Indianapolis Public Schools may be able to move forward with the sale of Raymond Brandes School 65 (above) and Francis Bellamy School 102 after the Marion County Superior Court ruled this week the school district is exempt from the state’s “dollar law.” (Photo/Marilyn Odendahl)
The following report was written by Indiana journalist Steve Hinnefeld for The Indiana Citizen
November 15, 2023
An Indiana state law, which turns unused or underutilized public school buildings over to charter school organizers for a pittance, may have been given a second life, despite opposition from critics and a lack of clear evidence that it’s succeeding.
Even one of its strongest proponents has been having doubts. Twelve years into promoting Indiana’s controversial “dollar law,” which aimed to get buildings cheaply for use by charter schools, Rep. Bob Behning, R-Indianapolis, was ready to throw in the towel.
“I don’t think it has worked the way it was intended,” Behning said. “I’m saying, I give up.”
The date was March 29, 2023, the setting was a meeting of the House Education Committee at the Indiana Statehouse, and Behning was verbally jousting, as he often does, with Rep. Ed DeLaney, D-Indianapolis.
“I’m seeing a white flag, is that right?” DeLaney said.
It looked that way at the time; but the Republican supermajority in the Indiana General Assembly didn’t give up on the law, which was adopted in 2011 to let charter schools buy vacant or closed public school buildings for $1 or lease them for $1 a year. Instead, it doubled down.
Under provisions adopted this year, public school districts will have to track and report to the state if their buildings are “underutilized.” In some districts, charter schools and their backers will be able to petition the state to close those schools and let charter schools acquire them for $1, even if the buildings are still being used by the public school district.
DeLaney said in a recent interview that the changes take a bad law and make it worse.
“It is literally a taking of an asset,” he said. “It’s a form of eminent domain directed against school districts. But, under eminent domain, you get paid for your asset. Here, you don’t.”
But charter school supporters say the law is a taxpayer-friendly way to help charter schools get access to essential facilities and reduce duplication in education funding. They say that, since charter schools, unlike public school districts, can’t levy local property taxes to pay for buildings, they need tools like the dollar law. They hope the changes make the law more effective.
“I can tell you that facility availability, financing availability, is the biggest impediment to having high-quality charter schools open. It’s really hard,” said Scott Bess, founder and special projects director with Purdue Polytechnic High School, which operates four charter school campuses.
Who speaks for taxpayers?
The dollar law seems to be unique to Indiana, according to data from the Education Commission of the States, although other states have laws aimed at making spare buildings available to charter schools. Georgia requires districts to make surplus buildings available to charter schools at no cost, and Florida says districts must provide surplus buildings to charter schools on the same basis as to other public schools. Most states require charter schools to pay market value, however.
The Indiana law has been tweaked off and on, including in 2021, when it was expanded to allow state colleges and universities to buy or lease unused public school buildings for $1.
And the law has been controversial from the start. Advocates for school districts say it takes public facilities and turns them over to privately run schools that aren’t accountable to local taxpayers. Charter school supporters say it helps level the playing field for funding different types of public schools.
Under Indiana law, charter schools receive state funding for teacher and staff salaries and most operating expenses on the same basis as public school districts. But without the authority to levy property taxes, they must turn to other sources to pay for buildings. Charter schools do get extra state funds, currently $1,400 per pupil, to help make up for not getting property taxes.
There are about 100 charter schools in Indiana, not including “adult high schools” designed to help dropouts finish school. Approximately half of charter schools are in Indianapolis. Most are authorized by the Indiana Charter School Board, the Indianapolis mayor’s office, Ball State University, the University of Southern Indiana or one of three private institutions, Trine University, Grace College and Calumet College. Statewide, just under 5% of students attend charter schools, but the percentage is much higher in some districts, especially Indianapolis Public Schools and Gary Community Schools.
Supporters say charter schools are public schools – they are defined as such in state law — and the public should pay for their facilities. And, since the public had already paid for unused district buildings, it shouldn’t have to pay again for charter schools to buy or lease them, they say.
“The buildings belong to the taxpayers/public who paid for them, not the district,” Marcie Brown-Carter, executive director of the Indiana Charter Schools Network, said by email. She said unused school buildings “should be used for continued public good in the form of public schools if possible.”
But who speaks for the taxpayers? School district advocates say local school boards, which are typically elected, should decide how the buildings will be used or if they should be sold to offset expenses.
