The Journal Gazette
Friday, November 26, 2021 1:00 am

'May' day for charters

Law robs public schools of referendum proceeds

Michael Shaffer

The headline was pretty clear – “(Indianapolis Public Schools) may share $5 million of referendum money with Innovation Schools.”

However, the root of this headline goes back to the last full legislative session and one little word the GOP supermajority made certain got inserted into our state education budget.

It really is a little word: “may.” It appeared in a sentence about the proceeds of referendums conducted by Indiana school districts:

“A school corporation may (emphasis mine) distribute proceeds of a tax levy collected under IC 20-46-1 that is transferred to the school corporation's education fund to a charter school, excluding a virtual charter school, that is located within the attendance area of the school corporation.”

For this to make sense, I should probably tell you about a referendum.

Because of the way our property taxes are set up, there is a limit to what can be charged in tax, depending on the kind of property you own. Homeowners cannot be charged more than 1%, farmers cannot be charged more than 2%, and business owners cannot be charged more than 3%.

We call those property tax caps.

If a school district needs more money to pay its bills than the percentage it receives in revenue from those taxes, it may hold a referendum and ask taxpayers to give them the right to collect more tax money than provided for under that previously mentioned tax amount.

The new revenue must be for a specific purpose. Referendum proceeds can basically go for three things: operating expenses (increasing teacher pay or new curriculum), capital outlay (new buildings or needed renovations) or safety needs (additional school resource officers, district safety directors, enhanced emergency communications, etc.). 

If taxpayers approve the referendum, the school district has the revenue coming in for a specified period of time and must keep diligent records on how that money is spent.

They are public schools so every penny must be accounted for to the public, and it is all a matter of public record. 

Over the protests of those representing traditional public schools, the word “may” was inserted regarding the money generated by referendums. Remember, public school districts must tell taxpayers how this money will be spent, when it will be spent and exactly on what it will be spent. I like to think of this as financial transparency. 

The law says public school districts “may” give some of the proceeds to charter schools. The wording does not yet say “shall.” 

What does this mean? Taxpayers who approved additional taxes to pay for specific things (building projects or safety or operational funds) may now see those funds given away to charter schools, which – well, let's put it this way – don't fill out the same financial reports as traditional public schools and don't follow the same regulations.

Who gets the worse end of the deal? Two groups do: The taxpayers who agreed to fund the referendum for a specific school district; and the school district itself, which thanks to its willingness to share, now has less money to spend.

What about the charter school(s) that did nothing throughout the referendum? They are laughing all the way to the bank. 

Do you want to know the dark little questions that nag at the minds of school financial officers throughout the state? There are a few:

• Who decided to give away $5 million of referendum money that Indianapolis Public Schools worked so hard to get from voters?

• If it was not the administration, was it IPS board members (who accepted large campaign contributions from charter-supporting foundations)?

• How long before “may” becomes “shall”?

• How long before voucher schools are added as potential recipients of your referendum dollars?

Curious minds really do want to know.

Fort Wayne resident Michael Shaffer is an assistant clinical professor of educational leadership at Ball State University.

Share this article

Email story

Subscribe to our newsletters

* indicates required