts because funding is based on each district’s assessed property value.
Some district leaders have already said that if a new referendum rate isn’t approved, it would likely mean job cuts, loss of school programming or transportation changes.
“You'll see other stuff too like over on the maintenance side, where schools will wait longer before they repair or replace a roof,” Bowling said. “They'll let their parking lots go for a long period of time.”
Carmel Clay Schools has said it expects an average gap of $15 million per year starting in 2027.
The district is considering asking for a new referendum rate, as high as 43 cents per $100 of assessed value, to sustain their current staffing levels and programming. If a new referendum doesn’t pass the district may have to cut 197 staff positions.
At the most recent Carmel school board meeting, all of the board members agreed that shouldn’t happen.
“I don't want to be part of a reason or part of the board that has to sit here and figure out what we have to cut, that's not something I'm comfortable with,” said board president Jon Shapiro at its meeting last month.
The board is anticipated to vote on its referendum question during its June 24 meeting.
The general election is Nov. 3.
Contact Government Reporter Caroline Beck at cbeck@wfyi.org
