Pharos-Tribune

State News

January 22, 2014

Legislators scrambling for school bus solution

Some school districts to lose 20 percent of transport funding or more.

(Continued)

Reasons vary as to why some schools are impacted more than others.

Sen. Luke Kenley, R-Noblesville, the powerful Senate Appropriations chairman who backed the protected levy law as a way to protect bondholders, said some districts got themselves into this fix by overbuilding and taking on too much debt before the tax caps cut into their revenues. Other districts, he said, suffer from poor financial management.

Some state legislators looking for a solution for the problem said poor financial management isn’t the only reason for the districts’ woes. Schools confronting declining property values and a large share of residential taxpayers – who proportionately pay less in property taxes than business – also find themselves in a pinch.

State Sen. Carlin Yoder, R-Middlebury, whose district includes Goshen, points to a nearly 10 percent drop in assessed value of property in Elkhart County between 2010 and 2012. It resulted in almost $815 million less in taxes for local governments, libraries and schools.

There’s no consensus yet on what the fix needs to be. State Sen. Randy Head, R-Logansport, has proposed creating a grant program, administered by the state Department of Education, that would help hard-hit schools replace revenue lost by the property tax caps.

Other proposed legislation would give schools more flexibility in paying off debts by easing some of the restrictions imposed by the new protected levy law. Some school officials, meanwhile, are asking legislators to create another local-option income tax to funnel more money directly to school districts.

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