Indianapolis Public Schools planning budget cuts

Driving the news: IPS is cutting $7 million from school budgets next year and weighing additional cuts to address a projected $40+ million funding gap that could drain its reserves within a year.

• "We do anticipate the extent of needed reductions to represent a new challenge," Superintendent Aleesia Johnson said in a recent video.

Between the lines: These significant spending cuts are what's necessary based on the assumption that voters pass a new operating referendum to replace the current property tax hike, which is set to expire later this year.

• Johnson confirmed IPS will pursue another operating referendum this fall.

Yes, but: It's not a decision IPS can make alone anymore.

• Starting this summer, the newly created Indianapolis Public Education Corporation will have authority over school budgets, property taxes and referendums.
• Mayor Joe Hogsett must appoint IPEC's nine members by the end of the month, and they will ultimately decide whether to put a referendum on the November ballot.
• Threat level: The current operating referendum brings in about $40 million annually, much of which has been used to increase teacher salaries.

State of play: The budget gap is a product of several factors, Johnson said, including declining enrollment and changes to state school funding policies — like property tax cuts and a new mandate to share those dollars with charter schools.

What we're watching: Whether further upheaval will exacerbate financial problems by quickening enrollment declines.

• Enrollment had largely leveled out after a pandemic-era drop but fell again this current school year.
• The district made major changes at the elementary and middle school levels during the Rebuilding Stronger initiative, closing several schools and shifting grade configurations.
• The hope was that the short-term pain would be offset by long-term gains in stability and predictability for families, but it's likely the district is facing further school closures.