School district budgets across Indiana are being squeezed following the General Assembly’s passage of Senate Bill 1 earlier this year. The Hamilton Southeastern (HSE) School District is now grappling with those financial realities as the school board moves closer to approving a total 2026 budget of just under $305 million.

The funding shortfall is also fueling tension between the HSE Education Association (HSEA) and district administrators as the two sides negotiate a new one-year contract.

HSE Chief Financial Officer Tim Brown outlined the district’s fiscal challenges during Wednesday night’s public budget hearing. State support for public schools is based on student enrollment, and this year’s official count shows 409 fewer students enrolled in HSE Schools. Brown said the enrollment drop translates to a loss of about $1 million in the district’s Education Fund, which primarily supports teacher salaries and benefits.

Incoming transfer students—79 in total—offset some of the loss, but rising expenses are adding new pressures. Health insurance premiums are increasing by 10.5% or 16.8% depending on the employee’s chosen plan, significantly impacting both the district and staff.

Five people spoke during the budget hearing’s public comment period.

• The first speaker expressed concern about misinformation surrounding the ongoing teacher negotiations.

• The second praised teachers and argued district officials are not doing enough to support them.

• The third said there is a lack of trust in administrators and board members, urging district leaders to find “creative and equitable” solutions in bargaining.

The final two speakers represented HSEA. Craig Frawley, the union’s lead negotiator, said HSE is the only school district in the Indianapolis metropolitan area proposing what he described as essentially a pay cut for teachers and asked the board to explain why. HSEA President Tyler Zerbe criticized current district leadership for “playing the blame game” by pointing fingers at previous administrations.

Board member Dawn Lang said she has been hearing from residents who are asking what the district is doing to control spending as families face rising living costs.

The HSE School Board is scheduled to take final action on the 2026 budget at its October 22 meeting.

You can see CFO Tim Brown’s presentation to the school board at this link.