A failed referendum divided an Indiana school district. Now it wants to split for good.

This story has been updated to reflect Wednesday’s State Board of Education vote.

A southern Indiana school district successfully made its case to state education leaders on Wednesday for splitting into two — a move seemingly at odds with Indiana’s decades-long push for consolidation and one that could set an important state precedent.

Nearly two years ago, leaders of West Clark Community Schools — a district with about 4,600 students, located 10 miles from the state’s southern border — unanimously approved a plan that would allow a more suburban town to split from its rural neighbors.

The decision came after decades of growing animosity between the communities. Residents cheered when the board voted to separate. It was a schism spurred by anger over a failed $95 million referendum that would have gone toward improvements to Silver Creek High School in Sellersburg. The 2017 measure had support in the suburban Silver Creek township, but not in the two more rural areas of Henryville and Borden.

Since then, the district has been working to get approval from state agencies by proving the idea is financially viable, following new minimum requirements lawmakers defined last year. The State Board of Education passed the plan 10-1 on Wednesday after a brief discussion. It now goes to West Clark residents for final approval, and will likely end up on the May ballot.

Under the proposed split, Silver Creek township would take its roughly 2,900 students and four schools. The remaining West Clark district, Henryville and Borden, would have about 1,700 students in two elementary schools and two junior-senior high schools.

The district argues this would “eliminate internal competition for resources,” according to its reorganization plan. Borden and Henryville schools want to dedicate more resources to vocational training, while Silver Creek wants to prioritize upgrading buildings and technology to keep up with its growing enrollment.

“I just feel like Silver Creek has greater needs than the other two have willingness to participate in,” said school board president Doug Coffman, who has sat on the board for more than 20 years and represents Silver Creek.

Experts are watching this case closely because it could have implications beyond West Clark, opening the door for other districts to follow the same process. And the state board may have set a new precedent for how it handles these requests, including how much decision-making power it leaves up to local voters.

“It is critical that local voters determine whether West Clark schools reorganize,” Board Chair B.J. Watts, said in an emailed statement. “When a significant change like this is considered, the best people to decide what should happen are those who live there.”

West Clark’s attorney Jonathan Mayes says splitting the district in two is a move to allow communities, and their voters, to “chart their own destiny.”

But Rebecca Sibilia, founder of EdBuild, a nonprofit that highlights funding disparities, cautions against leaving this decision up to local communities. She said Indiana’s school funding system offers an incentive for districts to try to shrink its borders to capture only voters who can or want to support a tax increase.

“It’s the state’s responsibility to make sure education is working for all kids,” she said, “not just kids that are living in communities that can afford to resource their own schools at a high level.”

Sibilia said state leaders should consider more than whether school districts’ secession proposals are financially viable, but also how they will affect students.

While West Clark’s proposed split is financially motivated, she noted other states have seen new secession laws allow for self-segregation by race and socioeconomics. Indiana, in outlining the process for such splits, has “opened Pandora’s box,” Sibilia said.

David Freitas, the only state board member who voted against West Clark’s plan, said he wanted to see it give greater consideration to how students will be impacted.

Purdue University professor Larry DeBoer, who studies school referendums, said the proposed enrollment numbers for the new, independent districts fall within the ideal sizes for school systems in Indiana. Expenses rise for districts with fewer than 1,500 students or more than 6,000 students, DeBoer said. However, it could be a cause for concern if the Borden/Henryville district saw its enrollment shrink.

Enrollment at schools in Silver Creek has grown by 151 students across all grades between 2013 and 2018. In the same amount of time, schools in Henryville and Borden had 138 fewer students in 2018.

A financial review by the Department of Local Government Finance also raised concerns about the effect of declining enrollment, given that state funding is distributed on a per-student basis. The department found the reorganization will likely increase costs for the two districts, rather than make them more financially efficient, though not all budget projections could be verified.

Tensions between communities in West Clark have been building for decades, said Coffman, the school board president. The two different areas never truly became one after they were forced to consolidate by the state in the 1960s, he said. (Indiana has for decades pushed school districts to consolidate through legislative mandates and incentives to encourage efficiency.)

Four different consolidation plans failed before voters finally approved joining Borden, Henryville, and Silver Creek township into one district. Since then, each area has maintained its own elementary, middle and high school, rather than integrating students. Students weren’t allowed to transfer within the district until this year, Coffman said. An attempt in the 1990s to combine high schools met swift opposition.

Farmers face a higher tax cap than regular homeowners, so when West Clark floated the referendum in 2017, residents in rural areas were likely going to pay a higher rate than those in Silver Creek. Meanwhile, if it had passed, the majority of students in those areas wouldn’t go to the school that would have benefited, Silver Creek High School.

“Each community has its own DNA,” Coffman said. “I think the deep-seated divisiveness doesn’t come from the [school] board, it comes from community members.”