Howard County schools impacted by Chrysler only paying a portion of its taxes

danielle.rush@kokomotribune.com

Northwestern School Corp. will lose about 30 percent of its budget in capital projects, transportation and debt service funds this year, after officials with Chrysler Group LLC announced the group will only pay a portion of the 2009 property tax owed by the former Chrysler LLC.

Kokomo-Center School Corp. also loses funding because of the lost revenue.

Northwestern Superintendent Ryan Snoddy said, with a loss of about $1.7 million among the three funds, he sees few options available.

He said the state Legislature is making a loan available through its rainy-day fund for the taxing districts affected by the loss of Chrysler's property tax payment.

"We're obligated to pay our debt service bills," Snoddy said. "We really need to continue with the [capital projects fund] projects we have. ... We really don't have much choice but to look at participating in the loan."

County officials estimate all the county's taxing districts will lose a combined $12.2 million in property taxes this year because of the Chrysler decision.

County Assessor Jamie Shepherd said Kokomo-Center could lose about $1.8 million for 2009.

Superintendent Christopher Himsel said that amount represents 10 to 15 percent of the budgets impacted.

"It's not nearly as significant as at Northwestern, but it is significant."

Himsel said no decision has yet been made about what to do about the loss in revenue.

"At this point in time, what we are doing is reviewing all our options," he said. "It is very likely we will be applying for the loans."

Snoddy, though, said the situation could have been much worse. Until 2009, property tax also supported Indiana schools' general funds, which are the largest funds, used to pay teacher salaries and benefits.

"That would be worse," Snoddy said. "We'd be in a world of trouble if property tax still supported the general fund."