The Indianapolis Public Education Corporation voted unanimously Monday to ask voters in November to approve a four-year property tax rate of 37.2 cents per $100 of assessed value to fund the city's public schools — both Indianapolis Public Schools and the charter schools inside the district's boundary.
The rate would generate about $87.8 million a year, split evenly between IPS and about 60 charter schools — close to $43.9 million each — and would take effect in 2027.
For a home at the district's median assessed value of about $150,000, the rate would cost roughly $221 a year. That's about $8.71 a month, or $105 a year, more than the current rate, according to a board presentation.
The board, known as IPEC, is a new mayor-appointed body the Indiana General Assembly created this year under the same law that lets charter schools share referendum money. IPEC took over the power to set school property tax rates from the elected IPS board, and the referendum is its first major decision.
Money raised would go toward services for students with disabilities and those learning to speak English, teacher and staff pay and retention, and student programs such as work-based learning.
About 42,000 students attend public schools inside the IPS boundary — across traditional district schools, semi-autonomous innovation schools and independent charter schools. Roughly 85% are students of color and about 30% are English learners.
Even at the higher rate, IPS would need to cut about $20 million more from its budget, said acting executive director Michael O'Connor, on top of $24 million IPS has already announced as its 2018 property tax referendum expires at the end of the year and leaves a roughly $40 million gap. The district has also laid off dozens of employees.
"It will require very difficult cuts to be made," O'Connor said.
IPEC discussion
The unanimous vote followed a pointed discussion by IPEC members, and IPS commissioners who sit on the board said they backed the rate only reluctantly, arguing the money still falls short.
Before the board settled on 37.2 cents, IPEC member and IPS board President Hope Duke Star moved to set the rate higher, at 42 cents, but the motion failed.
IPS Commissioner Ashley Thomas said state and federal underfunding left the district facing a roughly $50 million special education gap, about $40 million of it at IPS, and called the referendum "still just not enough" while vowing to press for more. Commissioner Deandra Thompson urged the district to rethink how it delivers education and to use technology to extend its best teachers to more students.
John R. Hammond III, a community member on the board, said he considered voting no and would have preferred a lower rate or a shorter two-year term, but supported the measure in the end.
"Our job now is to save this school corporation and to benefit our kids," Hammond said. “And to benefit our kids in a way that we're providing the best absolute quality education and having people move back into this district for that quality education.”
Patricia Castañeda, another community member, said she wanted a higher rate but concluded 37.2 cents was responsible after meeting with retired homeowners on fixed incomes who said even less would strain their budgets.
IPEC chair David Harris described the goal as landing on "not a perfect number, because there is no perfect number, but the right number." After the meeting, he said he was encouraged by the overall support for the city’s public schools by those who testified and IPEC board members who spoke openly about their concerns.
Where the funds go
Most of the money for both district and charter schools comes from the state, through per-student tuition support funded by sales and income taxes. Property taxes make up a smaller share — about one third of IPS revenue — and mainly pay for buildings, buses and day-to-day operations. A voter-approved referendum is one of the few ways schools can raise operating money above Indiana's property tax caps, which limit most homeowners' bills to 1% of a home's assessed value.
This referendum differs from past IPS measures in a key way: for the first time, charter schools that enroll students living inside the district boundary can share the money.
But the gap that change aims to close is wide. The 2018 referendum provides about $2,300 per student in support for IPS district students, according to presentations to the board. Charter schools that partner with the district received far less — about $500 per in-district student — and independent charter schools, which enroll thousands of students inside the boundary, have received nothing at all.
Extending that level of support to every public school student in the IPS boundary was a central goal for the lawmakers who created IPEC, and the board has framed its own work — over funding, transportation and facilities — around giving district and charter students equal access.
Reaching even a break-even budget at 37.2 cents assumes more than the $20 million in cuts. IPS would also need about $10 million more in efficiencies, roughly $12 million it wants reimbursed by innovation schools for services IPS now provides, and state help on the special education and English-learner gap — a cost IPS and IPEC argue the state should cover.
O'Connor pointed to school closures, consolidations and mergers, noting some buildings run at about 42% capacity of student enrollment. He said the district has "too many seats for too few students" and would make the cuts over the next two to four years.
Indianapolis Public Schools Superintendent Aleesia Johnson, whose administration recommended a higher rate, said in a statement that a "yes" vote in November remains essential to stabilizing funding for every classroom and called on families and community partners to support it. She said the district has a record of responsible stewardship — raising teacher pay, expanding academic programs and upgrading facilities — and would remain transparent as it makes cuts.
Johnson said if the new referendum is approved, the district will need to cut an estimated $20 million more for 2027-28. She said IPS would approach those decisions "with thoughtfulness, intentionality, and open communication" and begin immediately.
Johnson also pressed for help beyond the ballot, urging schools, families, businesses and the IPEC board to lobby the Indiana General Assembly for more state funding, particularly for students with disabilities and English learners.
"We need your voice at the Statehouse in January," she said, "but, first, we need your 'yes' vote for the operating referendum in November."
The Indy Chamber, an influential business group that helped stop an IPS tax increase in 2023, backed the new rate. Indy Chamber Board Chair Jeffrey Harrison called 37.2 cents "a historic level of investment in public education" while pressing the district to keep cutting costs and right-sizing its footprint.
The ballot question must go to the Indiana Department of Local Government Finance in late July to appear on the Nov. 3 ballot.
Eric Weddle is WFYI's education editor. Contact Eric at eweddle@wfyi.org or follow him on X at @ericweddle
