Indiana public schools prepare to lose hundreds of millions due to state/federal constraints

INDIANAPOLIS — With back-to-school season underway, Indiana public schools are preparing to lose hundreds of millions of dollars over the next several years thanks to state and federal changes.

“It’s changed things quite a bit for Indiana schools,” Scott Bowling with the Indiana Association of School Business Officials said.

According to Bowling, public schools could lose an estimated $750 million through 2028 thanks to SEA 1 (the formal name for the state’s new property tax law).

“That’s going to be a challenge as we come into the new school season to make sure that we have adequate facilities,” Bowling said. “You will see schools that don’t repair things as quickly as they have in the past; we think it will have an impact on technology as well.”

ISTA President Jennifer Smith-Margraf echoes that sentiment—adding that the state’s latest budget is also affecting how schools are preparing for this school year.  

“We have the budget where we did get a two percent increase in public schools, which we appreciate very much, but it’s not keeping up with the inflation,” Smith-Margraf said.

According to Smith-Margraf, ISTA is seeing more schools statewide choosing to leave open positions unfilled due to state and federal budget constraints.  

“If people retire or resign, they are looking at positions and not replacing them, which has educators and parents pretty concerned about what class sizes are going to look like coming into this fall,” Smith-Margraf said.

This comes as the federal government announced it would release more than $6 billion in previously withheld funding approved by Congress meant for educational programs nationwide (Indiana had been waiting on a total of roughly $100 million). Despite this, Bowling said the damage has already been done for several Indiana schools.

“They were expecting that money to run the programs that they needed for the start of the school year, that’s coming up very quickly, and a lot of schools have had to put that on hold— they’ve had to look at staff; they’ve had to lay off staff,” Bowling said.

The property tax law will also require public schools to share property tax revenue with charter schools that enroll at least 100 students. That provision doesn’t go into effect until 2028.