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Board member, superintendent doubt legislators' motives
TELL CITY - Indiana School Boards Association Executive Director Frank Bush said that for the first time in his memory, "legislators on both sides of the (political) aisle said they were lowering property taxes in order to get re-elected," Tell City-Troy Township School Board member Larry Bryant said Monday.
He made an identical statement at a regular school-board meeting May 13 and said he was concerned that some programs might have to be cut. He explained Monday that Bush made the comment at a recent ISBA regional meeting in Jasper.
Bryant said he's frustrated because no one can explain what legislation enacted this year will mean to school corporations.
Officials in numerous local-government positions are uncertain how much revenue they'll receive after the state general assembly enacted legislation in recent months that capped property taxes and raised the state sales tax. House Bill 1001 made numerous changes that will affect how much money schools statewide will receive, but what they mean in terms of actual dollars hasn't yet been determined.
"These are sharp, intelligent people," Bryant said of the legislators. "Why they don't have these numbers, I don't understand. If they were going to make changes of this magnitude, you'd think they'd do their homework first."
Rough projections show the changes will result in a $200 million deficit in Indiana schools alone, he said. Other entities, such as cities and counties, can implement local-option income taxes to make up for differences between property-tax revenues they used to receive and the increased sales taxes they will get.
"A school corporation has no mechanism to do that," Bryant said. He said at the board meeting gifted-and-talented programs are an example of those that might fall under a budget ax, but said Monday he was informed afterward they are required by law.
"But it is an unfunded mandate," he said. And about programs that may have to be cut, "We've got to be prepared. I think there will have to be some tough decisions made, not just in Tell City, but throughout the state. We don't even have an approved budget yet; no school does."
He's worried that any academic program that's not required under law or state standards might have to be cut, including "those that allow kids who excel to excel further. If it is those excellence programs," he said, "it will be a sad day in the whole state."
Adding to his frustration is the fact that no one can say when uncertainties will be cleared up, he added. "As a lay board person trying to stay on top of these issues, it's a very complicated issue in the first place. No one has checked the numbers to see what the effect will be (at the school-corporation level). They may have a really grand plan, but as yet we haven't seen it."
School-board member Tom Holm echoed Bryant's concern at the meeting and pointed out the current board wasn't seated through election.
"We will do what we need to do," he said. Noting that residents of the school corporation rarely attend the board meetings, he added, "we will make our own decisions in the absence of public input."
The current board is composed of appointed members, but as their terms expire, they'll be replaced by elected members as one result of November's election.
Bryant noted State Rep. Russ Stilwell voted against House Bill 1001. In a news release his office issued after the bill's mid-March passage, he said, "I do not feel that it answers our property-tax problems. In many cases it will add to our tax burdens rather than provide long-term reform."
The legislation's supporters would laud it "as many things, including the largest tax cut in Indiana history and even the long-awaited vehicle for stopping the continuous growth in local property taxes," Stilwell noted. "I do not agree with these claims. I voted against House Bill 1001 because I feel it doesn't provide long-term, substantial relief. In an election year, voting for this plan is the politically easy thing to do. However, I have to be honest and tell you that this plan doesn't solve our problems. In many ways, it makes them even worse, and that is why I voted no."
Foreseeing that probability, Stilwell said, "we were able to include changes in House Bill 1001 that provide some protections, but there is a very good chance that the increases in sales and income taxes will be greater than the savings in property taxes, particularly in most areas of southern Indiana."
He confessed he, too, is worried about capping the revenues going to local schools and units of government. "These will lead to cuts in school programs or reduced fire and police services."
Over the years," he pointed out, "there have been many programs touted as 'the answer' to Indiana's property-tax relief crisis. Every time, it turns out that legislators have to return a couple of years later and provide another 'answer.' "
Tell City-Troy Township Schools Superintendent Ron Etienne said Wednesday the legislation will require school corporations to continue paying utility bills out of their capital-projects funds. School systems were first permitted to do that seven or eight years ago as a way to relieve pressure on their general funds, and school administrators have come to depend on that ability. The state will take over general funds in approximately three years, Etienne explained, but forcing the utility payments to be paid from capital projects means the state isn't going to totally fund school systems, he pointed out.
Schools account for about 55 percent of property-tax bills, he said, and the changes will reduce the amount going into his school system's capital-projects fund from $1.2 million to about $900,000. If a building project is necessary and results in an $800,000 annual payment, for example, that would have to be paid first.
The law does permit a school corporation to initiate a referendum to let voters decide whether to take on the financial burden of such a project.
"I think (the legislators) were trying to force everyone to go to a referendum," he said.