INDIANAPOLIS — Cash hungry schools may start selling ads on the sides of buses to make up millions of dollars lost because of property tax caps.
Legislation moving through the General Assembly would create a pilot program allowing a few districts to peddle the rights to place ads on buses. It would be the first step in what supporters envision as a statewide program making Indiana the latest state to allow schools to transform their yellow buses into rolling billboards.
“We don’t know yet how much money it will generate, but with the boat we’re in now, every little bit helps,” said Mike Shafer, chief financial officer for Zionsville Community Schools, which lost more than $500,000 in transportation funds last year due to property tax caps.
Zionsville administrators lobbied for the measure, and their district would be one of three in the pilot program. Other districts may soon follow.
“If it’s something a local community wants, I think the state should provide the option to do it,” said Rep. Todd Huston, R-Fishers, author of a larger school transportation bill that contains the advertising provision. “It’s not deemed as something that solves the larger problem, but it can be used as a complementary revenue source.”
Schools have been hit hard by the tax caps passed by voters in 2010. While the caps saved property owners $704 million on their tax bills last year, schools lost more than $245 million in funds they used to keep buses running and to pay for other big-ticket items.
Some in the Statehouse question the wisdom of making up that money by selling space on buses.
“I’m sure it’s well intended,” said Senate Minority Leader Tim Lanane, D-Anderson. “But it does raise the larger question of what’s going on here when we can’t properly fund our school transportation systems.”
School officials in Muncie, in Lanane’s district, asked the Indiana Department of Education last year for permission to end bus transportation when voters turned down a tax referendum to help pay for their buses. The state has denied the district’s request.
“It’s not good public policy to say transporting students to schools is optional,” Lanane said. “We need to find a solution other than having schools have to rely on selling advertising to keep their buses running.”
In Greater Clark County Schools, property tax caps have impacted its capital projects fund, which includes money for transportation and bus replacement.
Dealing with the loss of revenue, Andrew Melin, superintendent, said allowing advertisements on buses might work as a money generator.
“I think that in this day and age when we have to be innovative in terms of funding, especially in our transportation area, where across the board our state hasn’t had sufficient funds to provide the transportation money we'd like, we have to open to ideas,” Melin said. “Without knowing the details or specifics, I think we’d have some interest in looking into that kind of pilot.”
But he said that doesn’t mean a no-holds-barred approach to who tries to sell a product by using school buses to spread their message. Melin said it would be best if districts were selective in what companies bought advertising on buses their children would ride.
“I guess as long as the advertisements that are on buses are community focused and there to promote the community in a positive way, as well as taxpayers knowing that’s a way for us to generate revenue instead of asking for a referendum to increase their property taxes, I hope they’'d appreciate we’re trying to find alternative ways,” Melin said. “If we don’t do that, if we don’t find alternative ways to fund transportation, the two alternatives are we won’t be able to provide the same level of transportation service to families or we’d have to ask for some level of property tax increase. I believe the positives outweigh the negatives.”
During a recent hearing, lawmakers questioned whether the school bus advertisements will distract and wondered how schools would decide who advertises. The bill restricts ads that promote alcohol, tobacco and other products forbidden to minors. It also bans political advertising and limits the ads to the outside walls of buses.
And it requires the State School Bus Committee — which usually deals with safety — to set advertising rules for schools.
Money from the ads would have to go into districts’ transportation funds.
Zionsville officials say they have experience with advertising. The outfield fence around their baseball field is covered with advertising from banks, Realtors and other businesses. Yearbooks and programs for school events also carry ads from sponsors.
Shafer said schools also know how to censor inappropriate images, as well, having experience with dress codes that ban offensive messaging.
“We certainly wouldn’t allow things on our school buses that we wouldn’t allow inside our schools,” he said.
Since Colorado first allowed school bus advertising in 1993, 10 other states have followed. The revenue is typically a fraction of overall transportation costs: Colorado Springs schools, among the first in the country to sell ads on buses, generated only about $15,000 in advertising last year.
Safety concerns have caused some states to balk. In 2011, the National Association of State Directors of Pupil Transportation Services came out against advertising on buses, noting the potential to distract passing motorists. But the association recognized the need for schools to find sources of revenue, so it set guidelines on school bus advertising that include limits on size and location.
Dennis Costerison, head of the Indiana Association of School Business Officials, said districts have pushed legislators in the past for permission to sell ads on their buses, getting nowhere. This time is different.
“We have schools losing millions from their transportation funds,” Costerison said. “They need to do something to keep their buses running.”
Staff writer Jerod Clapp contributed to this report.
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