“Our belief is the local school board is in the best position to determine appropriate uses of its buildings, taking into consideration the community, of course, and also the needs of the school corporation,” said Lisa Tanselle, general counsel for the Indiana School Boards Association.
The law has rarely been used
The law requires school districts to report to the Indiana Department of Education when they decide to close a classroom building. Charter schools then typically have 90 days to offer to buy or lease the building for $1. If no charter school operator comes forward, the district can sell or lease the building.
But only 30 such buildings have been reported as closed since the law took effect 12 years ago, according to state records. Two were in Indianapolis and one was in South Bend, but most were in rural areas or small cities where there’s generally been less interest in opening charter schools.
The Education Department doesn’t keep records on how often charter schools have acquired the buildings, spokesperson Molly Williams said. Brown-Carter, with the state charter network, estimated it’s happened about five times.
Ambiguity in the law may have lessened its effectiveness.
In practice, school districts have often opted to convert classroom buildings to other uses, rather than close them outright and make them available to charter schools, their competitors. For example, they might convert the buildings for use for special programming or as office or storage space. Or they might lease them to community organizations.
“Districts have largely ignored the law by failing to report unused buildings to the IDOE as the law has required, or by reading the law carefully to find loopholes they can exploit to avoid the law’s intent,” Brown-Carter said.
Tanselle, with the school boards association, said school districts have naturally looked to alternative uses for their buildings, rather than give them up for, essentially, nothing.
“If the school corporation was afforded the opportunity to sell the building to the charter school for something more along the lines of fair market value, as opposed to $1, I don’t think there would be much resistance,” she said.
Under changes made this year by Senate Bill 391, school districts will have to report to the state if any of their classroom buildings are “underutilized,” according to a state formula: for example, if they’re operating at less than 60% of their design capacity for classroom use or less than 50% for storage.
Districts that are losing enrollment and that have more than one building serving the same grade levels could face having their underutilized buildings closed by the state and made available to charter schools. Two dozen districts meet those criteria, including urban districts like Indianapolis, Gary, Hammond and Kokomo, but also mid-sized districts such as North Lawrence, Martinsville and Spencer-Owen.
Under the law, if a building in one of those districts is listed as underutilized, a charter school could contact the district to try to arrange a deal. If there’s no agreement in 45 days, the charter school could ask the Indiana Department of Education to determine if the building should be closed. The district then would have 60 days to make its case for why it still needs the building. It’s up to the Education Department to decide, and its ruling can be appealed to the State Board of Education.
The changes could result in charter schools acquiring more buildings, but Bess, the Purdue Polytechnic founder, isn’t so sure. “Maybe it leads to one or two more,” he said.
Bess, who also serves on the State Board of Education, to which he was appointed by Gov. Eric Holcomb, said several factors make the dollar law a less-than-optimal way for charter schools to get buildings.
For one thing, if a school district is closing schools, it’s a sign that the district is losing population. With fewer students available to enroll, Bess said, the building’s location is less attractive to charter schools.
For another, school buildings that close often need expensive repairs and renovations. A charter school might get a building for a dollar, but “that would literally be the most expensive dollar we would ever spend,” Bess said.
At least 3 lawsuits have dealt with the law
Even so, the law is sure to remain controversial and subject to wrangling in the courts. DeLaney said SB 391’s complex criteria for calculating whether a school building is underutilized are sure to lead to lawsuits as districts and charter schools interpret the law differently.
“At the end of the day they (charter schools) may be able to get more school buildings,” DeLaney said. “I think they will. But in the near term, they’ll get more litigation.”
Even before the recent changes, there’s been considerable litigation over the dollar law.
West Lafayette Community School Corp. went to court in 2019, claiming the law violates the “takings clauses” of state and federal constitutions, which say the government may not take property without just compensation. The lawsuit was merged in 2020 with similar challenges by two Lake County school districts, Lake Ridge and Hammond.
“There’s no due process,” said Rocky Killion, who was West Lafayette superintendent when the suit was filed. “There’s no process for input by the local taxpayers who ponied up for those buildings.”
But a Lake County Superior Court judge rejected the lawsuit, and the Indiana Court of Appeals upheld his decision in November 2022. The appeals court concluded that the school districts are political subdivisions of the state, not “persons” that can expect to have their rights protected.
