Charter school funding proposal heads to Monday vote in House GOP tax overhaul

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The plan to divide local property tax revenue between traditional school districts and charter schools is now part of the Indiana House Republican's push for property tax relief.

Late Friday, House Speaker Todd Huston (R-Fishers) announced the controversial school funding language from Senate Bill 518 would be folded into an amendment for the reform package in Senate Bill 1.

“We think it is clearly consistent with our policies,” Huston said at a press briefing at the Statehouse. “Following the long-term practice of money following the kid.”

A vote on the amendment is scheduled for 10:30 a.m. Monday in the House Ways and Means Committee. If approved, it would then go to the full House. The amendment, which was only briefly described to the media, is not expected to be made public until Monday.

More: House Republicans unveil property tax reform plan that aims to help a majority of homeowners

As of Friday, the potential impact on traditional school districts was unclear from the proposed property tax reform or the new charter school funding plan. Some school districts warn that a cut in local revenue will impact the classroom and other education services.

A previous version of the SB 518 proposal was projected to shift more than $370 million in property tax revenue away from public schools over three years.

Huston emphasized that the requirement for districts to share both regular property tax levies and voter-approved referendums with eligible charter schools would not begin until 2028.

The operations fund consists of local tax revenue that supports non-classroom expenditures such as transportation, bus replacement, and capital projects.

The funding share would be phased in over four years, replacing a previous tiered approach. The original version gave districts with more than 5,000 resident charter school students—such as Indianapolis Public Schools—a five-year phase-in.

“It is a long way out, and we will have a lot of different discussions then,” Huston said.

The legislation no longer mandates that districts share debt service levy funds with charter schools.

Charter schools are tuition-free public schools managed privately by nonprofit boards instead of elected officials. These boards operate under contracts granted by one of several state-approved authorizers.

House Democrats, including Rep. Greg Porter (D-Indianapolis), said Indiana schools will lose money under the Republican tax plan.

“This plan encourages local governments to raise their local income tax rate, so you’ll get more money in your right pocket but have to pay more out of your left,” Porter said.

In February, Sen. Linda Rogers (R-Granger) author of SB 518, said the phase-in would give school districts “plenty of time” to adjust their budgets while the full impact of property tax relief is realized.

Huston said funding for charter schools in the original House budget would remain in the two-year spending plan. That includes a $1,400 per-pupil charter grant and a $25 million annual charter capital fund.

WFYI statehouse reducation eporter Rachel Fradette contributed to this story.

Eric Weddle is WFYI's education team editor. Contact Eric at eweddle@wfyi.org or follow him on X at @ericweddle.