Court: IPS exempt from $1 charter law, can sell closed school buildings

Updated: Tuesday, Nov. 14, 2023 1:30 p.m.

Indianapolis Public Schools is exempt from a law that requires districts to sell closed school buildings to charter organizations for $1, a Marion Superior Court judge ruled Monday.

The decision allows IPS to move ahead quickly this week to sell a school that was closed earlier this year as part of an effort to address declining enrollment. It also caps a fast-paced, contentious legal fight that pitched the state’s largest school district against school choice advocates, the Indiana Department of Education, and Attorney General Todd Rokita’s office. 

The IPS Board of School Commissioners, who initiated the lawsuit, said in a statement they were grateful for the judge’s ruling.

Tuesday, a spokesperson from Rokita’s office did not respond to a question if an appeal would be filed, but said the office would defend the law.

“The General Assembly intended for charter schools to thrive in our state, and as a result, they built in a provision allowing these schools to purchase public school buildings paid for by taxpayer dollars," the spokesperson said in a statement. "The Office of the Attorney General has fought and will continue to fight to uphold the law, as it is our statutorily authorized duty."

The Indiana Charter School Network, a group that believes IPS is not exempt from the provision, said it anticipates an appeal to the Marion Superior Court ruling. 

"We believe the statute is clear and that IPS is in violation of both the word and spirit of Indiana’s $1 Law," the group said in a statement. "Unused district school buildings should be used first as public charter schools when there is a clear interest in using those buildings to educate public school students. We’d much prefer to see more kids in classrooms vs. adults in courtrooms."

In August, IPS sued the state in an attempt to legally establish whether the district is exempt from a 2011 law that allows charters to buy shuttered school buildings for a dollar. The original aim of the law was to give charter schools, which do not receive property taxes for facilities, access to vacant buildings. It remains controversial because traditional public school districts do not want to give facilities to charter schools that will compete for students.

This year, lawmakers added an exemption to the law for school districts in Marion and three other counties that share funds from a property tax ballot referendum with a charter school.

IPS argued that the updated law exempted the district from the $1 provision. In 2021, the IPS School Board voted to approve sharing funds from a 2018 property tax referendum with charter schools the district partners with.

But an attorney for Rokita’s office argued that IPS was not exempt because the new exemption was only for districts who won a ballot referendum after May 2023 and followed numerous other requirements, such as working with the county auditor to distribute levy funds to the charter schools.

The key question in the lawsuit was whether the exemption in the law is linked to the new referendum sharing rules, Judge Heather A. Welch wrote in the decision. 

Welch ruled that IPS was exempt because the district shared referendum funds in 2021 with district-linked charter schools and will remain exempt if it continues property tax distributions to those schools. Welch also wrote that exemption from the $1 law is not tied to new requirements for some districts to share with charter schools after May. 

“... meaning the proposed sales of the two buildings at issue can proceed as planned,” Welch said.

In July, the IPS Board started a process to sell two closed school buildings — Raymond Brandes School 65 and Francis Bellamy School 102 — as part of a major overhaul to address facilities and academic concerns. VOICES, a nonprofit offering youth programs, is interested in purchasing School 102 to expand.

Since then, charter schools Andrew J. Brown Academy and Adelante Schools said they were interested in buying School 102 and School 65, respectively, for $1 as allowed by the law. 

But Monday following the court ruling, the IPS school board posted an agenda for this week's school board meetings with a contract to sell School 102 to VOICES for $550,000. A vote on the sale is set for Thursday.

“We’re proud that we have already worked with organizations and community members so that, along with a number of possible options, some of these buildings will serve students with mental health needs, deaf students, and adult learners,” the IPS board said in a statement. “We continue to strive to not only be a good partner but also be fiscally responsible with the resources that have been entrusted to us by our community."

Contact WFYI education editor Eric Weddle at eweddle@wfyi.org.