The Indianapolis Education Association, which represents teachers in Indianapolis Public Schools, announced it will not support a proposed citywide operating referendum that would raise property taxes to help schools — a move that underscores unresolved questions about how much of the revenue would actually flow back to IPS.
Union cites split with charter schools, district stability
The referendum, proposed by the Indianapolis Public Education Corporation — the new board created to oversee school finances — would ask voters to approve a 37-cent tax increase per $100 of assessed home value. Proponents say the four-year measure would generate roughly $95 million annually. Under the plan, funds from the referendum would be split between Indianapolis Public Schools and charter schools operating inside district boundaries; previously, independent charter schools did not receive operating referendum money.
Monica Shellhamer, co-vice president of elementary for the IEA, said the union's opposition is not about the tax rate itself but about the share of dollars that would return to IPS and the consequences for the district's budget going forward.
"It's how much of the referendum would be coming back into IPS, and what that means for our budget as IPS moving forward,"
Even if the referendum passes, the union and district officials acknowledge it would not eliminate the shortfall IPS faces. The district must still make about $20 million in cuts by next school year. IPS previously announced $24 million in reductions this spring, including workforce and program changes.
Cuts already made and services affected
District leaders said much of the spring reductions were concentrated in central office and at the school budget level: $17 million in central office cuts and $7 million through reductions at individual schools. Other steps taken amid declining enrollment and a state law change that reduced property tax revenue include a 2% reduction in IPS staff, limiting extracurricular transportation on Friday afternoons and shifting some sports offerings to clinics run in partnership with community organizations.
- Referendum rate proposed: 37 cents per $100 assessed value
- Estimated annual revenue: $95 million
- Length of referendum: four years
- Additional cuts required even if passed: $20 million
- Recent reductions already announced: $24 million
| Item | Amount |
|---|---|
| Proposed tax rate | 37¢ per $100 |
| Estimated annual revenue | $95 million |
| Existing spring cuts | $24 million ($17M central office, $7M school budgets) |
| Additional cuts required | $20 million |
Advocates for the referendum have argued the measure would provide crucial operating funds for schools. But the IEA and some educators say the distribution formula — which would allow charter schools within IPS boundaries to receive a portion of operating referendum money — undermines the district's financial stability and leaves classroom staffing and programming vulnerable.
Local impact and what's next
The referendum would last four years. The proposal estimates an average homeowner would see about $221 added to their property tax bill annually under the 37-cent rate. That figure is being used in public outreach by supporters and opponents alike as the city prepares for a fall vote.
Union leaders say the concern stems from promises made during earlier legislative changes that they say were not fully fulfilled, contributing to IPS' fiscal strain. The IEA's decision not to endorse the measure does not prevent individual members from supporting it, but it signals a rift between educators and the new finance board at a critical moment for district budgeting.
With the vote approaching this fall, IPS officials and the Indianapolis Public Education Corporation will need to make the case to voters that the plan balances support for schools while addressing concerns about equitable distribution. For parents and school employees, the central question remains whether passage would meaningfully stabilize classroom staffing and programming or simply redistribute limited operating funds across more schools.
Voters will decide the referendum this fall. If approved, the tax increase would take effect and the new distribution model would be implemented under the oversight of the Indianapolis Public Education Corporation.
