Senate Bill 518 says charter schools that are located within the attendance area of a traditional school district and enroll at least 100 students who live within the district would be entitled to a percentage of that district’s referendum money.
Sen. Linda Rogers (R-Granger), the bill’s author, said charter schools are public schools, but they don’t get the same level of funding as traditional public schools. She said charter students should also benefit from local property taxes.
"We talk about school choice, and we talk about kids, but we need to also think about the parents that are choosing to send their child to a different school — to a charter school," Rogers said. "Those tax dollars for years have not followed their children. Today, we need to make that change."
The bill applies to controlled project referendums, school safety referendums, debt service levies and operating referendums approved after May 10, 2025. The total amount that would be shared depends on both the number of students enrolled in the charter school and the number of students enrolled in the traditional public school. The bill includes a formula to determine the specific amount.
School districts in Lake, Marion, Vanderburgh and St. Joseph counties are already required to share some referendum funds with local charter schools by a law passed in 2023. However, schools that are not currently required to share operating referendums with charters will phase into sharing those funds by 2028. Rogers said the transition period will give schools time to budget and prepare.
Multiple Republicans urged the Senate to pass the measure. Sen. Chris Garten (R- Charlestown) said the bill rights an inequity against charter school students.
“Why do those kids matter less in the education system? Why should we fund those kids less? Because that’s the system currently,” he said.
Numerous lawmakers also spoke against the bill. Those opposed to the measure said it will increase the burden on school districts that are already struggling. They also said it will siphon money away from traditional public schools to schools that lack the same types of regulations, oversight and elected school boards.
Democrats proposed a slew of amendments to the bill Wednesday that would have taken steps such as creating a temporary moratorium on opening new charter schools to evaluate the impact of the bill, requiring charter school authorizers to be located in the same county as their charter school, mandating charter school board members to be elected or giving traditional public school districts any savings the generated by the bill.
The bill could save the state money because any referendum funding shared with a charter school would be deducted from that school’s Charter and Innovation Network School Grant Program award, if it is eligible for the grant.
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Sen. Greg Taylor (D-Indianapolis) said he served on the board of a charter school for four years before he was elected as a state lawmaker. He said one of the initial appeals of charter schools was that they claimed they could “do more with less” and did not need as much funding as traditional public schools.
However, Taylor said SB 518 creates a scenario where the two different school types must compete for local funding.
“What is enough? Do we stop when we run out of money? Or do we keep taking away from those traditional public schools that need those resources, that need to recruit some of the best students, that still educate over 90 percent of our kids in this state?” he asked.
Sen. Shelli Yoder (D-Bloomington) said two traditional public school districts in her area would be impacted by the bill.
“Senate Bill 518 is not about choice. It is about redistributing public tax dollars away from traditional public schools …and handing those dollars over to charter operators with limited oversight,” she said. “We hear people talk about school choice, but it robs tax dollars from the parents of 90 percent of our Hoosier students who choose public schools. Where is the respect for their choice? This bill takes away that local choice.”
Yoder and other Democrats said if lawmakers want to fund charter schools equally, they should appropriate additional funding without taking any money away from traditional public schools.
Sen. Fady Qaddoura (D-Indianapolis) said lawmakers have a legal responsibility to fund traditional public schools. He added that charter schools are different, and he said he rejects the idea that the two types of schools must receive equal funding.
“It is sending a dangerous message to the state of Indiana that our traditional public schools for decades have been taking money from our families and neglecting other students. That’s dangerous,” he said.
Qaddoura also said he is baffled lawmakers would pass this bill during a tight budget year when there are many uncertainties about how it will financially impact school districts.
“In the last two months, my Republican colleagues on different committees drilled in our minds a thousand times how difficult this budget session is going to be, how much revenues are declining, and we have to be fiscally responsible,” he said. “Question after question after question when we asked what is the fiscal impact of this bill, the answer is we don’t know.”
A mix of Republicans and Democrats voted against the bill, but it ultimately passed by three votes. It now advances to the House.
Kirsten is our education reporter. Contact her at kadair@wfyi.org or follow her on Twitter at @kirsten_adair.
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