ANDERSON — The idea of a school system needing voter approval for additional funding is one that two Madison County school systems hope residents buy into.
The Anderson Community School Corporation district is asking voters to pass a 55-cent increase to the tax rate while voters in the Elwood Community School Corporation are being asked for a 50-cent increase.
A law passed in 2008 establishing the referenda changed the way schools receive additional money. Before voter referenda, there was a petition-and-remonstrance process for school construction projects. The former process only allowed voters to stop the funding for construction after a school corporation decided to start a project. The referenda method requires voters to approve a school’s request for additional money or to raise property taxes beyond established tax caps.
Since the law’s passing, voters have approved only 43 percent of all school funding referenda, according to a study by Indiana University’s Center for Evaluation and Education Policy, or CEEP. There have been 42 referenda votes since the law passed with 18 passing and 24 failing.
In 2008, 80 percent of the referenda proposed passed; in 2009, only 28.6 percent passed, with a total of 21 placed on ballots throughout the state; and so far this year, 50 percent have passed. There are 13 school systems who have a referendum on the November ballot. Statewide, 16 were voted on in May, with eight of them passing.
Frank Bush, executive director of the Indiana School Boards Association, expects that Indiana voters will start seeing more and more of these referenda on the budget, and not just from schools but from the city in the form of local option income taxes to help funds things like police and fire agencies.
“This is a revenue source for schools to be able to offset the kinds of deficits they have with the lack of revenue on the state level,” Bush said. “These aren’t additional dollars for investment. They are seeking the funds for general fund operations.”
If the referenda are to be successful, schools need to start conducting campaigns that clearly lay out what the money is needed for and what the consequences will be if the funding isn’t approved, he said.
Sentiments from voters without school-aged children, who might think they shouldn’t have to pay the increase because it wouldn’t directly affect them, is nearsighted, Bush said.
“If voters decide to turn down a general fund referendum for a school, I can only assume the school board will be put in a position of enacting adjustments to programs, (laying off) staff and other means to live within the revenue they have. If the cuts are made, people will say, ‘We didn’t know it would be this bad if we voted no.’ It is the responsibility of every voter to be informed. And if they are informed and they still disagree, then that’s their option.”
Tax caps recently put in place by legislation do not apply to property tax increases approved by voters via referenda meaning the tax rate could be higher than the cap.
The CEEP study found that voters were more likely to approve a referendum the less it impacted their taxes. In addition to Indiana, there are 47 other states that either require or allow voters to request construction referenda, and many others have tax caps that are set and require referenda if schools want funding that would exceed those caps.
Schools are allowed to seek the money via a referendum for two reasons — because the corporation cannot carry on its mission and public education duty without the added revenue from an additional levy or if the corporation needs it to replace lost revenue from property tax caps, according to the legislation.
The additional tax levy can only be imposed for seven years and would take effect the calendar year following the referendum. If the referendum is voted down, the corporation must wait 12 months after it is defeated before the corporation can bring another forward, according to the law.
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