INDIANAPOLIS — The Board of School Commissioners for the City of Indianapolis recently filed a lawsuit in Indiana Commercial Court against the Indiana Attorney General and the Indiana State Board of Education, asking a judge to rule that a portion of the Indiana Code known as the dollar law does not apply to IPS as it plans to transfer two of its buildings to a nonprofit.
According to the lawsuit, filed in Indiana Commercial Court in mid-August, IPS said while the dollar law “broadly requires” public schools to make certain school buildings available to eligible charter schools for $1, the law does not apply to school corporations which “distributes money that is received as part of a tax levy collected… to an applicable charter school” under portions of the Indiana Code.
The IPS board approved a resolution in November 2021, directing funding from an approved 2018 operating referendum to be distributed to charter schools within the Innovation Network for more than $4 million each fiscal year through December 2026, according to the lawsuit.
This comes after Indiana Governor Eric Holcomb signed Senate Enrolled Act No. 391 in May, which made changes to Title 20 of the Indiana Code, the portion of the code that centers around education and funding.
“Taking the General Assembly at its word, IPS passed Resolution No. 7985,” the documents read, “that expressly recognized IPS’ exemption from the dollar law and approved the transfer of a school building to Voices, a nonprofit organization that provides youth-empowering programs that prepare our next generation to become mentors, community organizers, policy change advocates and professional consultants for youth-serving organizations.”
After the IPS board passed resolution no. 7985, the Indiana Department of Education, along with charter school interest groups, claimed that IPS “is not exempt” from the dollar law. The Indiana DOE claims IPS was required to provide notice of the closures of the buildings to the department to comply with statutory notice requirements and the district did not do so.
Through this lawsuit, the district is asking the court to declare that IPS is exempt so the district can “proceed with its intended plans without the Defendants’ interference.” IPS said they are exempt because of the November 2021 resolution that distributes funds to charter schools.
In a response filed by the defendants, Todd Rokita, the Indiana Attorney General, said while SEA 391 granted some exceptions to the dollar law, the “key component” of the exemption is for districts who “distribute(s)” rather than ones who “distributed.”
“Because IPS has not held any tax referendum levy following the passing of SEA 391, and because SEA 391 was intended to operate prospectively, IPS’ proposed plan to transfer two school buildings to a nonprofit organization without following the statutory procedure is in violation of the dollar law,” the response reads.
Officials said the changes to SEA 391 would require the district to offer a share of a new levy to all charter schools in the county who apply. The defendants aim to receive an injunction for the district in the lawsuit, which would prevent IPS from selling or transferring the two buildings to the nonprofit without giving the proper notice or before the district conducts a tax referendum.