Per reporting by Amelia Pak-Harvey for Chalkbeat Indiana: Following a decision by Indianapolis Public Schools to reorganize its schools, a plan which calls for closing six schools, there are three charter schools who expressed an intent to take IPS buildings away from the school district “through any viable means.” One of those viable means is by payment of a dollar under a state law applicable to school systems that are not currently using buildings, usually paid for with local tax dollars, requiring those schools to give away their buildings to outside charter school vendors for the nominal sum of a dollar. This is the price regardless of the market value of the buildings.
The Indiana Court of Appeals recently said that the law doesn’t constitute a “taking” of local property by the State because the takings clause does not apply to confiscation of local government property by the State of Indiana. According to the decision, the State can take any local government property it wants, regardless of how it was acquired or who paid for it originally, without paying for it. The specific question before the Court of Appeals was whether the mandatory $1 sale from school corporations to charter operators was a taking without just compensation. But the logic of the Court’s holding was not confined to the issue of schools and charters. Says the Indiana court of appeals, “[t]he takings clause does not apply against the state in favor of its own municipalities because a municipality is merely a department of the state, and the state may withhold, grant or withdraw powers and privileges as it sees fit.”
I’ve received some push back on this argument, and it’s not a slam dunk, but I continue to think that this taking of property paid for by local tax dollars in the service of the state generally violates Art. 10, §1 of the Indiana Constitution which requires the General Assembly to provide a “uniform and equal rate of property assessment and taxation.” (You can charge locals a higher local tax rate for goods and services that stay local, but you can’t balance the State’s budget on the backs of the taxpayers of, say, Benton County.) Be that as it may, I think the better course of action is for the General Assembly to back away from this indirect, uneven, and unpredictable subsidy of charter schools. It creates a disincentive for regular schools to stop operations at a building even where doing so would be rational. If the General Assembly wants to subsidize charter buildings, it should create a State funded subsidy program.