How Indiana Charter Schools Can Participate in Local Referenda
Indiana charter schools now have a clearer path to participate in certain local school referenda—but participation is not automatic, and referendum revenue should not be confused with the separate operations property-tax sharing framework.
This guide focuses on process: how a charter school determines potential eligibility, monitors local activity, documents its position, and budgets any eventual distribution.
By Kevin Davis | October 9, 2026 | Updated through the 2026 Indiana Code
Key Takeaways
- Referendum revenue and ordinary operations property-tax sharing are separate statutory pathways.
- The participation threshold is applied by school corporation, not to a charter school's total enrollment.
- Eligible students at multiple charter schools may be aggregated when they share legal settlement in the same corporation.
- A successful referendum does not guarantee a fixed annual charter payment.
- Boards should document neutral factual analysis and obtain legal guidance before any advocacy activity.
Download the referendum participation guide (PDF)
Important disclaimer: This publication is provided for educational and planning purposes only. It reflects Indiana Charters’ interpretation of Indiana law and publicly available guidance as of October 9, 2026, and has not been reviewed by legal counsel. It is not legal, tax, election-law, or accounting advice and does not create an attorney-client relationship. Statutes, appropriations, agency guidance, student data, and local calculations may change. Schools should verify requirements with the appropriate state or local agency and consult qualified professional counsel when making legal, referendum, advocacy, compliance, or budget decisions. Nothing in this publication should be interpreted as campaign guidance or authorization to use public-school resources for political advocacy.
First, keep the two funding avenues separate
Indiana law addresses at least two distinct local-revenue pathways:
- Operations property-tax sharing, which begins statewide with qualifying collections after December 31, 2027 and phases in through 2031; and
- Referendum revenue sharing, which depends on a local referendum and the statutory rules applicable to that referendum.
A charter school can be affected by one without receiving the other. Separate them in board discussions, forecasts, and accounting records.
For the operations framework and its interaction with the $1,400 grant, see Indiana Charter School Property-Tax Sharing: What SEA 1 Changes—and What It Does Not Guarantee.
Which referenda are covered?
The answer depends on when the referendum is held and, for certain older referenda, where the school corporation is located.
Indiana Code contains special rules for qualifying referenda in Lake, Marion, St. Joseph, and Vanderburgh counties that were approved under the earlier framework. Those provisions generally continue for the term of a qualifying referendum.
For operating referenda held after December 31, 2027, the newer statewide participation framework in Ind. Code § 20-46-1-22 applies. School-safety referenda are governed separately, including the charter-participation provisions in Ind. Code § 20-46-9-6. Because transition rules can matter, schools should identify the referendum date, county, statutory authority, purpose, and term before projecting revenue.
What is the eligibility threshold?
The newer framework uses the greater of:
- 100 qualifying charter-school students with legal settlement in the school corporation; or
- 2% of the school corporation’s spring average daily membership.
The count is made at the school-corporation level, not by asking whether one charter school has 100 students overall. Qualifying students attending multiple eligible charter schools are aggregated when their legal settlement is in the same corporation. Virtual charter schools and students receiving more than 50% virtual instruction are excluded from the qualifying count. (Ind. Code §§ 20-46-1-21 and 20-46-1-22.)
This distinction can determine whether a charter school has a financial interest in a referendum at all.
A practical participation process
Step 1: Build a legal-settlement map
For each enrolled student, identify the corporation of legal settlement using current, supportable records. Summarize counts by corporation without exposing student identities in board or public materials.
Update the map regularly. A school’s total enrollment may remain stable while its corporation-by-corporation distribution changes enough to affect eligibility.
Step 2: Identify other qualifying charter enrollment
The threshold uses aggregate qualifying charter enrollment connected to the corporation. A school may fall below the threshold alone but qualify when students at other eligible charter schools are included.
The state will need reliable data and a transparent method for communicating those aggregate counts. A charter school should not assume it is ineligible merely because its own count is below 100.
Step 3: Monitor corporation action early
Track school-board agendas, resolutions, public hearings, fiscal plans, and election filings for every corporation that could meet the threshold. Waiting until the ballot is finalized leaves little time to verify eligibility, understand the revenue base, or communicate with families.
Assign one person to maintain the calendar and source documents.
Step 4: Confirm the referendum’s legal category and timeline
Document:
- the statutory authority;
- the referendum question;
- the election date;
- the tax rate or revenue target;
- the proposed term;
- the eligible uses of revenue; and
- the rule governing charter-school distribution.
Do not rely on a press release or ballot summary alone.
