Indiana

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Indiana School Districts Still Feeling The Pain Of Property Tax Caps

When Franklin Township lost $16 million due to property tax caps two years ago, it gave parents two options: Pay a fee for students to ride the bus, or drive kids to school. The Indiana General Assembly later outlawed the bus fees.

Property tax caps continue to weigh heavily on Indiana schools, reports Megan Erbacher for the Evansville Courier & Press:

Property tax caps will cost the Evansville Vanderburgh School Corp. $6 million this year.

That was the message that EVSC Superintendent David Smith told school board members Monday night the district’s auditor delivered last week. The loss represents an increase of 145 percent compared to last year.

For EVSC, Smith said the property tax cap impacts the capital projects plan with a loss of $3.2 million and the transportation operating fund which is cut $2.3 million.

“This simply means that projects and maintenance for 39 schools will be delayed,” he said.

It’s vital to find a way to eliminate the $2.3 million from the transportation fund, or Smith said those remaining expenditures will come from the general fund or Rainy Day Fund once the transportation fund has been exhausted.

We’ve written extensively about the impact of property tax caps on Indiana schools. For an explainer on how education is financed, check out Kyle’s video on school budgets.

One of the reasons Evansville Vanderburgh can’t easily cut from its transportation fund is what happened two years ago in Franklin Township. Facing a budget shortfall of $16 million, the district  offered parents the choice of paying for bus service or driving their kids to school. The controversy made the national news and led to the Indiana General Assembly passing a law outlawing busing fees.

Indiana school districts are now allowed to refinance their debt, but few have asked the Distressed Unit Assistance Board for help. Instead, many districts are making deep cuts or asking taxpayers to pass a property tax referendum outside the caps.

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