Indiana schools appear to be in a "class" by themselves, when it comes to dealing with the pain of property tax relief.
The proposed property tax relief plan before Indiana lawmakers would reduce revenues to school districts statewide by $170-million.
While schools aren’t alone in feeling the pinch of property tax caps, they are unique in their inability to do anything about it.
As written, the bill allows just one way to recover money lost to property tax caps—by imposing a local income tax. Schools have never received proceeds from local income taxes.
There are only 38-school corporations in the state of Indiana that stand to lose a million or more dollars to the imposition of property tax caps.
The list includes the Elkhart Community Schools.
“Well the projection is that in 2010 we'd have a loss of about two million dollars, just a little bit in excess of two million,” said Elkhart Superintendent Mark Mow.
One of the biggest losers would be the South Bend Community Schools, where a loss of $9.5 million is projected.
The Penn Harris Madison schools would lose $2.6 million, while the Mishawaka schools would lose $2.2 million.
"Well the schools are in a very serious predicament, because they don't receive any monies from local option income tax dollars,” said Indiana State Senator John Broden, a Democrat from South Bend. “While we all want to provide significant property tax relief, we certainly do not want to do that at the expense of a quality education for our children,” Broden said.
It appears that the shortage would not impact day to day operations in the classroom. Another provision in the property tax reform plan would end the practice of using property tax monies to supplement the so-called general fund.
In this case, it appears any potential cuts would impact funds used to buy busses and repair buildings.
"Our capital projects fund typically is about an $8 million dollar fund, so potentially 25 percent capital projects and of course that's the fund we use to repair roofs, maintain buildings,” said Mow.
Senator Broden hopes that lawmakers will address the situation, perhaps as early as next week when a Senate committee considers amendments to the property tax reform plan.