Step 5: Request the calculation inputs
Ask the appropriate state or local officials for the best available information on:
- qualifying charter-student counts;
- the corporation’s spring membership;
- the resulting greater-of threshold;
- projected referendum collections; and
- the allocation method and payment schedule.
Keep written responses with the school’s budget records.
Step 6: Make and document the school’s decisions
The charter school’s board should receive a plain-language explanation of the referendum, potential financial effect, uncertainties, and any required action. Minutes should reflect the board’s consideration without turning the meeting into campaign activity.
School leaders should obtain legal guidance before using school resources for referendum advocacy. Providing neutral factual information is different from political campaigning.
Step 7: Prepare operationally for a successful referendum
Before recording revenue, establish:
- a separate general-ledger account;
- allowable-use controls;
- a reconciliation method;
- a documentation owner;
- a process for resolving count discrepancies; and
- a plan for the referendum’s expiration.
Referendum money is time-limited revenue. A school should avoid using it for permanent obligations without an exit plan.
When should referendum revenue enter the budget?
Use staged recognition:
- Monitoring stage: $0 budgeted; disclose as a possible future source.
- Ballot stage: maintain scenarios, but do not assume passage.
- Post-election stage: confirm the referendum result, eligibility, estimated collections, allocation, and payment timing.
- Official-estimate stage: budget the supportable amount and record the assumptions.
- Collection stage: reconcile estimates to actual distributions.
This discipline prevents a promising ballot measure from becoming unsupported operating revenue.
Common misunderstandings
“Our charter has more than 100 students, so we qualify.”
Not necessarily. The test is not based on the charter school’s total enrollment. It is applied separately to each school corporation in which the charter school’s students have legal settlement. For that corporation, the threshold is the greater of 100 qualifying charter-school students or 2% of the corporation’s spring average daily membership. A charter school with more than 100 students overall may therefore qualify in one corporation, but not another—or may not meet the threshold in any single corporation.
“The corporation has fewer than 100 of our students, so we do not qualify.”
Not necessarily. The corporation-level test uses the combined number of qualifying students attending all eligible charter schools who have legal settlement in that same corporation. A single charter school may have fewer than 100 such students and still meet the threshold after eligible students at other charter schools are included.
“Property-tax sharing means we automatically share referendum revenue.”
No. Operations property-tax sharing and referendum-revenue sharing are separate statutory pathways. Each has its own eligibility rules, triggering events, calculations, and timeline. Eligibility for an operations distribution does not, by itself, establish eligibility for referendum revenue.
“Once a referendum passes, the annual amount is fixed.”
No. A successful referendum authorizes the levy; it does not guarantee a fixed annual payment to a charter school. Actual collections, qualifying student counts, allocation inputs, payment timing, and continued compliance with the applicable statute can affect the amount distributed from year to year.
The threshold and referendum-distribution rules described above come primarily from Indiana Code §§ 20-46-1-21 and 20-46-1-22. Operating-referendum resolutions and projected charter distributions are addressed in Ind. Code § 20-46-1-8. School-safety referendum participation is addressed separately in Ind. Code § 20-46-9-6. The distinct operations property-tax pathway is addressed in Ind. Code § 20-46-8-12.
A board-ready checklist
- Current students summarized by corporation of legal settlement
- Aggregate qualifying charter enrollment requested or verified
- Greater-of threshold calculated for each relevant corporation
- Referendum authority, purpose, date, rate, and term documented
- Board brief prepared with neutral facts and uncertainties
- Legal guidance obtained before any advocacy activity
- Separate revenue account and allowable-use controls prepared
- Revenue excluded from the adopted budget until supportable
- Expiration and replacement plan documented
Continue the series
- Indiana Charter School Property-Tax Sharing: What SEA 1 Changes—and What It Does Not Guarantee
- The Rural Charter Funding Gap: When 100 Students Still Is Not Enough
Sources and important limitation
- Indiana Code § 20-46-1-8 (operating-referendum resolution, projected charter distributions, and participation procedures)
- Indiana Code § 20-46-1-21 (certain qualifying earlier operating referenda)
- Indiana Code § 20-46-1-22 (statewide operating-referendum framework after December 31, 2027)
- Indiana Code § 20-46-9-6 (school-safety referendum charter participation)
- Indiana Code § 20-46-8-12 (separate operations property-tax framework)
- DLGF, *Legislative Changes to Property Tax Referenda and Controlled Projects* (June 10, 2025)
This publication has not been reviewed by legal counsel and is not legal, tax, election-law, accounting, or campaign advice. Nothing in it authorizes the use of public-school resources for political advocacy.
Prepare Before the Referendum Timeline Accelerates
Indiana Charters can help schools map legal-settlement data, monitor corporation action, brief the board, and build disciplined revenue controls.