Some state legislators looking for a solution for the problem said poor financial management isn’t the only reason for the districts’ woes. Schools confronting declining property values and a large share of residential taxpayers — who proportionately pay less in property taxes than business — also find themselves in a pinch.
State Sen. Carlin Yoder, R-Middlebury, whose district includes Goshen, points to a nearly 10 percent drop in assessed value of property in Elkhart County between 2010 and 2012. It resulted in almost $815 million less in taxes for local governments, libraries and schools.
“The Goshen schools are managed well,” Yoder said. “But they’re facing a problem that isn’t their fault.”
State Sen. Pete Miller, R-Avon, is working with Yoder, Kenley and others to find a fix. In Miller’s district, at least two school corporations took on big debt to build schools to accommodate the growth of young families with school-age children. Those districts now stand to lose a big portion of their transportation dollars because of the new protected levy law.
“A lot of schools are in the same boat, even if they got there in different ways,” Miller said.
There’s no consensus yet on what the fix needs to be. State Sen. Randy Head, R-Logansport, has proposed creating a grant program, administered by the state Department of Education, that would help hard-hit schools replace revenue lost by the property tax caps.
Other proposed legislation would give schools more flexibility in paying off debts by easing some of the restrictions imposed by the new protected levy law. Some school officials, meanwhile, are asking legislators to create another local-option income tax to funnel more money directly to school districts.
Rep. Todd Huston, R-Fishers, has a bill that would give more flexibility to school corporations to deal with the impact of the loss of revenue from the tax caps. Among other things, his bill would delay implementation of the protected tax levy law for three years and it would differentiate between debt incurred before and after the tax caps went into effect. Doing the latter could put more money back into school transportation funds.