While most students nationwide still attend traditional public schools, this is beginning to change in some districts where growing education marketplaces have ended traditional public school monopolies. In some cases, most students are choosing schools other than their residentially assigned ones, leaving districts’ robust infrastructure underutilized.
In Indiana, where more than one in five of publicly funded students attended schools other than their assigned one via charter schools, open enrollment, and private school scholarships during the 2025-26 school year, this shift has become a catalyst for reform as state lawmakers try to right-size public education and streamline public services to support the most students.
Indiana House Bill 1423, which became law in March, aims to combine oversight of district and charter schools’ facilities and transportation in Indianapolis Public Schools (IPS), giving charter school students access to the district’s buildings and buses. This policy shifts management of these services to a non-district-governed entity, called the Indianapolis Public Education Corporation (IPEC), appointed by the mayor.
Moreover, charter schools will receive a share of local funds that were previously reserved for Indianapolis Public Schools alone.
Like charter schools, IPS still manages its own academic programming and personnel. However, the Indianapolis Public Education Corporation now oversees infrastructure for both district and charter schools to establish a unified system.
These governance changes make sense. Enrollment in Indianapolis Public Schools has dropped by 47%, or nearly 18,000 students, since 2006. While shifting demographics have contributed to this decline, IPS has also lost students to competition from other school districts, charter schools, and private schools.
Table 1 shows that, on average, 57% of publicly funded Indianapolis students chose schools other than Indianapolis Public Schools over the past five years.
Figure 1: Indianapolis student enrollment by school sector 2020-25
| Year | IPS enrollment | Open enrollment transfers out | Charter school enrollments | Private school choice scholarship participants |
| 2020 | 47.4% | 8.5% | 36.2% | 7.9% |
| 2021 | 44.1% | 9.7% | 37.9% | 8.3% |
| 2022 | 43.9% | 9.9% | 37.7% | 8.5% |
| 2023 | 42.5% | 10.3% | 37.2% | 9.9% |
| 2024 | 39.8% | 11.5% | 38.6% | 10.2% |
| 2025 | 38.3% | 12.0% | 39.0% | 10.7% |
Source: Indiana Department of Education.
Although IPS was once the largest district in the state, it no longer controls the majority of the Indianapolis education market, having lost students to competitors. As of 2025, about 62% of the city’s K-12 population used public funds to attend a non-IPS school, with 39% attending charter schools, 12% transferring to nearby districts, and 11% using private school scholarships.
This paradigm shift is why policymakers want to incorporate charter schools, which have educated the majority of Indianapolis students since 2025, into IPS’ infrastructure.
As the Center for Reinventing Education’s Robin Lake and Travis Pillow explained, “Districts possess extensive infrastructure–buildings, buses, food service operations, special education expertise–that will be increasingly underused as enrollments decline.”
The Indianapolis Public Education Corporation has already applied some of its new fiscal capabilities, putting a referendum on this November’s ballot to increase property taxes, estimated to raise $95 million annually. Although IPS Superintendent Aleesia Johnson said IPS needs these funds to remain fiscally solvent, the local teachers’ union, the Indianapolis Education Association, opposes the measure because charter schools would receive a share of the new funds under Indiana’s revised law.
Yet budget cuts are on the horizon no matter what. Even if the taxpayers support the referendum, IPS plans to cut its budget by $24 million in 2027.
IPEC won’t assume full control of IPS’ operations until the 2028-29 school year, when it will implement a unified transportation system and manage all IPS facilities, including decisions to shutter schools permanently.
Meanwhile, IPEC is assessing whether its goals are feasible. For example, in August, it submitted a report to the state legislature, showcasing a unified accountability system for district and charter schools that includes a framework for closing inefficient schools. In Nov. 2026, it will submit its plan detailing the possibility of establishing a unified transportation system for students enrolled at district and charter schools.
IPEC is also supposed to manage a unified enrollment system to make it easier for students to attend the school of their choice. For a decade, Indianapolis families have used Enroll Indy–the city’s centralized enrollment system–which let them see all district and participating charter school options at once. However, IPS announced plans this month to withdraw from Enroll Indy, opting to use Power School instead. This means that students would have to submit separate applications for district-run schools and charter schools, forcing families to navigate two enrollment systems instead of just one. IPEC has yet to comment on how IPS’ decision will affect its plans for a unified enrollment system.
Overall, Indiana’s reforms go further than other states’ efforts to fold charter schools into district infrastructure, which often only allow charter schools to co-locate in districts’ facilities. For example, a 2025 Florida law guarantees approved charter operators access to underutilized district buildings at no cost. This means that districts will have to share vacant or underenrolled school buildings with charter schools for free.
Already the nation’s third-largest district, Florida’s Miami-Dade Public Schools has approved plans for Success Academy charter schools to co-locate in five high schools because they are underutilized. Figure 2 shows student utilization in these schools per the Florida Inventory of School Houses (FISH).
Figure 2: School utilization in Miami-Dade Public Schools slated for charter co-location
| School | Percentage utilization | Surplus student capacity |
| Hialeah-Miami Lakes Senior High | 45% | 1,594 |
| Homestead Senior High | 75% | 734 |
| Miami Jackson Senior High | 50% | 1,161 |
| North Miami Senior High | 50% | 1,398 |
| Westland Hialeah Senior High | 65% | 604 |
Source: Florida Department of Education.
On average, these five schools only utilized 57% of their capacity, leaving nearly 5,500 seats available. The Miami Herald reported that the charter schools plan to use 1,400 of these open seats during the first year of operation.
School districts that have recently experienced enrollment drops while charter and non-public school enrollments increase could be primed for reforms like these, especially districts in more densely populated areas.
As districts grapple with declining enrollments, policymakers should consider adopting policies like those in Indiana and Florida. These policies streamline the investments taxpayers have made in facilities and other services to ensure that they help the most students, not just those who attend their residentially assigned school.
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