Indiana in-depth: Trying to sell taxpayers on a referendum for their schools

Under Indiana law, which changed in 2008, construction projects costing more than $10 million are subject to a referendum process.

Asking taxpayers for more money is never an easy task, but in recent years, both general fund and capital projects referendums have been passing more frequently, says Larry DeBoer, an expert in Indiana tax policy who has studied trends in school referendums.

In the last November general election, nine of 10 school referendums passed in Indiana, to finance both buildings and budgets.

But the results also indicate experience seems to count. Nine of the districts had tried before, and four had won before.

Districts have learned “you’ve got to prepare the way, make the case and find out what people object to,” DeBoer said. “What people have learned is you have to run this like a campaign.”

Many districts hire outside consultants to assist with community relations and public outreach.

Districts must be “totally up front with all the information, lay out the data and create a convincing case for why it’s needed,” DeBoer said. “If a school is falling apart, open it up, invite citizens in and say, look at this.”

New Albany-Floyd County Schools in Southern Indiana learned from experience. In May 2015, an $80 million building referendum failed, but 18 months later, an $87 million revised proposal passed.

The district hired an outside consultant, the Winston/Terrell Group; community leaders formed a pro-referendum political action committee; and hundreds of people got involved, said Brad Snyder, deputy superintendent.

“Community engagement was vastly different” the second time, Snyder said. “It was a Herculean effort.” Also, the district included a high school and two middle school projects the second time, which increased support.

Recently, Vigo schools Superintendent Danny Tanoos, several administrators and three school board members attended a seminar on referendums sponsored by the Indiana School Boards Association.

“We were gathering information about what the process entails and looking at all the steps we must go through,” Tanoos said.

Tanoos anticipates the Vigo County School Board soon will hire an outside consultant to help with public outreach as the district looks to a future referendum.

Vigo County schools are considering three options to meet building needs at Terre Haute’s three high schools: renovations and additions; renovation and significant reconstruction; and school replacement.

No decisions have been made and no costs have been presented. At this point, a major school board priority is to allow plenty of opportunity for public feedback, which will continue as the building program unfolds, Tanoos said.

APPROVALS TRENDING

Among those the Vigo County contingent heard from at the ISBA seminar was DeBoer, a Purdue University agricultural economics professor.

He describes November’s referendum results — in which nine out of 10 passed — as “a November surprise.” Typically, referendums conducted in May have been more successful. But the overall trend is that “the share of referendums that pass has been going up,” he said.

Since November 2008, there have been 148 referendums. Of that total, 84 were for operating costs [general fund tax increase], with 52 passing, or 62 percent; 64 were for buildings, with 33 passing, or 52 percent.

Before May 2012, 42.3 percent of referendums passed; since then, 71 percent have passed.

The trend holds true even when construction referendums are looked at separately. Before May 2012, there were 37 capital projects referendums and 14 passed, or 38 percent. In May 2012 and after there were 27 capital projects referendums, and 19 passed, or 70 percent.

The reasons for referendums passing more frequently “is up in the air,” DeBoer said. “It might be the recession ended and people felt they could afford an extra tax.”

The main reason, he believes, is that nine of the 10 districts had attempted referendums before, and four had won before. Two were renewing tax rates that had passed in 2010, so no new added tax was proposed.

Also, citizens may recognize property tax caps and low increases through the state funding formula have taken a toll, and districts need the revenue.

In addition, districts have learned to conduct more sophisticated campaigns to win public approval.

DeBoer also believes a kind of “self-selection” might be involved.

Those school organizations that have tried before, and/or won the referendum before, are more likely to succeed. “Maybe we have divided the state into those who think or know they can win and those who don’t think they can win,” DeBoer said. Those who think they can succeed go forward, while those who don’t think they can win, don’t ask.

TARGETED EFFORTS

One Indiana school district that has experienced success with referendums is Beech Grove City schools in southeast Marion County. “It takes constant outreach,” said Paul Kaiser, district superintendent. “You have to be engaged with every part of your community.”

The effort must begin as soon as a district knows it will conduct a referendum, Kaiser said. “You have to provide the data to show them and convince them education is worth the investment to continue the good school system you have in Terre Haute.”

It involves marketing the district and going door-to-door, he said. It’s an every day effort that involves making many presentations and attending community meetings and events.

“There are many voters who don’t have kids in school and you have to educate them,” he said.

A few years ago, the district instituted mandatory community service for high school students to graduate. While it wasn’t tied directly to a referendum, “It does help when you are trying to ask the community for support,” he said.

It also instituted a “Gold Card” program that allows those 60 and older to attend school events for free.

Those supporting the referendum identified 5,000 “high-frequency voters” and made contact with them by going to their homes and sending information. It also distributed 700 yard signs. “It took a lot of effort and time,” he said.

The district has 3,150 students, about 1,000 of them transfer students; the district actively markets for transfer students.

Beech Grove City Schools has been successful with all three referendums it has conducted. In 2009, it won approval of a 35-cent referendum for operating costs, which it renewed in 2015. It also won approval of a 15-cent construction referendum in 2015.

Snyder, of New Albany-Floyd County schools, said at a certain point in the process, district resources can’t be used to influence the ballot question. That is why community leaders formed a PAC, to lobby in favor of the project.

SIZING UP SUCCESS

According to the Indiana University Center for Evaluation & Education Policy, districts geographically similar to the Vigo County School Corp. tend to do well. Based on a National Center for Education Statistics definition, the Vigo County School Corp. is classified as a “city” locale, with others being suburb, town and rural.

Of the 15 construction referendums among similar so-called “city” school corporations, just three failed [20 percent] and 12 have passed [80 percent], according to Stephen Hiller, CEEP project associate. “Of the four locale types we use to classify Indiana’s school corporations, these ‘city’ construction referendums have been most successful historically,” he said.

May referendums have passed at greater rates than those in November, officials say. Since May 2010, 69 percent of all May referendums have passed, while 50 percent of November referendums have passed. Prior to the most-recent general election, the pass rate for November referendums was just 39 percent, DeBoer said.

Whether the “November surprise” signals a change in that trend remains to be seen.

DeBoer noted that referendums tend to succeed in very small districts, which he described as those with less than 1,000 students. Of 13 referendum by those smaller districts under 1,000 students, 12 have passed — and half with more than 70 percent of the vote.

He suggests those communities fear that if the referendum fails, the districts may have to “go out of business and merge,” causing the community to lose its identity. “It tells me people like their school corporations and want to keep that identity,” DeBoer said.