Clark-Pleasant schools in Johnson County takes proposal to state tax court

Clark-Pleasant is asking a judge to send a $60 million building proposal back to a state official and order that it be approved.

School leaders contend the official had no justification or support for denying the project.

The school district is asking the judge of the Indiana Tax Court to consider this: If the district has to start over in coming up with a building plan, construction costs will increase and building projects will cost even more, resulting in a higher tax rate.

Clark-Pleasant Community School Corp. has proposed building a new middle school, converting the existing middle school to a ninth-grade center and renovating the high school.

Indiana Department of Local Government Finance Commissioner Cheryl Musgrave nixed the proposal in April. This week she declined to reverse her decision.

The filing with the tax court accuses Musgrave of penalizing the school district for maintaining its buildings to keep up with enrollment growth, which resulted in a high tax rate.

The school district also said that Musgrave's concern over the district's high property tax rate was a "manufactured reason" for denying the project.

She shouldn't have compared Clark-Pleasant's school property tax rate to other Johnson County schools in weighing whether to approve the project, the district said. Such a comparison is incomplete, misleading and a distortion of the facts, Clark-Pleasant said.

The filing also says that Musgrave's scolding of school officials' explanation of how much the proposed school project will truly cost taxpayers is outlandish.

"Clark-Pleasant currently has a high total tax rate; thus, maintaining the current tax rate and arguing that it has a minimal impact on taxpayers is not persuasive," Musgrave said in her denial.

Musgrave's argument is impossible to apply to building projects, the school district said.

"Of course, under this Draconian standard, no new project could ever be approved, as all projects either raise the tax rate or prevent it from going lower," the school district said.

The district also takes issue with Musgrave's criticism of school officials for not meeting with remonstrators who believe they have a better building plan that would reduce the number of empty rooms and the use of portable classrooms at all grade levels.

The disagreement does not lessen the urgency to build more classrooms and the fact that the remonstrators' plan might have limited merit says nothing about the plan Musgrave denied, the school district said.

Also, meeting with the remonstrators would not be a requirement under law for the school district.

At the same time, the school district is asking Musgrave to reconsider her denial for the second time.

She said she could overturn her decision only if a legal error is uncovered.

When school districts want to construct buildings, the local school board must approve the plan and the public must be able to participate in hearings on the project.

At the state level, a nine-member school property tax control board reviews the project and votes on whether to recommend the project to Musgrave, who has the final say.

In Clark-Pleasant's proposal to build a $54 million middle school and renovate other schools for $6 million, the property tax control board voted 5-4 to pass it along to Musgrave. Musgrave denied the project, citing the cost to taxpayers, already high property taxes and a slowdown in enrollment growth and the housing market.

The school board, after reconvening a task force for one night, revised the building plans. The proposal now eliminates the $6 million in renovations to the existing high school and middle school and only calls for a $50.8 million middle school that is smaller in size.

However, any revisions to the original plan will be added in the following year, Superintendent J.T. Coopman said.

Clark-Pleasant's main argument is that the state school property tax control board had approved the project and that the school district met all the requirements of the law in proposing the building project.

The school district contends the commissioner denied the project arbitrarily and without justification.

The appeal, called a request for judicial review, was filed Wednesday in the Indiana Tax Court. The judge will determine if Musgrave reviewed the case properly and made the decision following the law.

Here's where she erred, the court filing said:

Musgrave denied the project despite approval from the school property tax control board in November.

She denied the project despite evidence that the school district would need extra building space with growing enrollment. Musgrave didn't say why the current school facilities were suitable to house the school district's students now and in the future given a predicted influx of students.

Musgrave avoided state code that allows her to accept, reject or accept in part and reject in part any recommendation by the school property tax control board. She could have approved parts of the project.

The state did not take into consideration the current and proposed square footage per student of the school building, which is a legal guideline the state must consider when approving government building projects.

Even though enrollment growth in the district has dropped from about 500 students a year to about 350 to 400 students a year, the state found no evidence that enrollment would stop growing.

"While 130 less new students per year might be helpful in some respects, this fact will not alleviate the continued need for portable classrooms, an untenable situation that no responsible state official could advocate," the district said in its filing.

The state appeared to penalize the school district for renovating and using its existing facilities to deal with enrollment growth, which increased the tax rate.

The school district's building plans were under state guidelines for project costs per square foot ($173) and construction cost per square foot ($154).

The state "inexplicably" concluded that the cost of the middle school was high compared to other middle school projects. However, the projects the state used for comparison were smaller in total square footage, which would make the total project costs less. Also, Clark-Pleasant's proposed middle school was the only one in comparison with the other projects that met the state's guidelines for total project cost per square footage.

One reason the state denied the project was because the school district had a high total tax rate, which is a "manufactured reason" for a denial.

The high tax rate can be traced to enrollment doubling from 1995 to 2006, and comparing the school district's tax rate to other county school districts is "incomplete, misleading and in many ways a clear distortion of the facts."

The state's only comparison criterion was assessed valuation in the Greenwood and Franklin school districts. The state ignored "pertinent" issues that would better compare county school districts such as growth rate of other districts, building projects in other districts and mix of residential and commercial property that contributes to property taxes.

The state "outlandishly" scolded school officials for their claim that the tax rate would stay the same with the $60 million project. The state said that maintaining a high tax rate with a tax-neutral project was not persuasive.

The state claims the concerns of taxpayers were not adequately addressed and noted the final $60 million plan was different from what a community task force recommended. Even though the final plan was different, school officials got approval from the task force to go ahead with its $60 million plan over the task force's $57 million plan.

School officials were not legally required to meet with remonstrators to find common ground on the proposal, as Musgrave had requested.