A rural Indiana school district set to be dissolved by 2027 can resume classes next month and continue operating for two more years, a judge ruled.
Union School Corp. in East Central Indiana sued the state in May, seeking to overturn a new law that mandates the district’s closure. District officials argue lawmakers violated the Indiana Constitution by adding the provision to a property tax bill without a public hearing.
The mandate, part of Senate Enrolled Act 1, was approved in the final days of the 2025 legislative session and without a public hearing. It requires Union to shut down by July 2027 and prevents the district from entering into new obligations after July 1, 2025 — two years before the closure date.
District leaders said the restrictions are “unlawful and unworkable.” Superintendent Galen Mast previously said the law would prevent the district from hiring staff, buying supplies, securing insurance, or even serving school lunches for the new school year.
But the state responded in court that Union can operate “business as usual” until its final year. In a June ruling, Randolph Superior Court Judge Brian Hutchison agreed.
“Union School Corporation is not prohibited from incurring new obligations in the ordinary course of operations,” Hutchison wrote.
The civil lawsuit names the State of Indiana, Gov. Mike Braun, and Secretary of Education Katie Jenner as defendants. Braun and Jenner’s attorneys have requested dismissal, arguing the lawsuit does not allege specific claims against them.
Braun did not respond to a request for comment. The Indiana Department of Education declined to comment, citing pending litigation. A spokeswoman previously said the agency would work with Union to support students.
'Dark cloud' over Modoc
The decision to dissolve Union Schools has drawn backlash in the rural town of Modoc, where the district is based. Parents and educators confronted lawmakers during an April meeting, frustrated that the proposal was added without public notice or input.
Union serves about 290 students in person and approximately 7,500 through virtual programs. The law directs students, funding, and property tax revenue to be split between Blue River Valley Schools in Henry County and Monroe Central Schools in Randolph County.
Republican lawmakers who backed the closure cited low test scores and declining enrollment as reasons but offered few details.
Mast, Union’s superintendent, told WFYI that a “dark cloud” hangs over the district despite settling they can move forward with limited restrictions until 2027.
“It's just kind of in the back of your mind that it's still there, and until that goes away, there won't be real peace,” Mast said. “It's something that we know we have to fight.”
Union’s school year begins Aug. 6. Mast said the community is pressing forward, but the situation has created anxiety and stalled momentum.
“Our biggest fear is that it impacts our students and our staff,” Mast said. “When you have something like this – and you're named in something like this – it can impact your enrollment. It can impact the perception of the school.”
Rachel Fradette is the WFYI Statehouse education reporter. Contact Rachel at rfradette@wfyi.org.
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