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Indianapolis Public Schools teachers would receive smaller increases than in the past two years under a proposed two-year contract up for a vote on Thursday.
The 2025-27 contract for teachers, media specialists, social workers, counselors, psychologists, nurses, and speech and language pathologists offers a minimum salary increase of $1,510 in year one and $1,010 in year two, while raising the minimum salary to $54,800 in 2025-26 and $55,600 in 2026-27.
The raises come at an increasingly precarious time for IPS, which faces a funding cliff. The district is projected to end 2026 with an estimated $44 million deficit, according to cash flow projections from September.
The district relies on additional property taxes through an operating referendum to help fund salaries that will expire next year. A state-mandated group is also exploring how the district and charter schools could pool transportation and facility resources. And lawmakers earlier this year mandated the district to share more property tax revenues with charter schools while also passing property tax cuts. Those changes are estimated to cost the district roughly $5 million in 2026 and about another $4 million in 2027.
“It would have been unrealistic to expect IPS to provide the exact same compensation amounts as previous years,” said Tina Ahlgren, bargaining chair for the district teachers union, the Indianapolis Education Association, noting the district’s reduced enrollment and shifts in funding models. Ahlgren estimated about 1,500 employees are in the bargaining unit.
In a statement, the district said the contract will help IPS support students as it plans to campaign for another operating referendum, which will support its cash balance at the end of 2026-27 and beyond.
“Our partners in the Indianapolis Education Association understand our fiscal realities and worked collaboratively on this tentative agreement to reach what we all believe to be a fair and reasonable contract,” the district said.
Here are a few major takeaways from the proposed 2025-27 contract.
Teachers with new literacy endorsement would get raise
Raises are based on a teacher’s years of experience, academic specialty, and whether or not they received the two highest ratings, “highly effective” or “effective,” on their evaluations.
Although lawmakers recently repealed a state law forbidding raises for teachers rated as “ineffective” or “improvement necessary,” the proposed contract prohibits salary increases for those rated in those lower-performing categories.
All teachers who taught in IPS last year would receive annual increases. Teachers would also receive different raises based on whether they have completed one to seven years or eight or more years.
The district would continue to give additional raises for employees who served in hard-to-fill positions in the prior school year. Those include special education teachers, school psychologists, social workers, and certain STEM, career-technical, and dual-credit course educators.
The proposed contract also includes a new $150 salary increase for teachers who receive the literacy endorsement mandated for some educators by the state in 2024.
Teachers who perform additional roles, such as certain instructional or leadership roles, would receive stipends dictated through a four-tier system that maxes out at an additional $7,000 annually.
The contract would also maintain a program launched as a pilot in 2023 that provides additional pay for teachers who cover for absent colleagues.
Teachers would receive an extra $25 per hour if they lose their preparation periods to cover for a class due to the absence of another teacher. They would also receive the extra hourly rate if a principal places at least 30% of students from another class into their classrooms “due to the temporary absence of another teacher.”
Ahlgren said the program was popular with teachers during the previous contract cycle, with 341 participating in 2023-24 and 364 in 2024-25.
Could a retirement plan change bring teachers back?
Annual insurance premiums would also increase by about 8% under the contract, according to the teachers union.
The new contract would also change the vesting schedule for 403(b) retirement plans, reflecting an option the district said was already part of the retirement plan but not in the contract.
Rather than waiting five years to become fully vested, the contract offers a partial vesting schedule starting at 20% after one year of service. Employees would be 100% vested in the plan after five years.
Ahlgren said the change could recruit teachers who have left IPS and wish to return.
“There are a good number of folks who think the grass is greener and leave, and then are contemplating coming back,” she said. “They’ll weigh all the pieces, and it’s one more thing that could tilt the scale back in our favor to come back.”
The school board will vote on whether to ratify the contract on Thursday at 6 p.m. at 120 E. Walnut St.
Amelia Pak-Harvey covers Indianapolis and Lawrence Township schools for Chalkbeat Indiana. Contact Amelia at apak-harvey@chalkbeat.org.