The West Lafayette, Lake Ridge and Hammond school districts apparently decided against appealing the court’s ruling. “It’s unfortunate,” said Robert Reiling, an Indianapolis attorney who represented the districts. “I thought the case merited being heard by the (Indiana) Supreme Court.”
In 2022, a charter school operator went to court to try to make use of the dollar law. Indiana Classical Schools Corp. sued Carmel Clay Community School Corp., claiming the school board decided to close its Orchard Park Elementary School but didn’t make it available for use by a charter school. Indiana Classical Schools wanted to open a charter school, called Valor Classical Academy, in the building.
But a Hamilton County judge ruled the Carmel Clay district did not violate the law when it closed the school and planned to share the facility with Carmel Clay Parks and Recreation. Indiana Classical Schools, which is affiliated with conservative Hillsdale College in Michigan, has appealed.
Finally, Indianapolis Public Schools recently went to court to argue the law doesn’t apply to IPS.
SB 391 created an exception to the dollar law for school districts that share property-tax referendum funding with charter schools. IPS has voluntarily shared some of the money from a 2018 referendum with local “innovation network schools,” charter schools that operate under agreements with the district. The district’s lawyers said that makes it exempt from the law. IPS is closing several classroom buildings as part of its Rebuilding Stronger plan and wants to be able to sell or lease them.
Indiana Attorney General Todd Rokita, named as a defendant in the IPS suit, argued the district wasn’t exempt because the dollar-law exception applies only to future referendum-sharing that SB 391 will require in four counties: Lake, Marion, St. Joseph and Vanderburgh. But a Marion County Superior Court judge sided with IPS, ruling the district is exempt from the dollar law and can dispose of buildings without offering them to charter schools.
Rokita’s office immediately asked the judge to delay implementing the decision to allow the plaintiffs a chance to appeal before IPS can sell any of its buildings.
What happened to the ‘white flag’?
Behning, the Indianapolis Republican legislator, cited the lack of use of the law when he offered an amendment to SB 391 that would have repealed the entire dollar law, effective July 2025. The House Education Committee, which Behning chairs, adopted the amendment.
“You’re seeing a white flag,” Behning told DeLaney. “You can vote for this bill and claim victory.”
But DeLaney didn’t vote for the amended bill, which also included the requirement that school districts in four counties share referendum funds with charter schools. And supporters of the dollar law didn’t surrender. Two weeks later, Behning and other Republican lawmakers had apparently changed their minds.
In an April 11 meeting of the House Ways and Means Committee, Rep. Jeff Thompson, R-Avon, the committee’s chairman, offered an amendment to SB 391 that added a facilities grant program for charter schools. Unmentioned by Thompson or anyone else, the amendment also deleted Behning’s previous language that would have repealed the dollar law.
There was no discussion of the amendment, according to a video recording of the meeting. The vote appeared to follow party lines, Republicans voting yes and Democrats no.
Julia Vaughn, executive director of Common Cause Indiana, said that was a problem. “For one committee to completely reverse a policy that another committee has taken, and, seemingly, without any public input and with little to no public discussion, is very troubling,” she said.
When the final version of SB 391 passed, two weeks later, the dollar law had been strengthened.
Lawmakers involved with the legislation — including Behning, Thompson, several authors and sponsors of the bill, House Speaker Todd Huston and Senate President Pro Tem Roderick Bray – would not discuss the law or did not respond to requests for comment. Most cited litigation, although current lawsuits touching on the law do not name the General Assembly or individual legislators as parties.
Vaughn said it seems increasingly common for lawmakers to make substantive changes in legislation with little or no public discussion. She attributes the trend to one-party control of state government and House and Senate supermajorities that can hash out controversies in closed-door caucus meetings.
“The legislature is supposed to be about people with different ideas coming together and discussing those ideas, not behind closed doors, but in public,” Vaughn said.
“We have laws on the books that say the public’s business needs to be done in public. If things go on behind closed doors, I think it erodes the public’s trust in the General Assembly as an institution.”
Steve Hinnefeld is a freelance writer based in Bloomington. He formerly was an adjunct instructor at the Media School at Indiana University, a media specialist at Indiana University and reporter for the Bloomington Herald-Times.
Dwight Adams, a freelance editor and writer based in Indianapolis, edited this article. He is a former content editor, copy editor and digital producer at The Indianapolis Star and IndyStar.com, and worked as a planner for other newspapers, including the Louisville Courier Journal.