Hamilton Southeastern Schools voters will decide November 3 whether to replace the district’s operating referendum, just three years into the eight-year measure approved in 2023 with 70% support. HSE is far from alone. School finance experts estimate 40 to 50 Indiana districts will place referendum questions on this fall’s ballot, including Carmel, Noblesville, Westfield and Zionsville.
Why so many districts, all at once, and why is HSE asking again so soon? The answer starts with two changes state lawmakers made in 2025 — and with the way Indiana requires school districts to keep their money in separate boxes.
What changed in 2025
Senate Enrolled Act 1, the property tax overhaul signed by Gov. Mike Braun in 2025, gave homeowners relief through larger homestead deductions. Those deductions shrink the assessed value a tax rate is applied against. HSE’s current referendum rate — just under 20 cents per $100 of assessed value — stays the same, but it now yields far less. Consultants project the district will collect about $45.3 million less than expected between 2026 and 2031, and HSE’s net assessed value is projected to decline for several years as the new deductions phase in.
The same legislation limited when schools may ask voters for help. Referendum questions may now appear only on general election ballots in even-numbered years. If HSE waits, its next opportunity is November 2028 — well after the revenue squeeze bites. That one-chance-every-two-years rule is why so many central Indiana districts are on the ballot this November.
The money is in separate boxes
Many residents ask a fair question: if the district is short on money, why do we see construction and capital projects underway? The answer is that Indiana law requires school districts to keep their money in separate funds, and strictly limits what each fund may pay for.
The Education Fund is state tuition support, paid per student, and covers teachers and classroom instruction. The Operations Fund, fed by local property taxes, pays for capital projects, building maintenance, transportation and bus replacement. The Debt Service Fund repays bonds the district sells for construction and renovation. The Referendum Fund holds voter-approved property taxes, spent as promised in the ballot language — at HSE, mostly teacher pay.
Money generally cannot move between these boxes. Bond proceeds and debt service dollars legally cannot pay a teacher’s salary. So a renovation funded by bonds moves ahead even while the classroom budget is squeezed — and stopping the project would not free up a dollar for teachers.
Lawmakers acknowledged that rigidity with one narrow exception: in 2026 only, districts may make a one-time transfer from debt service to operations. HSE’s board approved moving $2.6 million under that provision in July.
Hasn’t the district cut costs?
HSE says it has. The district reports identifying more than $7 million in ongoing reductions over the past two years, and its budget reduction committee has recommended $7.8 million in cuts, partly reflecting enrollment roughly 1,500 students below its level six years ago. Thanks to attrition, all 18 teachers who received reduction-in-force notices this spring will keep jobs, and no teacher layoffs are coming this year.
The district also points to a structural gap: HSE ranks 370th of 376 Indiana districts in state tuition support, receiving $7,121 per student. At the state’s non-charter average of $7,490, HSE would collect more than $7.4 million in additional annual revenue.
What voters will see — and what they would pay
State law requires the ballot to show the maximum possible impact, so the question will cite a rate of up to 36 cents per $100 of assessed value over eight years, and roughly $700 per year on a median home rounded up to $400,000. District officials emphasize they do not expect to levy the maximum in any year. CFO Tim Brown will propose a 2027 rate of 22.75 cents — about $3 more per month for the median homeowner than they pay under the current referendum. The school board would set the rate annually through the budget process.
If voters say no, district officials say HSE would face additional reductions to staffing, programming and student supports — with no chance to ask again until November 2028.