INDIANAPOLIS – School districts across Indiana say they are cash strapped because of a state law that caps property taxes and stifles how much money they can bring in.
By the summer of 2014, another state law will require districts make payment on all their debts first before doing anything with funds from property taxes.
As districts try to deal with financial uncertainty, some like Decatur Township are putting all options on the table, including cutting bus service.
Parents came out Wednesday night to a public meeting, where the superintendent told them about the district’s fiscal issues.
Tuesday night the school board approved a transportation resolution, effectively giving the state of Indiana notice they could do away with bus service in three years.
The superintendent said he is hopeful that will not happen.
Decatur Township is the latest district to put the fate of school buses on the line.
“The board made the approval this month. That simply starts the clock for that process,” said Dr. Matt Prusiecki, Superintendent of Decatur Township Schools.
That means the clock is ticking. Three years from now busing service may be gone in Decatur Township. The district is staring down a $2.5 million dollar shortfall. They’re projected to miss out on $7.5 million dollars, thanks to property tax caps in 2014.
Most of Decatur Township is residential, meaning property taxes are capped at the lowest tier. Any money they could receive from development at the Indianapolis International Airport is tied up in a TIF district. By rule, it automatically goes back to the city of Indianapolis. The school district doesn’t see a dime.
“We were trying to get the information out that describes what we’re in as a school district. Our choices are pretty simple. We can raise revenue, and this is the choice of the referendum, or we could go ahead and cut costs,” said Prusiecki.
Administrators are asking voters to approve a local property tax increase on the ballot in May, amounting to roughly $7 a month, by the district’s estimates.
The money could pump up the district’s transportation fund, which has been running at a deficit, and replaces reserves they’ve spent to stay afloat. The tax increase would generate roughly $3.85 million annually for the school system. The ballot question gives them authority to collect for seven years.
The superintendent said if the tax increase does not pass they will have to look at alternatives like consolidating schools and laying off staff just to balance the budget for this year.
“It was a God-send when they had the cap, when the cap came. It made it easier to pay your bills,” said Sherry Vanover, parent of a high school junior.
Parents like Sherry Vanover are fearful of property taxes getting hiked again, even if it is for the sake of the school.
“It’s going to make it harder for homeowners to pay mortgages if it keeps going up,” said Vanover.
The election is on May 6th. For a list of other public meeting times in the Decatur Township schools, you can click here.
Muncie Schools are also facing a similar busing issue. The district tried to get rid of busing quickly, but the state of Indiana stepped in and told them they must give the mandatory three-year notice.
A spokesperson for Muncie Schools told FOX 59 on Wednesday the board had deemed bus service essential to their district, though they do not have a definite way to pay for it yet.