The Indiana Court of Appeals affirmed summary judgment in favor of Carmel Clay Schools and against Valor charter schools (also known as “Indiana Classical Schools.”) As we’ve discussed before, the “dollar law” is a law that requires local public schools to give buildings away to state charter schools, even if local taxpayers (rather than taxpayers statewide) funded construction of the public school building.
This one is tough to read because the General Assembly has made such a rat’s nest out of the Dollar Law’s legislative history – amending it year after year. The Court dutifully went through all of the changes. But, basically, Carmel Clay never triggered the Dollar Law. In 2018, when it made the decision to close the elementary school in question, the school corporation nevertheless continued to use the facility for classroom purposes for the next couple of years. When the building stopped being used for classes, it continued to be used for other school purposes — storage and the like. However, by the time classes moved out, the statute had been amended such that using the building for classroom purposes was no longer required to avoid triggering the Dollar Law. At that time – 2019, I think – the statute had been amended such that the building had to be vacant or abandoned before it was subject to the Dollar Law. (Fair warning, I have no idea how it reads right now; and the Court advised that the opinion was not analyzing the statutes as amended in 2023 and 2024.)
The Court dropped a footnote questioning whether the charter school had a private right of action under the law. (In other words, it seemed to cast some doubt on whether Valor could even bring this kind of suit directly or if it would be up to the State of Indiana to bring any enforcement actions.) However, neither party seems to have briefed the issue and the trial court didn’t decide anything about that question; so the Court didn’t answer the question.
And, I continue to question whether the law is in violation of a violation of Art. 10, §1 of the Indiana Constitution which provides requires the General Assembly provide a “uniform and equal rate of property assessment and taxation.” The reason higher local tax rates are permitted under this section is because additional local taxes pay for local benefits. See City of Richmond v. Scott, 48 Ind. 568, 572-73 (Ind. 1874) (determining that unequal rates of municipal taxation do not violate Art. 10, §1 because taxes for corporate purposes cannot be equal. The wants and necessities of towns and cities cannot be equal. Some require a higher and some a lower rate of taxation.) If the state is taking a locally financed building and using it to benefit the state generally, that rationale for unequal taxation evaporates.
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