MUNSTER | Munster school superintendent Jeff Hendrix said reduced tax collections in December shorted the district about $2.22 million of the money it expected to receive, and it's going to mean some staff cuts.
That's in addition to the $8 million deficit the district has been struggling with for the past few years.
When the Munster school board met Monday, board officials said they are now faced with making reductions in staffing. Hendrix said those reductions will begin with the non-certified staff members.
"I worked with my administrative team from the central office and the building level to identify where we could make reductions without having a major impact upon the classroom," he said. "We do concede that any reduction of personnel will have an impact on our school corporation. We are all very saddened about having to reduce our staff members.
"As you know, our certified staff members are under contract, and we must follow state law/timelines for notification if we reduce any of those positions. That timeline is not activated until May 1," Hendrix said.
The tax collection problem occurred Dec. 30 when the district received its final property tax disbursement for 2014. Historically, the school town has a collection rate of 96 percent to 98 percent, even with corrections and refunds, Hendrix said.
However, Hendrix said a number of people appealed their property taxes and Lake County settled those appeals, some dating back nearly 10 years. There were also residents and businesses that didn't pay taxes at all. That caused the district to collect about 44 percent of the taxes it would normally receive creating a shortage of $2.22 million.
"This was done with no warning from Lake County," he said. "The same impact occurred across all municipal bodies in Munster, as well as other cities and towns in the county. With our significant deficit and tight cash flow, a shortage of nearly $2.229 million was catastrophic for our district, rendering us unable to meet all of our obligations.
"In our effort to meet our obligations, we reached out to the community for help. We are fortunate and grateful that American Community Bank of Indiana and the Munster Civic Foundation were able to issue a rapid, emergency loan allowing us to pay a $1.76 million bond that was due Jan. 5," Hendrix said.
"We will repay those entities when we receive an advance on our referendum levy in February," he said.
The School Town of Munster passed a general fund referendum in May 2013, generating $21 million over the next seven years. Hendrix previously said that keeps the district from going further in debt.
Hendrix, who became superintendent July 1, has said the root of the problem is the school funding formula. He, along with several local superintendents and others around the state, say that high-performing districts like Munster receive less than the state average of about $5,800 per pupil.
School districts get a basic amount called the foundation base. Added to that is a complexity index, which is based on the percentage of students receiving free and reduced-cost lunch.
School districts like Munster don't have a large number of students on free and reduced-cost lunch, and therefore don't receive as much money for the complexity index.
Hendrix said the legislature has to increase the foundation base to help high-performing districts.