Indiana

Education, From The Capitol To The Classroom

Map: What’s At Stake For Indiana School Districts In The Business Tax Debate

Data: Indiana Legislative Services Agency

This map shows how much each Indiana school district would lose if lawmakers were to eliminate the personal property tax — a tax on business equipment. The darker the school corporation’s shade, the bigger the projected hit of the tax’s elimination would be. The proposals General Assembly members are currently considering, however, would not eliminate the tax immediately or completely.

Indiana school districts collectively stand to lose an additional $150 million in local revenues if General Assembly members were to completely eliminate the state’s business personal property tax.

That said, none of the proposals state lawmakers are considering — including the one Indiana House members approved Thursday — are as complete or as immediate as cutting the state’s tax on business equipment altogether. The tax generates $1 billion in revenues annually for local governments and schools.

“I’m talking about tax reform, not tax cuts,” Gov. Mike Pence wrote in a letter to the state’s mayors sent Wednesday, saying he supports phasing out the tax “in a way that does not unduly burden local governments.”

Still, the projections from Indiana’s Legislative Services Agency illustrate the stakes of the debate, showing more than 130 school corporations would see their losses to Indiana’s property tax caps double if the business personal property tax were to go away entirely. (We explain how here.)

We put those numbers into map form above. The largest projected losses are in darker shades of blue. Click on your district to see how much property tax revenue the district would lose if lawmakers were to eliminate the business equipment tax completely.

We at StateImpact have spent a lot of time in the past two years talking about the impact of Indiana’s property tax caps, which themselves have allowed taxpayers to keep $245 million that school districts otherwise would’ve used to pay down debt and fund transportation or building repairs.

The caps’ impact has been less pronounced in rural areas of the state, in communities where property owners don’t have to pay taxes for multiple layers of city services.

But one thing the map shows clearly is how a total elimination of the business personal property tax — again, neither of the current proposals is that drastic — would impact even these rural areas, where losses to the property tax caps have been much less significant.

The Southwest School Corporation in Sullivan lost three percent of its property tax revenues in 2013, but it would lose more like 23 percent of its property tax revenues in 2015 if the business personal property tax went away.

“When they make major changes, I mean, that’s fine — but are they going to make up any of this money?” asks Southwest’s superintendent, Chris Stitzle. “That’s not really been addressed.”

(View the data powering the map above here.)

CORRECTION, Jan. 31, 11:15 a.m. Eastern: As originally posted, the map’s color scheme did not correctly reflect the data. The map’s settings have been changed and the map is now accurate. The numbers that appear when you click on a district, however, are correct — and were correct all along.

Comments

  • John Pigg

    At what point did the Democratic Party become the Party of fiscal responsibility. We cannot afford to continually starve our local government the taxes they need for roads and education.

    • indyscott

      Didn’t know that stealing money from the taxpayers to fund luxuries for government/education was considered fiscal responsibility. There is a difference between wants and needs but it is unfortunate that government and public education still can’t figure that out even after the tax caps have come into play.

      • Sam Martland

        Actually, the problem is that the republican party can’t figure out that there is a difference between wants and needs. Having bus drivers and aids have health insurance so they are less likely to make our kids sick is a need. Having small enough classes that struggling kids get help is a need. Having time to do something besides IStep drill is a need.

        Perhaps you’d like to list some of the luxuries you have in mind?

      • Sam Martland

        Indiana is one of only three states that charge parents for textbooks. I think textbooks are pretty much of a need, not a want, and I’m embarrassed and angy that the state doesn’t cover them. I see deferred maintenance in schools: having the toilets actually bolted to the floor and the urinals actually flush right is a need, not a want. http://www.theindychannel.com/news/education/are-you-kidding-me-textbook-fees-frustrate-parents

      • John Pigg

        I would be really interested to see your examples of luxuries. For the rest of the state excluding the five counties surrounding marion county… they are seeing their budgets strained to the breaking point.

        Schools are closing, School Buses are no longer affordable, not to mention long term investment.

        The funny thing is these schools and districts were sustainable before Daniels, and Pence’s tax proposals. I stand by my statement my friend, in Indiana the Democratic Party is actually the Party of fiscal responsibility.

  • Michael Starks

    The map’s color key is not consistent with the details you see when you click on a school district. The key indicates Zionsville would lose up to $1M. Click the district and it says Zionsville schools would lose up to $3.9M. Am I missing something?

    • kystokes

      Hi Michael, thanks for the comment and good catch. You’re right, there was a problem. I made an error in the map settings that made the colors appear incorrectly. The numbers that appear when you click on a district, however, are correct — and were correct all along. The map has been updated to reflect the correct color scheme. Apologies for the error.

  • indyscott

    Kyle,

    At what point are you going to research the amount schools inflate their budgets each year? We always hear from the union drones about the money lost but never hear the other side of how schools inflate their budgets to get what they really need.

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