Indiana Senate approves SB 518 to share school property tax revenue with charter schools

Senate Bill 518, introduced in Indiana on February 11, 2025, aims to reform the distribution of property tax revenues among school corporations and charter schools. The bill mandates that any school corporation adopting a property tax levy for controlled projects or school safety referendums after May 10, 2025, must share the revenue with certain charter schools located within their attendance areas. Additionally, it requires the sharing of revenue from debt service levies and operating referendum tax levies with these charter schools.

Key provisions of the bill include specific criteria for which charter schools are eligible to receive shared revenue and a formula for calculating annual grants from the charter and innovation network school grant program based on the property tax revenue received by charter schools. Notably, some school corporations that meet certain criteria are excluded from these revenue-sharing requirements.

The bill has sparked debates among lawmakers, particularly regarding the implications for funding equity between traditional public schools and charter schools. Proponents argue that the measure promotes fairness in funding, ensuring that charter schools, which often serve similar student populations, receive their fair share of tax revenues. Critics, however, express concerns that this could divert essential funds from traditional public schools, potentially impacting their financial stability and ability to provide quality education.

The economic implications of SB 518 could be significant, as it alters the financial landscape for both public and charter schools in Indiana. By mandating revenue sharing, the bill may lead to increased funding for charter schools, which could enhance educational options for families. However, it also raises questions about the long-term sustainability of funding for traditional public schools, which may face budget constraints as a result.

As the bill moves forward, its potential impact on the state's education system will be closely monitored. If enacted, SB 518 could reshape the funding dynamics between traditional public schools and charter schools, setting a precedent for similar legislative efforts in other states. The bill is set to take effect retroactively on May 10, 2025, with additional provisions coming into force on July 1, 2025.