School districts in three states neighboring Indiana — Illinois, Ohio, and Michigan — regularly ask voters for higher taxes and more revenues, often to fill critical holes in their budgets.
Indiana might join them. This year, five districts have referendums on their ballots. Even after state funding cuts and a cap on property tax collections kinked their revenue stream, district administrators say they’re having a hard time explaining the critical nature of these ballot issues to voters.
StateImpact spoke with David Dresslar, executive director of the Center for Excellence in Leadership in Learning, who offers insight into why districts are having such difficulty getting their message across:
Q: What are some of the problems small school districts have in gaining support for referendums?
A: Referendums, being new to the state, have kind of a built in disadvantage. It’s one of the only ways taxpayers can have a voice in their own taxes. And since it’s new, the culture of supporting schools through passing referendums is not established like it is in other states where referendums have been around for years. Because of that, taxpayers often take the attitude, “You mean I can vote no on taxes? Why would I do otherwise?” In fact, supporting schools can have a long term positive impact on their property values. So it’s a matter of having the school corporations communicate effectively in terms of the value of a positive result on the referendums.
Q: Will referendums solve long-term funding problems for small school districts?
A: The more assessed valuation in the school corporation, the lower the rate of increase that a referendums has to have to generate a significant in order to generate a significant amount of funding. So the bigger districts, especially districts where much of the tax revenue comes from business and industry, those referendums tend to pass — like in Hamilton Southeastern or recently in Perry Township in Marion County. Whereas referendums in smaller communities, and especially communities without significant businesses valuation, those referendums tend to fail because the amounts of increase tend to be larger. The result is for the rich to get richer and the poor to suffer more. Referendums do tend to widen the gap between one school district to another.
Q: Are there any particular property tax problems which are specific to small schools?
With property tax caps, especially in small districts, referendums tend to be a temporary solution. They can give temporary relief, but it is a structural problem for school corporations and also municipalities and other governmental units. These caps will continue to cut into revenues and revenues will continue to cause them to be able to offer less programming.
And so on one side it’s a good thing for taxpayers because property taxes are not seen a something they want to see increasing, but the result is school corporations and governmental units find that they have less and less revenue as cost continue to increase. It is a structural problem that Indiana will have to deal with down the road, but in the meantime, referendums seem to be the only viable option.
As a companion to this piece, we’re conducting a survey. Click here to vote in our interactive poll and feel free to leave comments. We want to hear your thoughts. Would you support a referendum in your area?