INDIANAPOLIS (AP) - School districts across Indiana have begun notifying the state Department of Education that they will stop offering bus service in three years unless a tax issue that will cost some up to 90 percent of their transportation funding is resolved.
A 2012 law that takes effect this year requires that public school districts apply their property tax revenue to debt payments before other expenses. In the past, districts could spread the money over several funds, including debt service, school pension debt, capital projects, transportation and bus replacement.
Many districts already strapped for cash because of statewide property tax caps say they won’t have any money left after they make debt payments.
Nearly 60 school corporations across Indiana will lose at least 20 percent of their tax revenue, and five will lose 90 percent, the Indianapolis Business Journal reported (https://bit.ly/1cVsFcA ).
State law requires districts to provide three years’ notice before ending transportation. Muncie schools, which will lose 90 percent of their transportation money, applied for a waiver from that requirement after voters rejected a referendum that would have funded buses. The Department of Education denied the request.
Denny Costerison, executive director of the Indiana Association of School Business Officials, said he doesn’t believe that cutting transportation and capital projects funds was the intent when lawmakers passed the protected levy law.
Two bills introduced in the Legislature aim to address the problem by reverting to the old approach.
“We’re trying to find a way to transition through this, to lessen the blow of protected taxes,” Costerison said.
Westfield Washington Schools and Beech Grove City School Corp., which also stand to lose 90 percent of their funding, have notified the state that they will end bus transportation in three years unless the situation is resolved.
Decatur Township schools could follow suit. The district’s board will ask voters in May to approve another $3.85 million a year to make up a multimillion-dollar budget shortfall. If the measure fails, Superintendent Matt Prusiecki said, the district “could join the other school districts across the state that must reduce or eliminate transportation.”
Chad Blacklock, chief financial officer for the 8,500-student Franklin Township district, said state tax caps wiped out $17 million of the district’s $44.3 million property tax levy in 2013.
The district eliminated its bus program during the 2011-2012 school year but reinstated it following outcry from parents. Now it is considering cutting classroom expenses to find the $4 million needed to keep buses running each year.
“We’ve got to find the money somehow,” Blacklock said. “Show me another business that loses 38.5 percent of its revenue in a single year and keeps its doors open. We don’t have a choice.”
Prusiecki said his district doesn’t have much room to cut after trimming spending by more than $12 million over the past three years.
Before the new law, the district made up a $650,000 transportation shortfall by tapping its general and “rainy day” funds. The new law will increase that gap to $2.2 million and leave just $250,000 to operate buses.
If the referendum fails, Prusiecki said, the school board might have to consider closing schools and cutting staff.
“Our past practice has been to make the budget work,” he said. “But after $12 million of cuts, there’s not much left we can do indirectly.”
Westfield Washington Superintendent Mark Keen said his district has lost nearly $7 million to tax caps and a steep drop in assessed valuation due to business closures.
“We’ve reduced expenses so many ways, but we have not touched classroom teachers yet,” Keen said. “Our job is to educate kids. To cut back on that to pay for transportation seems ludicrous.”
He said he hopes lawmakers will reverse course, noting that parking the buses could affect economic development.
“Who’s going to want to move to Westfield if we don’t transport kids to school?” Keen asked.
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Information from: Indianapolis Business Journal, https://www.ibj.com
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