The Herald Bulletin

Morning Update

State News

January 25, 2014

Debt law forces schools to weigh bus service

INDIANAPOLIS — Several school districts across Indiana say they will stop offering bus service in three years unless a tax issue that will cost some up to 90 percent of their transportation funding is resolved.

A 2012 law that takes effect this year requires public school districts to apply property tax revenue to debt payments before other expenses. Many districts already struggling because of statewide property tax caps say they won't have any money left after they make debt payments.

The Indianapolis Business Journal reports that nearly 60 school corporations across Indiana will lose at least 20 percent of their tax revenue, and five will lose 90 percent.

Two bills introduced in the Legislature aim to address the problem by reverting to the old approach.

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