INDIANAPOLIS — The state of Indiana will close a 143-year-old home for troubled children in May, disappointing alumni who had found refuge there and the veterans groups that supported it.

The Indiana State Department of Health said it would close the Indiana Soldiers’ and Sailors’ Children’s Home in Knightstown and move its 114 students in grades 5-12 into community settings after the current school year ends in May.

Indiana Health Commissioner Dr. Judy Monroe noted the state would need $65 million to $200 million to renovate the 50-acre, 53-building campus that once housed 1,000 children.

“We really need to put our money into services, not bricks and mortar,” Monroe said in an interview Wednesday after announcing the closure to the staff at the home about 25 miles east of Indianapolis. “Institutionalizing children is just not where society is at today.”

However, alumni fondly recalled the years they spent there.

“It was the best thing, really, that ever happened to me,” said Tim Brown, 71, who became a star running back with the Philadelphia Eagles. He and his brother moved there from Richmond in the 1950s after their father, a World War II Army cook, and their mother split up and the family disintegrated.

“People say, ’Oh, you went to the Children’s Home,’ and I say, ’Thank God,”’ Brown said from his current home in Palm Springs, Calif.

Private funders founded the home in 1865 to care for and educate orphaned and destitute children of Civil War Union Army veterans. The state took control two years later, and in the 1890s the school began accepting the destitute children of all veterans. Eventually, it opened its doors to other at-risk children, with preference in admission given to those of veterans.

Veterans groups including the American Legion and the Veterans of Foreign Wars adopted the home as one of their pet projects and paid for new buildings and capital improvements. The Indiana Department of the Legion pays for the class rings and class trip of graduating seniors.

“We have a tremendous number of e-mails and phone calls from our members around the state who are very concerned about this,” said Hugh Dagley, assistant adjutant of the Indiana Department, which is holding its midwinter meeting this weekend in Indianapolis. “It’s going to be cussed and discussed.”

The home received financial support not only from the Indiana Department but also individual posts around the state, Dagley said.

Monroe said the decision to close the home was unrelated to recent Indiana budget cuts but rather culminated from a three-year review that also included state education, budget and social services officials and architects.

The state spent more than $10 million to operate the home last year at an average cost of nearly $250 per child per day, Monroe said. Parents and guardians could remove their children at any time, and 72 children out of 185 left during that year. The average length of stay had fallen to just two years.

It’s much different from the experiences of Susie Yagher and four younger siblings who went there from a troubled family in southern Indiana in 1969, when she was 15 and the home housed 500 children. Yagher, 55, of Ormond Beach, Fla., operates a private Web site for alumni of the home’s Morton Memorial School.

“We are all just devastated,” she said. “Everybody was in the same boat, and you became brothers and sisters, basically.”

She feared the state would convert the campus into a prison, making it no longer accessible for alumni to visit.

Joseph Fistrovich, chief financial officer of the Indiana Department of Correction, said officials in the administration of Gov. Mitch Daniels have informally discussed turning the grounds into a prison.

“At this time there is no funding in the budget,” Fistrovich said.