Indiana superintendents cite property tax reforms as schools reduce staffing

Senate Enrolled Act 1 explained

Imagine your neighborhood school suddenly having fewer dollars for everyday needs. Indiana superintendents say Senate Enrolled Act 1, a major property tax reform law, is creating difficult budget choices for districts across the state today.

An August survey by the Indiana Coalition for Public Education contacted 290 superintendents and received 144 responses. Nearly all respondents expected negative financial effects, including pressure on staffing, programs, services and future school budgets.

Senate Enrolled Act 1 changes

Senate Enrolled Act 1 changed Indiana property tax rules affecting local governments, including public schools. The Indiana Coalition for Public Education says the changes will reduce school revenue over several years, adding pressure to budgets.

The group estimates public schools could lose $744.4 million over three years beginning in 2026. The largest loss is expected in 2028, according to estimates cited by the coalition from Indiana’s Legislative Services Agency.

Senate Enrolled Act 1 pressures

Superintendents and other school officials responding to the Indiana Coalition for Public Education survey said maintaining expected services may require additional funding. The survey found one-time funding increases ranging from 1% to 25%.

Respondents who provided percentages reported an average 5.6% ongoing annual increase to maintain expected service levels. These figures are survey responses, not a statewide estimate produced by Indiana officials.

Staff cuts move into focus

Staffing is already one of the clearest areas where districts report changes. Half of survey respondents said they already cut support staff, while another 16% said reductions were coming soon, and 30% were considering cuts.

Teaching positions are also affected. Forty-six percent of respondents said they were eliminating some teaching roles, while 93% reported eliminating, considering, or planning similar actions, according to the Indiana Coalition for Public Education survey.

Little-known fact: Indiana’s average public-school teacher salary reached $60,557 during the 2023–24 school year, according to the state’s teacher compensation report.

Rural districts feel added pressure

Rural schools can face different financial challenges, including differences in local tax bases and available revenue options. Survey responses showed rural districts were less likely to pursue or consider referendums and more likely to report teaching-staff reductions than their urban and suburban counterparts.

Some rural respondents also raised concerns about consolidation or school closures. These comments reflect individual administrators’ views, not a statewide decision, but they illustrate concerns about the future of some small schools.

Budgets affect everyday school life

Budget reductions can reach far beyond employee counts. Superintendents reported considering delayed maintenance, smaller staff raises, transportation cuts, fewer electives and field trips, along with other changes that could directly alter services students use daily.

One district questioned its ability to sustain internships, career pathways and dual credit offerings. Those programs connect students with work experiences, college courses and career preparation, making budget decisions relevant beyond the classroom for students.

Some districts find unusual savings

Indiana districts are also looking for smaller ways to lower expenses. One superintendent reported planting prairie grass instead of mowing to save fuel, while another removed televisions to reduce electricity use, according to survey responses.

Another district launched a student-run business to generate income. These examples came from participating superintendents and show the range of ideas being considered when districts search for savings without immediately cutting programs or positions.

Little-known fact: Indiana’s November 2026 ballot includes 38 school districts seeking property tax referendums, with the proposed operating levies collectively expected to generate about $500 million annually.

Why are districts avoiding referendums?

Indiana has a number of school referendum questions on the November 2026 ballot, but many districts are not asking voters for additional property tax revenue. The superintendent survey offers one possible explanation for that gap.

Thirty-nine percent of respondents cited a lack of community support for a referendum. The survey found districts were more likely to report staff cuts than pursue referendums, according to the Indiana Coalition for Public Education.

Referendum rules shape district planning

Senate Enrolled Act 1 changed rules surrounding property tax referendums. Indiana’s Department of Local Government Finance explains that the law changed referendum procedures and ballot requirements, affecting how districts plan for future local funding decisions.

For districts that do not pursue a 2026 referendum, the next general election opportunity is expected in 2028. That timing can matter when leaders balance budget needs against longer-term financial planning and community support.

Property taxes shape school operations

Local property-tax revenue supports school operations and certain other local school expenses. The Indiana Coalition for Public Education identifies transportation, building maintenance, utilities, technology infrastructure, custodial work and other expenses as areas affected by property-tax changes.

When revenue is tighter, districts may delay, reduce or fund expenses through other sources. The specific choices vary by district, so a change reported in one community does not mean every Indiana school will make the same decision.

School choice enters budget debate

The superintendent survey also asked about universal school choice and state funding. Many respondents expressed concerns about Indiana’s expanded private school voucher program and how education dollars are distributed among different types of schools statewide.

Those statements represent opinions from participating superintendents, not a finding that every school leader agrees. Indiana’s education system includes traditional public schools, charter schools, and private schools receiving state-supported aid, creating a funding discussion.

Bonds offer another funding option

Nearly 40% of survey respondents said their school corporations had issued or would issue a new general obligation bond, while others were considering that approach. The ICPE survey found that 37.7% had issued or would issue new GO bonds.

The survey did not say every district would use bonds for the same purpose. Bond decisions depend on local circumstances and applicable legal requirements, so a bond is one financing tool rather than a universal solution.

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Indiana families may notice changes

Indiana districts are adjusting budgets as property-tax changes take effect and state funding decisions develop. The 2026 survey is a snapshot of participating school corporations and respondents, not a guarantee that every reported or planned reduction will occur.

For families, possible effects may include staffing changes, transportation adjustments, fewer activities or delayed improvements. Local decisions will vary, and school corporations that do not pursue a 2026 referendum generally will next have the opportunity under the new schedule in 2028.

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How do you think Indiana communities should balance school funding with property tax costs? Share your thoughts in the comments.

This slideshow was made with AI assistance and human editing.

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