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Indiana school districts may be required to share referendum proceeds with charter schools

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Indiana school districts may be required to share referendum proceeds with charter schools

State Rep. Robert Behning, R-Indianapolis, left, and state Rep. Vernon Smith, D-Gary, debate House Bill 1072 in the Indiana House chamber on Jan. 27. The legislation, which passed 52-39 and is awaiting action by the Senate, would require a portion of the money raised through a public school referendum be shared with area charter schools.

Indiana school districts that successfully persuade voters to pay higher property taxes to support their local schools soon may be required to share referendum revenue with nearby charter schools.

House Bill 1072 would mandate a portion of the money generated through every school district referendum adopted after July 1 be provided to area charter schools in proportion to the number of students living in the school district who attend each charter school.

Under the plan, the total amount of money to be raised by the referendum through higher property taxes would be increased above what's being sought by the school district to provide the extra money to charter schools.

Charter schools receiving referendum funds would be under no obligation to spend the money in the same manner as the local school district, such as for teacher pay raises or school safety improvements, and only would have to disclose afterward on their websites how the money was spent, according to the legislation.

State Rep. Robert Behning, R-Indianapolis, the sponsor, said the measure is about "fairness and parity" between public school districts and charter schools, which he said in his area are struggling to keep up with the referendum-funded teacher pay rates offered by Indianapolis Public Schools (IPS).

"The charter schools feel as if they have been left in a situation where they do not have the opportunity to pay the same salaries that IPS is going to have, as an example, because they don't have the additional resources that IPS has been able to garner with the referendum," Behning said. "Yet, the parents of the (charter) students are paying those property taxes."

Behning suggested mandatory sharing of school referendum proceeds, instead of just the optional sharing available under current state law, could result in more successful referendums because parents of charter school students would be more likely to support a referendum ballot question if they know a portion of the temporary property tax increase is directly funding their children's education.

"It has no negative impact to the traditional public school. It only creates fairness to those kids in the charter school," Behning said.

The nonpartisan Legislative Services Agency estimates that if the proposal were in effect in 2021 it would have diverted to charter schools $26.6 million of the $402.8 million generated by 67 school referendum levies in effect across the state.

The bulk of that money would go to charter schools in Indianapolis and Gary, where approximately half the students living in each school district attend charter schools instead of their local public schools.

State Rep. Vernon Smith, D-Gary, said he worries if this plan becomes law charter schools will be under no obligation to support a referendum effort, but will be able to cash in on the work of public school parents, employees, and supporters simply seeking to maintain school district operations — a struggle often caused by charter schools draining away students and state funding.

"Our school corporation went through three efforts to get a referendum passed and our last one was successful because we generated a whole lot of community support," Smith said. "The charter school can just sit back and be the recipient."

State Rep. Ed Delaney, D-Indianapolis, labeled the plan "revenue sharing of the worst sort" because charter schools are not accountable to property taxpayers for the money they spend in the same way as traditional school corporations.

"The property taxpayer will be compelled, if they want to help the traditional public schools, to give part of their property tax money to a school they do not control, that they cannot vote for, that they have no role with. It is, as to them, a stranger. I don't think forcing schools to give money to strangers is 'fair.'

"We don't control their salaries. Nor do our voters. Nor do our property taxpayers. They could give all their money to their administrators. They could pay high rent to related parties. ... They make those decisions without our help. Now they want to make those decisions without our help — but with our money."

If the proposal becomes law it would not immediately apply to the Valparaiso Community Schools referendum on the May 3 election ballot.

However, any new school referendums approved at future elections, and any renewals of expiring referendum levies, would be subject to revenue sharing with charter schools.

The plan was approved 52-39 by the Republican-controlled House, with House Speaker Todd Huston, R-Fishers, exercising his rarely used right to vote to ensure the measure received the minimum 51 votes needed to advance it to the Republican-controlled Senate, where it's awaiting action by the Appropriations Committee.

Northwest Indiana lawmakers voting yes were state Reps. Mike Aylesworth, R-Hebron; Julie Olthoff, R-Crown Point; Hal Slager, R-Schererville; and Ed Soliday, R-Valparaiso.

It was opposed by state Reps. Mike Andrade, D-Munster; Pat Boy, D-Michigan City; Earl Harris Jr., D-East Chicago; Ragen Hatcher, D-Gary; Carolyn Jackson, D-Hammond; Jim Pressel, R-Rolling Prairie; and Vernon Smith, D-Gary.

State Rep. Chuck Moseley, D-Portage, was absent Jan. 27 and excused from voting.

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