“You have schools where somebody hasn’t managed money well in the past and now they’re in a jam,” Kenley said.
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.
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.
Kenley, meanwhile, said he’s confident that a temporary solution will be found during the short, legislative session that must wrap up by March 15. But he also expects legislators will return next year, during the longer budget session, to re-examine larger issues of school funding.
Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at firstname.lastname@example.org. Follow her on Twitter @Maureen.Hayden.
Local impact A state law, intended to force school corporations to pay off debt, set to go into effect July 1 will further reduce the amount of money Madison County area school districts can use to provide bus service. This table shows the original levy amount for transportation, how much of that money was taken out of the transportation levy by "circuit breaker" limitations on property taxes last year, and how much money will be taken out under the new law. Corporation Levy Previous Law New Law Total loss Alexandria $438,537 -$32,258 -$45,875 11% Anderson $5,300,060 -$1,577,427 -$3,069,863 58% Daleville $358,684 -$14,383 -$32,321 9% Elwood $507,822 -$152,477 -$444,044 87% Frankton-Lapel $1,367,516 -$229,739 -$723,835 53% Madison-Grant $687,468 -$2,438 -$3,862 1% Shenandoah $677,273 -$8,940 -$13,329 2% South Madison $1,685,491 -$260,834 -$913,257 54% Source: Indiana Legislative Services Agency