Indianapolis Schools at a Crossroads: A Path to Sustainability

Indianapolis Public Schools (IPS) is facing a critical financial moment, presenting a unique opportunity to redefine its future. Despite recent successes in literacy and graduation rates, the district confronts an impending operating deficit and diminishing cash reserves, demanding bold action from civic leaders and the community.

The Urgent Need for Education Reform in Indianapolis

While IPS has shown positive trends, including improvements in student outcomes and the growth of its innovation network to 41% of total enrollment, its financial health is at a breaking point. The district anticipates a significant operating deficit of $44 million this year, with cash reserves projected to be exhausted within the next 12 to 18 months. This challenge will intensify when the current operating referendum expires in 2026 and revenue sharing with public charter schools begins in 2028.

Unpacking IPS’s Financial Efficiency Challenges

The issue isn’t simply a lack of revenue. Since 2018, IPS’s property tax revenue has increased by a substantial 125%, even with referendums. However, over the same period, enrollment in IPS-operated schools has decreased by over 5,000 students, while innovation schools saw a similar increase. This disparity has led to a dramatic rise in spending per pupil at district-operated schools, significantly exceeding state and neighboring district averages.

A Unified Vision: Shared Services and Governance

To navigate this crisis, the Indianapolis Local Education Alliance, led by Mayor Joe Hogsett, is developing recommendations. The Indy Chamber advocates for a “win-win” solution: a unified and collaborative system encompassing all public schools – district-run, innovation, and independent charter schools – under a shared identity, common student success standards, and unified governance. This approach aims to deliver for both students and taxpayers.

Reimagining IPS for Financial Sustainability

This reimagined structure would empower IPS to focus on efficiently providing essential services such as transportation, facilities management, information technology, and food service to all schools within its geographical footprint. This strategic shift would not only improve financial sustainability by compensating IPS for these critical services but also significantly reduce the overall taxpayer burden for educational overhead.

Under this model, individual schools would gain the autonomy to concentrate on delivering high-quality education tailored to student needs, building on the proven effectiveness of IPS’s innovation schools and independent charters. A comprehensive, district-wide governance structure would then ensure consistent accountability across all institutions, enabling collective and informed decision-making on critical matters like school closures and future referendum requests.

Implications for Indianapolis’s Future

Without meaningful reform, Indianapolis faces severe consequences: potential insolvency for IPS or a colossal $1 billion operating referendum in 2026. Either of these unacceptable outcomes risks driving families and businesses out of the city’s core, undermining economic growth and the vital tax base that supports our community.

Indianapolis is truly at an inflection point. The courageous decisions made by civic leaders and the community in the coming months will be instrumental in shaping the city’s ability to attract talent, retain investment, and ensure continued prosperity for all its residents. It’s a collective call for courage, collaboration, and an unwavering focus on student success.

Frequently Asked Questions About IPS Reform

• What is the primary challenge facing Indianapolis Public Schools?
  IPS is facing a significant financial crisis, with an projected $44 million operating deficit this year and rapidly depleting cash reserves, compounded by declining enrollment in district-operated schools despite increased property tax revenue.
• What progress has IPS made recently?
  IPS has seen improvements in literacy scores and graduation rates. Its innovation network, which utilizes shared resources, has also grown to serve 41% of the total IPS enrollment.
• What is the proposed solution for IPS’s financial issues?
  The Indy Chamber proposes a unified system where all public schools (district, innovation, and independent charter) operate under shared identity, standards, and governance. IPS would focus on providing essential services efficiently, while individual schools maintain autonomy for education.
• How would this solution benefit taxpayers?
  By centralizing essential services and improving overall efficiency, the model aims to enhance financial sustainability for IPS and reduce the need for large tax burdens, such as the potentially massive operating referendum in 2026.
• What is the Indianapolis Local Education Alliance?
  It’s a panel of civic leaders, led by Mayor Joe Hogsett, in partnership with IPS and Superintendent Aleesia Johnson, tasked with offering recommendations on the future of the district and public charter schools.

The time for bold, collaborative action on Indianapolis’s public education system is now, ensuring a vibrant future for our students and our city.

IPS Faces Urgent Financial Crisis