K-12 and Education Finance and Economy and Education & Workforce Development and Government & Economic Development

Indiana voters trending against schools in tax votes

November 7, 2009

Indiana taxpayers may not be in the mood to pay for bigger, better schools in tough economic times, but they're more willing to help school districts make ends meet in most cases.

That's what the results of a series of property-tax referendums on school issues held last week across the state seem to say, according to lawmakers and other experts.

"The message to the school corporations is you have to start living within your means just like every other Hoosier family has to," said state Sen. Mike Delph, R-Carmel.

Voters last Tuesday voted down three proposed school building projects. The one to win approval — in southern Indiana's Southwest Dubois district — was for renovations, not new construction. Eight of nine school construction projects were rejected in previous referendums this year.

Districts that asked for permission to raise property taxes beyond a new state-mandated 1-percent cap next year to meet operating costs fared better, with two out of three winning approval Tuesday.

"I think the public looks at that a little differently than they do bricks and mortar," said Dennis Costerison, executive director of the Indiana Association of School Business Officials.

Faced with the prospect of more crowded classrooms or eliminating bus routes, voters generally sided with school officials.

"No one likes property taxes, but at the same time if you want services then you need to come out and support those services," said Paul Kaiser, superintendent the Beech Grove school district in Indianapolis, where the potential loss of school transportation was a hot issue.

But voters in Indianapolis' rapidly growing Franklin Township, where taxpayers are already paying for several building projects in recent years, turned down a request to raise money for the general fund.

That leaves school officials there facing the prospect of trimming some $9 million in teaching positions and transportation costs out of next year's budget.

"We're going to lose 30 percent of the revenue in transportation," district Superintendent Walter Bourke said. "We're looking to cut bus routes and cut service."

Retired Indiana University economist Morton Marcus, who has studied the state's tax system for decades, said the referendums showed that voters tend to be influenced by short-term consequences and generally are unwilling to pay for schools they regard as "fancy."

Delph and Costerison agreed that voters tend to look with disfavor on major new projects such as auditoriums, swimming pools and gymnasiums.

But Marcus said voters often don't seem to grasp that taxes are a bill for government services.

"If people don't want to pay taxes, what we'll ultimately find out that they just won't get services," Marcus said.

Voters in the Hamilton Southeastern district — one of the state's fastest growing — this Tuesday will consider a referendum allowing higher property taxes to cover operating costs.

Costerison saw the troubled economy as the driving force behind last week's votes.

"This is not an anti-public school issue to me; this is an economic issue," he said. If the economy were stronger, school ballot measures might be more likely to pass, he said.

State Sen. Mike Young, R-Indianapolis, agreed.

"It's going to be tough to pass these things right now while we're in a recession. People are hurting," he said.

Although legislation allowing public referendums on school construction only passed in 2007, taxpayers have been able to challenge building projects through petition remonstrances since 1995, Costerison said.

But the change in law seemed to bring a change in mood. Under the old law, about half of the proposed building projects passed, but of 20 school project referendums held in the past two years, only six have been approved, Costerison said.

The concept of referendums to support school general funds goes back to property tax reforms under Gov. Otis Bowen in the early 1970s, though it's been little used, he said. Under the current law, voters can approve property tax cap waivers for seven years at a time before school officials must go back to the polls for fresh approval.
 

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