Lawmakers seek changes in school petition-remonstrance and referendum thresholds

If enacted, House Bill 1043 would change the financial thresholds necessary to initiate the petition and remonstrance and referendum processes.

The bill passed through the House in a 95-2 vote on Feb. 20 and has now been referred to the Senate Committee on Appropriations.

Under the current law, school boards have the ability to approve projects up to $2 million without public approval.

Citizens can initiate the petition and remonstrance process, which is essentially a battle of collecting signatures, for projects ranging from $2 million to $10 million. Anything above $10 million requires a referendum vote.

The bill's author, Rep. Jeff Thompson, R-Lizton, said that instead of using uniform thresholds, he would like each district's individual financial situation to be taken into account.

"[HB 1043] would look at a community's assessed value," Thompson said. "A project based on dollar amounts impacts school districts that have more assessed value less than those with lower assessed value."

Co-author Rep. Ed Clere, R-New Albany, echoed Thompson's concerns, adding that moving away from the current "one-size-fits-all" model in order to reflect the situations of individual communities is a more appropriate system.

“Right now, it doesn’t matter whether a school district has billions in assessed value or if it has a small fraction of that," Clere said. "All schools are restrained to the same rules. [HB 1043] makes it so that the requirements are very responsive to the community.”

With HB 1043, a petition and remonstrance process could be initiated for projects that cost more than $10 million. The threshold, however, would be lower for districts in which the sum of 1 percent of the first $100 million of assessed value of property and 0.5 percent of any additional assessed value is less than $10 million.

Projects that cost more than $20 million would be subject to the referendum process. If 1 percent of a district's total assessed value of property is less than $20 million, the threshold would drop.

Though the bill would allow some political subdivisions such as school boards to approve more expensive projects, Thompson said most would actually see a decrease in the amount they are able to approve without public approval.

"More [thresholds] would go down below $2 million than now," Thompson said. "For the petition and remonstrance, you’ve got 847 thresholds that would go up and 1,538 that would go down. For referendums, one goes up for every three that go down.”

According to Thompson and Clere, the bill would benefit both school districts and taxpayers.

"A lot of it is being interpreted as hurting taxpayers, when it actually helps them in many ways," Clere said. "There's a lot of benefit in this bill for schools, but only with new and enhanced protections for taxpayers. Right now, if a project goes to a referendum, then it could go outside of the tax cap. If a school corporation can take on alone, it stays within the tax cap."

Clere added that the bill also promotes transparency, which would also benefit taxpayers.

“This bill also has language that would call for more transparency at the ballot box during a referendum," Clere said. "It requires that information on the tax impact on taxpayers be available in the ballot box. It’s in layman terms, so anybody at a polling location can make an informed decision on what they are voting on."

If a referendum fails, the law would require a two-year waiting period before a district could make another attempt.

Under the new law, Clere said Greater Clark's threshold would increase to the maximum of $10 million.

“It makes it easier for school corporations to do the projects they need to do while ensuring the taxpayers are protected," Clere said. "In Greater Clark, under the $10 million threshold for petition and remonstrance now, it’s difficult to construct a building.”

Other provisions in the bill stemmed from a situation involving Greater Clark.

After a failed referendum in 2015, Greater Clark Superintendent Andrew Melin decided to create a five-year plan that included the reconfiguration of three open concept buildings.

"The board approved the plan, but the financing of the plan had to be approved by the board each year," Melin said. "The goal was to tell the community about what we were thinking about and working hard to be as transparent as possible. In that plan, there were the stand-alone open concept building projects. No future project would be reliant on any of those."

Following complaints from taxpayers in the districts, the Indiana Department of Local Government Finance stepped in and denied the projects.

"That is the practice that superintendents have been utilizing for years," Melin said. "The difference here is that we released our five-year plan, and that came back to hurt us."

Clere said that Greater Clark could have approved each project individually had they not released the five-year plan, since none of them exceeded $2 million.

"They had an opportunity to do each of those projects without announcing it to the community," Clere said. "If they had approved them one at a time, they could’ve done the projects. That’s much less transparent, and much less taxpayer friendly."

To address this, the bill would allow schools to take on multiple projects at once as long as they are separate.

"This language allows them to talk about multiple projects that stand alone," Clere said. "It’s good for everybody. It could also allow for savings when it comes to planning. I respect the DLGF's decision, but I also understand what Dr. Melin was trying to do. It was not only in the interest of the schools, but in the interest of the taxpayers. It’s really important for the taxpayers to be aware of what a school corporation wants to do."

Melin, who has faced opposition during Greater Clark's ongoing petition and remonstrance process, said that if the legislation passes, he will strive to keep the interests of the taxpayers in mind when making recommendations regarding building projects.

"I think it’s unfortunate that some people feel that we are not sensitive to taxpayers," Melin said. "I think that has been a key factor in all the decisions we’ve made since I’ve become superintendent. We'll be continually communicating what we are doing with our projects. We will really work hard at managing the projects so that our taxpayers are not treated unfairly.”

Though Melin acknowledged that some people may feel like the ability to make their voices heard would be taken away if HB 1043 passes, he pointed out one avenue through which citizens will always have a say at Greater Clark.

"People need to keep in mind that the board is made up of elected officials," Melin said. "If they feel those officials aren’t doing their job effectively, they have the right to elect new officials. Some people feel there’s no accountability under this new legislation. I report to the board in my role as superintendent, so there is accountability. The school board hires me. They evaluate me. If I’m not doing a good job managing the district, the board can decide to no longer have me as superintendent."