MUNCIE — The demographics and tax base of Delaware County present local governments with one of the toughest fiscal environments in the whole state, a longtime expert in state and local government policy says.
That's apart from any local tax or budget decisions, such as school tax levy referenda, TIF districts and teacher benefits.
"It's easy to see why Muncie schools are in financial difficulty and are closing school buildings, with declining enrollment, declining state aid and lost (property tax) cap credit revenue," Larry Deboer, an agricultural economist at Purdue University, told The Star Press.
In 2008, the Muncie district received $36.3 million in state aid, and had a general fund tax levy of $15.96 million, or $52.3 million total. The next year the state eliminated the levy and state aid was $52.3 million. "No loss, but no gain either," DeBoer said. "Of course, inflation eroded the purchasing power of that money."
Since then, however, "state aid has declined a lot, to $43.3 million in 2015, which is the latest data I've got," DeBoer said. "That's 3.1 percent per year in nominal terms. Adjusting for inflation would make it more than 5 percent per year in real terms. That's a significant loss in state aid."
The main reason is the declining enrollment in the Muncie district. "They had 7,284 students in 2009, and 6,106 in 2015, a 16-percent loss in six years," he said. "Each lost student causes a full per-student decline in aid. That works against declining enrollment schools, mostly urban and rural, and in favor of growing suburban school districts."