Indiana School Staff Cuts From SEA 1: What the Superintendent Survey Found

Indiana school districts are cutting teachers and support staff, and their superintendents name property tax reform as the main reason. The Indiana Capital Chronicle reported on September 23 on the second annual school funding survey from the Indiana Coalition for Public Education (ICPE), a volunteer advocacy group. In August 2026 it emailed superintendents at all 290 traditional public school corporations. 144 responded, a 49.7% participation rate. Of the districts that answered, 60.7% have cut or committed to cutting teaching staff, and another 32.4% are considering it.

For homeowners this is the other side of Senate Enrolled Act 1: the deductions and credits that shrink your bill also shrink the revenue that pays for school buses, buildings, and staff.

What the ICPE Superintendent Survey Found

All figures below come from the ICPE 2026 School Funding Survey report.

• Expected impact of SEA 1: 97.2% expect a negative impact this year and 98.6% in future years. Rural districts reported a continued negative impact at 97.9%; suburban and urban districts at 100%.
• Support staff: 50.0% have already cut support staff, up from 26.5% in the 2025 survey. Counting districts that have decided to cut, the total is 66.2%, and 30.4% more are considering it.
• Teaching staff: 45.8% have already cut teaching positions, up from 23.1%. Counting districts that have committed to cuts, the total is 60.7%. With the 32.4% that are considering cuts, the figure reaches about 93%.
• Other measures: 44.6% have reduced or will reduce planned raises. 39.1% have dropped or will drop planned facility improvements. 37.7% have issued or will issue a new general obligation bond.
• How big the gap is: To deliver the services their communities expect, districts said they need a one-time increase averaging 8.0% (answers ranged from 1% to 25%), followed by about 5.6% a year.

Rural vs. Urban: Rural Districts Cut Staff Instead of Asking Voters

Rural districts made up 66% of the respondents. According to the report, they are "significantly less likely to pursue or consider pursuing a referendum," and a larger share of them have already cut teaching staff than suburban or urban districts.

The survey also asked why districts are not going to voters. Of the 85.6% not pursuing a referendum this year:

• 39.2% cited a lack of community support
• 17.7% have cut enough costs to avoid one so far
• 16.5% plan to exhaust cuts before asking voters
• 15.2% already have a referendum in place that does not yet need renewal
• 7.6% are preparing for 2028

In the end, 38 corporations placed questions on the November 2026 ballot. That is 13.1% of all districts, and it is a record for a single Indiana election, as Capital Chronicle columnist Niki Kelly noted on September 25. Our November 2026 referenda preview tracks the statewide list.

Why SEA 1 Hits School Operations Funds Hardest

Three provisions of state law explain why the cuts land on staff and services.

1. A smaller tax base. SEA 1 expands the homestead deductions on a schedule that runs through 2031 (our phase-in schedule has the details) and adds a 10%/$300 supplemental homestead credit under IC 6-1.1-20.6-7.7. Under IC 6-1.1-20.6-9.5(b), a credit reduces each taxing unit's collections. The unit may not raise its levy to make up the difference, except through school referendums under IC 20-46-1 and IC 20-46-9.

2. Circuit breaker losses go to operations, not debt. The property tax caps under IC 6-1.1-20.6-7.5 limit bills to 1%, 2%, or 3% of gross assessed value. Districts must still pay their bonds in full regardless of cap credits (IC 6-1.1-20.6-10(b)). IC 6-1.1-20.6-9.8 treats debt service and voter-approved taxes as "protected." The revenue lost to the caps therefore comes out of unprotected levies. For a school district, that means the operations fund levy (IC 20-46-8), which pays for buses, buildings, and other costs not covered by the education fund. The education fund is where state tuition support goes (IC 20-40-2-3). One ICPE respondent called SEA 1's hit to "our Operations Account" the district's greatest threat. See Marion County's cap losses and IPS's $24 million in cuts.

3. One ballot every two years. In 2025, IC 3-10-9-3(b) was amended to allow school referendums under IC 20-46-1 and IC 20-46-9 only at a general election. Under IC 3-10-2-1, general elections are held in November of even-numbered years. A district that skipped 2026 cannot ask voters again until November 2028.

What It Means for Homeowners: Lower Bills, Fewer Services, or a Referendum Line

SEA 1 lowers homeowner bills by giving districts less revenue. A district can absorb the loss through cuts, as the survey shows, or ask voters for a referendum levy.

A referendum levy sits outside the caps. Under IC 6-1.1-20.6-7.5(b), taxes approved by voters in a referendum "shall not be considered" when the circuit breaker credit is calculated. On a capped homestead, the 1% ceiling covers everything else on the bill, and the referendum rate is charged on top of it. An operating levy can last up to eight years and then needs renewal (IC 20-46-1-11).

What to Do Next

1. Check whether your district is on the November 3, 2026 ballot. Use the statewide preview, or the Marion County voter guide if you live there.
2. Work out the cost before you vote. Multiply the proposed rate by your net assessed value. For IPS, our 37.2-cent referendum breakdown shows the math.
3. Make sure your assessed value is right. Look up your parcel's value and deductions with AribaTax Property Lookup. If the value is too high, see how a tax appeal can lower every rate applied to it.