MOUNT VERNON — Unless Mount Vernon voters adopt a funding referendum that could boost the community's school tax rate by up to 25.1 cents per $100 assessment on May 4, the public school system here will have to cut a fourth of its budget over the next few years, Superintendent Keith Spurgeon said Wednesday.
The consequences of that could include fewer elective courses and extracurricular activities, larger class sizes and the closing of a second elementary school, Spurgeon said.
Hedges Central Elementary School is slated to close after the current school year. That was part of $1.8 million in cuts that Mount Vernon school officials already have finalized.
But without the tax increase, the district likely will have to cut $3 million more in a short amount of time, Spurgeon said at a luncheon Wednesday with the Posey County Economic Development Partnership and the Southwest Indiana Chamber of Commerce.
"A perfect storm of funding problems" is facing Mount Vernon schools, Spurgeon told the gathering of 20 people at Alexandrian Public Library.
An additional cut of $3 million "will drastically change what the school district looks like," he said.
All Indiana public school districts have had to make cuts. Gov. Mitch Daniels in November ordered that K-12 funding, which consumes half of the state's budget, be sliced by $300 million.
Mount Vernon's funding woes go much deeper, Spurgeon said. The district consistently is losing students — 200 since 2005 — at a time when state officials have implemented a formula in which funding follows the student.
Most problematic, Spurgeon said, is the state's transition to an annual per-pupil funding base of $5,100. Mount Vernon's rate historically has been about $6,000.
Mount Vernon has a high total assessed valuation, and its school district has sought to pay its teachers with salaries that are competitive with those found in larger cities, Spurgeon has said.
But as of two years ago, assessed valuation is no longer a factor in funding. The general funds of Indiana school systems now come from the state and not from local property taxes.
Spurgeon said the district already has cut administrative pay and eliminated an administrative job, approved a teacher contract that cuts teacher pay, reduced energy use and travel costs and eliminated the district's expense to run an adult education program.
Additional cuts would be even more painful, Spurgeon said, although he could not say for certain what they would involve.
Raising the maximum class size to 36 students, cutting athletics and band programs, closing a second school, cutting all assistant administrators and reducing school nurses still would leave the district short of the approximately $3 million it would need to balance the books, Spurgeon said.
Mount Vernon school officials are pushing for passage of the referendum to protect student programs and staff.
About 92 percent of Mount Vernon's budget is spent on personnel, but "people equal programs," Spurgeon said. "You can't have one without the other."
The tax increase would last for seven years. Its maximum annual levy would be 25.1 cents per $100 assessed valuation.
At the maximum level, Mount Vernon's school tax rate was about 70 cents in 2009. A bump to 95 cents still would leave the district's rate below the state average and below the neighboring North Posey school system, Spurgeon said.
The two business groups that sponsored Wednesday's luncheon are not taking a stance on the referendum, which has drawn both support and opposition from Mount Vernon residents.
They did say the quality of local schools affects a community's ability to recruit and retain jobs.
"We feel it's very important for everyone to know the facts," said Bill Newman, president of the Posey County Economic Development Partnership.
Spurgeon fielded a question about whether merging Posey County's school districts would bring savings.
He answered that such a move might bring some administrative savings, but it likely would result in building closures. Differences in pay scales also would have to be reconciled.