School officials worry about protected tax levies

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INDIANAPOLIS – The Commission on State Tax and Financing Police will meet Wednesday to review the impact protected tax levies could have on school districts across the state.

The tax levies, which are designed to protect debt payment, go into effect next year. They require school corporations to make debt payments first, before they can fund transportation, bus replacement and capital projects. Capital projects include funding for building maintenance and technology for schools.

School officials are looking at this situation closely, anticipating the impact protected tax levies could have on the way school corporations operate. Executive Director Dennis Costerison with the Indiana Association of School Business Officials said he works closely with every school district in the state.

“They will keep their doors open, but they’re going to have to do things a lot differently,” Costerison said.

Costerison said it’s important for state leaders to review protected tax levies before next year. It isn’t that he and other school leaders don’t support property tax relief, he said, but their concern is the negative impact it could have for many school districts.

“This is an issue that needs to be reviewed by the General Assembly…we’ve got to find some resolve before the General Assembly ends in March of next year,” Costerison said.

Costerison showed Fox 59 numbers compiled by the Legislative Services Agency in September 2013. It showed the school districts, which would see the most impact, and by how much. For example, Franklin Township Community School Corporation and Beech Grove City School Corporation would lose 100 percent of their funds for capital projects, transportation, and bus replacement.

“We have three school districts that, if the numbers are correct, will lose 100 percent of their funding for transportation, capital and bus replacement for next year,” Costerison said.

Costerison pointed out that about 18 school corporations would have their funding slashed in half next year because of protected tax levies.

“So again, it’s very difficult to put on your programs if you lose half of your funding, especially if you’re looking at technology, maintaining your buildings, and for transportation,” Costerison said.

According to the paperwork, seven school districts will have a projected loss of about 80 percent or more, 18 districts will have a loss of about 50 percent or more, and 58 districts will have a loss of about 20 percent or more.  There are 86 districts in the state that will lose about 1 percent of their funding or less.

Costerison said the impact for many school districts goes beyond providing buses for kids. He said school districts could be affected across the board.

Beech Grove Superintendent Dr. Paul Kaiser said the problem for them is not property tax caps by themselves, but in addition, a drop in assessed evaluations.

“We’ve made all type of cuts. We’ve done a lot of things (and have been as) creative as much as we can, but the protected funds kind of restrict our ability with the property tax caps and (it) takes away a lot of our flexibility,” Kaiser said.

In 2009, Beech Grove passed a bus referendum that helped save their buses through 2016. The school district will rely on its voters again in 2016 to pass a renewal referendum. Kaiser said without it, they will not be able to pay for their buses. He said next year’s protected tax levies put some things into question, and told Fox 59 he would like to see a remedy and protected tax levies delayed.

“It puts us in some what of a bind. It limits how much money we can spend in a lot of areas.”

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