The Herald Bulletin

Morning Update

State News

March 28, 2014

Schools get three-year reprieve on transportation cuts

INDIANAPOLIS — State lawmakers have given a temporary break to more than 90 Indiana school districts facing transportation funding cuts that threaten their bus service.

A measure signed into law last week by Gov. Mike Pence gives a three-year reprieve to districts expected to lose more than 10 percent of their property tax funds — some $112 million statewide — under a protected levy law passed in 2012.

That law's provisions take effect in July and come as schools are already struggling with funding losses from property tax caps that have reduced money coming into districts for transportation and capital maintenance, The Journal Gazette reported ( ).

The 2012 measure diverts money from school districts' transportation, bus replacement and capital funds to pay off debt.

A few Indiana school districts were set to lose all of the money in their transportation, bus replacement and capital funds because of that law, said Dennis Costerison, executive director of the Indiana Association of School Business Officials.

Many more districts would be affected because of school-construction debts and drops in communities' assessed value, he said. Reduced revenue as homeowners in the district hit 1 percent property tax caps will add to the problem.

Because the tax caps can't easily be changed since they are in the state constitution, lawmakers decided to instead give more than 90 districts three more years to brace for the funding cuts.

Costerison said that Northwest Allen County Schools would have lost nearly half of those property tax funds, but that loss is down to 14.2 percent, saving the district about $2 million under the measure.

Northwest Allen Superintendent Chris Himsel said that despite lawmakers' help "at some point we're not going to have enough to pay for transportation."

"This kicks the problem down the road two to three or four years. We need some long-term relief," Himsel told The Journal Gazette.

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