With a financial shortfall looming, the Indianapolis Public Schools board approved a roughly $490 million operating budget for the 2026-27 school year on Thursday that includes $7 million in cuts to schools.
The vote came after criticism from parents and teachers over what they called a lack of transparency from the district, which communicated budget cuts in a video earlier this month after weeks of rumors.
Next year’s budget is a turning point for IPS as it confronts declining enrollment, recent property tax reforms, and a requirement to share property taxes with charter schools. Lawmakers recently created the Indianapolis Public Education Corporation, which will assume the power to levy taxes and request referendums instead of IPS.
To cut costs, some schools will share “specials” teachers — those teaching art or P.E., for example. The district already implemented that strategy at some schools for this year, and which parents opposed.
IPS is also listing fewer prekindergarten sites for next school year. At least five schools that offer preK this year aren’t on the list for 2026-27.
In public comment on Tuesday, teachers affected by the cuts expressed frustration with the district’s communication and its decision to remove them from their schools and students.
Emily Schunke, who said she was displaced from her school as a specials teacher last year and will be left without a job at her current school next year, said that she felt reduced to a number after 15 years of service.
“My parents taught me if I was professional, had integrity, and was loyal to my employer they would take care of me,” she said. “IPS has proven my parents wrong.”
Jamie Thompson, a prekindergarten teacher at Clarence Farrington School 61 — one of the sites that have dropped prekindergarten for next year — said that she’s received no guidance from her principal or the district since being told in late February that she won’t have a job at her school next year.
“Having neared 40 years of experience and dedication to this district, I still find it hard to believe that my time and commitment can be ended with, ‘We don’t need you next year,’ claiming it’s in the students’ best interest,” she said.
The 2026-27 budget includes the last portion of the voter-approved tax increase passed in 2018, estimated at $24 million, according to district financial documents. If voters don’t approve another such referendum this November, the financial situation will worsen. IPS said it hasn’t modeled financial plans to consider if a November referendum doesn’t pass.
Even with the $7 million in cuts, IPS still anticipates ending the 2026-27 school year with a $5 million dollar deficit. If voters approve the referendum, it could be used to fill the projected hole, according to the district.
In a mid-March video announcing plans for those cuts, Superintendent Aleesia Johnson alluded to additional future reductions.
“As for district-level budget reductions, you can expect to hear more from me and my team about tradeoff conversations and the strategies we will deploy as we move through the next couple of months of this school year and beyond,” she said.
The district hasn’t announced any additional cuts.
Charter schools receive property tax, referendum dollars
Charter schools, which enroll about 40% of students living in IPS borders, will receive roughly $13 million in local property taxes in 2026-27, according to district estimates.
Charter schools that are part of the district’s Innovation Network are projected to receive $2 million for next school year from the 2018 operating referendum — part of an agreement the district approved in 2021 to give these schools $500 per pupil from that funding source.
Marion County charters enrolling students who live in IPS boundaries will receive a collective $11 million next school year through a state law passed in 2021.
Budget anticipates decrease in tax base
The budget assumes minimal growth in state funding while both enrollment and year-over-year property values decline.
Property tax reforms that lawmakers approved last year curb the growth in property values to bring relief to homeowners. But that change will also affect government revenue.
The budget accounts for state funding at $8,370 per pupil including the base amount given to every student and the Complexity Grant for students from low-income households or in foster care — a 1.3% increase over last year.
CFO Weston Young has said that state per-pupil funding hasn’t kept pace with inflation. Adjusting that funding for inflation would put the amount at about $10,000 per pupil, according to the district.
Transportation, other costs increase
Next year’s budget projects $42 million in transportation costs, up from the $41 million the district projected spending for this school year as of February. Administrative support costs will increase from the $30 million the district anticipated spending this year to $31 million for next year.
But the district said in a statement that the budget appropriation for administrative support doesn’t take into account future budget reductions.
The district estimates spending $112 million on general education costs that include the recently approved teacher and support staff raises, compared with the $110 million projected for this year, and $48 million on special education compared with $47 million projected this year.
The new Indianapolis Public Education Corporation must certify a referendum for the November ballot by August.
This article was written by Chalkbeat Indiana reporter Amelia Pak-Harvey.