School officials see HB 1001 as ‘mixed blessing’
Some school officials believe Indiana legislators delivered a ‘mixed blessing’ when they passed House Bill 1001 in January.
The bill, designed to provide tax relief for Hoosiers by capping property taxes, shifted some funds received by school corporations from local taxing units to the state.
‘Our local property taxpayers were hit pretty heavily’ because of the lack of industry in that county, said Dr. Mark Eastridge, superintendent of the Crawford County Community School Corp.
He was one of three school superintendents to speak June 18 at the 15th annual Farm Bureau meeting held for the counties of Crawford, Harrison and Washington to discuss a school-related topic. This year’s topic was ‘How will the recently passed House Bill 1001 affect our school funding?’
Under the new formula, Eastridge anticipates property owners will see their local taxes reduced by about a third.
Eastridge said he understands why legislators believed they needed to do something to help with school funding because some school corporations were spending money on ‘extravagant’ buildings and football complexes.
Now that the new law is in effect (Tuesday was the start of new legislation), the public will be required to vote on school projects that exceed a certain amount of money.
‘I think we’ll have to wait and see how the tax rate comes into play,’ Eastridge said.
Katrina Hall, local government specialist with Indiana Farm Bureau, moderated the panel that also included Sam Gardner, interim superintendent at Lanesville Community School Corp., Dr. Phil Partenheimer, superintendent at North Harrison Community School Corp. and Carolyn Wallace, director of business operations, for South Harrison Community School Corp.
Hall called House Bill 1001 the ‘most comprehensive, most complicated’ tax reform bill since the former Gov. Otis (Doc) Bowen’s tax package of the 1970s. This year’s legislation calls for a 1-percent increase in the state’s sales tax, which, along with other money, will be dedicated to property tax relief.
‘I know schools are trying to sort out how this will affect them,’ she said. ‘It affects different units of government differently.’
Wallace concurred. She and other school officials had attended a state Dept. of Education meeting the week prior to the Tri-County Farm Bureau meeting.
‘There are still many, many unanswered questions,’ she said. ‘Everyone’s trying to sort things out.’
Wallace explained to the Farm Bureau members in attendance that, under House Bill 1001, the state takes over school corporations’ General Fund, which pays salaries, benefits, special education and preschool. There is a state formula that determines each school corporation’s General Fund.
‘What changes,’ Wallace said, ‘is the source of revenue where that money comes from.’
School corporations still retain their Transportation Fund, which is a ‘concern,’ she said, because of rising fuel costs.
Partenheimer said that public education is now tied in to the economy, which is ‘probably the biggest negative’ he and other school superintendents are worried about. He said 1999 was the last time the state had a surplus, ‘right before the recession of 2001.’
Another concern Partenheimer has is ‘open enrollments’ that allows children to attend schools outside of their school districts. ‘That’s going to put another burden on the local schools,’ he said.
Gardner, who stated he’s not a ‘school finance guru,’ predicted House Bill 1001 will reduce the amount of money school corporations have to borrow, therefore paying less interest.
But, because the new legislation is ‘a tax shift, not a tax decrease,’ there is a trade-off; schools will be competing for funding with services such as police protection. ‘Schools have to be one of those required services,’ he said.
Hall estimated that Crawford County schools will lose about 12 percent of its funds, while Salem schools will only see about a 4 to 5 percent decrease in funding.
‘Obviously, (Crawford County) is doing without,’ she said.
And while House Bill 1001 has some ‘good elements,’ she said that the state is ‘in a situation where things will have to be analyzed.’
State Rep. Paul Robertson, who attended the meeting, said some counties throughout his district, including Harrison and Clark, ‘did very well’ with the new tax plan; Floyd County did ‘OK’ while ‘some communities got hit hard.’
He admitted the bill included likes and dislikes.
‘Is it going to work?’ he asked. ‘I don’t know. The idea behind it is good.’
Future legislative sessions will probably rehash the bill, Robertson predicted.
‘When we passed this, we all knew it was a work in progress,’ he said. ‘We don’t know the full impact of it.’
Peter J. Schickel of Lanesville, who was surprised during the evening with a cake in honor of his 85th birthday, emceed the evening. Susan Eastridge sang the National Anthem, a task Schickel usually asks of State Rep. Dennie Oxley II; however, Oxley, who is running for lieutenant governor with gubernatorial candidate Jill Long Thompson, was unable to attend the meeting. Don Cook led the pledge to the flag, and Merwyn Fisher gave the invocation before the meal prepared by the members of Central Barren United Methodist Church.