Indianapolis Public Schools announced on May 14 a series of financial measures to address a $40 million deficit projected for the 2026-27 school year. Superintendent Dr. Aleesia Johnson said the district has made $24 million in reductions, cutting the deficit by more than half.
The announcement comes as IPS faces rising costs in fuel, food, and services, while recent changes in state funding policy require existing funds to be distributed across more schools. The district said these factors have made it necessary to make difficult financial decisions.
“Like many families are experiencing in their home budgets, IPS is facing rising costs across fuel, food, and services. At the same time, changes in state funding policy — most recently, SEA 1 — means we are stretching the same dollars across more schools. Together, this requires us to make difficult but necessary financial decisions,” Johnson said.
For the upcoming academic year, IPS will reduce its workforce by 87 staff members out of a total of 3,709 employees. Staff reductions account for about two percent of all cuts. The $24 million reduction includes $7 million from school-based budgets and an additional $17 million from district-level operations.
Johnson explained that “the impacts of our school-based and central office budget reductions will be felt across our system — in services, supports, and in how we operate day to day.” Changes include shifts in staffing structures at both schools and central offices; adjustments to elementary and middle school athletics through enhanced partnerships with community organizations; and fewer extracurricular buses running on Friday afternoons.
IPS reports that about two-thirds of students who might normally take an extracurricular bus on Fridays instead use competition buses for games or events held that day. As a result, providing separate EC buses is no longer considered necessary.
The superintendent highlighted ongoing enrollment declines as another factor affecting funding: “Like many urban districts, IPS has experienced enrollment declines in recent years. Because funding is tied to enrollment, fewer students means fewer dollars to support our schools and services.” For the current family of schools within IPS there was a six percent decline reported for the previous year.
Recent legislative changes have increased pressure on finances by requiring funds be spread among more public schools without increasing overall resources—”Imagine our district’s budget as a pie… Now imagine that the same pie has to cover costs not just for IPS but every public school in Indianapolis,” Johnson said.
Indianapolis Public Schools serves over 30,000 students through its network of programs focused on academic excellence with tailored education approaches according to the official website. The district also emphasizes racial equity as a core strategic priority according to its official website.
Looking ahead toward long-term stability Johnson stated: “Our goal is not to make any additional changes to our budget for the 2026-2027 school year.” She also noted that no options have been ruled out regarding future plans but confirmed there would be no closures or consolidations during this period. However she added: “No,0IPS0still0needs0to go out for an operating referendum in November 20260— even with these budget reductions.” Decisions about participation will be determined by IPEC after collecting input from all eligible schools.
