Debbie Blank and Diane Raver
April 29, 2008 10:36 am
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“It’s complicated,” said Mayor Rick Fledderman of the state’s overhauled property tax structure. Now that’s an understatement government, school and other leaders of agencies that rely on public dollars can agree with.
All seem to be taking a wait-and-see attitude about the reforms.
When asked whether the changes will positively affect Batesville’s finances, Fledderman said April 25, “That remains to be seen. That's why we're investigating this further. (Please see box at right.) ... From what I've seen, (budget money for) 2008 will be OK. In ’09 and ’10 we will be affected some. We'll get a little less, it looks like.”
The mayor said with the new House Enrolled Act 1001, budgets of “all the local taxing units can affect each other. If the school would do a major project, it could limit us.”
Fledderman’s gut feeling? “I don't really think it's going to have a major impact on us.” Until he learns more and until the city’s 2008 budget is approved, “spending is limited to essential items only. We're holding new hires at this point. We just have to watch it until we get a better handle about what's going on.”
Donald Dunbar, Ripley County Council president, believes the property tax changes will have a positive change on the county’s government, but remarks, “When you take something out, you have to get it (money) somewhere.”
He doesn’t feel that limiting government spending will affect county departments too adversely because “we approved a budget and that’s all they can spend.”
As a cushion, the county has a Rainy Day Fund that is drawing interest, he noted.
Donald “Butch” Williams, Franklin County Council president, reports, “All I know is what I have read in Farm World and the publication put out by the Association of Indiana Counties. Basically, Farm Bureau does not think the new changes are good.”
He explains, “I fear that after the sales tax has been raised to lower property taxes, after the state income tax has been raised to lower property tax, after the basic structure of county government as we have known it since the beginning of the State of Indiana has been changed, we will find that we are still short of funding for the things mandated by the state.”
Williams points out the state will pay for some expenses, such as child welfare, for which the counties previously were responsible. “Will the funds we have been using to pay those still be available? Probably not.”
By turns, the president is skeptical and optimistic. “In my two terms as a county councilman, I have never seen the state mandate something and then tell us how to pay it. So I have little faith that after different funds are taken away that we will have direction as to how to pay for what is left ....
“I guess time will tell” whether these property tax changes in favor of homeowners were a good idea, he says. “We must have faith that those in the position to make the decisions that will affect all of us in this great State of Indiana will have the same divine guidance as those who first wrote the Constitution for Indiana – a Constitution that has served us well for so long.”
School administrators also are concerned about how the changes will impact area families.
Kris Wilson, Sunman-Dearborn Community School Corp. business manager, says, “Property taxes were a stable income .... They weren’t tied to the economy .... Now the amount (of money) available could change.”
He explains state officials “will be taking over the (corporation’s) general fund portion, which is a significant fund,” making up 80 to 85 percent of the school system’s budget. However, the other four main funds – debt service, transportation, bus replacement and capital projects – “will continue to be on local tax bills.”
Regarding the new state-mandated referenda for substantial school projects, Wilson reveals, “I think you are going to have to have the approval of patrons in the school” system before moving forward with new projects.
However, he emphasizes the corporation already has a remonstrance procedure in place. “I feel that in the past, we have notified our public .... We’ve always had good public meetings and good public support.”
The business manager also discusses his understanding of the Rainy Day Fund. “At the state level, they are setting aside funds for school districts to use” if the expected revenues are not met.
Wilson stresses, “We want to provide a good education for our students .... We will continue to do the best we can with our money ... Every time we have change, it’s a concern.”
To get better insight, Batesville Community School Corp. superintendent Dr. Jim Roberts attended an Indiana Association of Public School Superintendents meeting April 23-24 to review the impact of the bill and will meet soon with state Sens. Robert Jackman and Johnny Nugent and state Reps. Cleo Duncan and Bob Bischoff.
“My initial impression is that we will be getting about the same dollars,” Roberts notes. “If we get less, then we will have to review our staffing situation, since the largest percentage of our budget is staff.”
The superintendent admits to being nervous about the state paying the remaining 15 percent of school operating costs that was previously on local property tax rolls. “The positive is that we do receive a state check each month. We have been receiving no county money on a regular basis for a long time. My anxiety regarding the state taking over the money is that the potential for balancing the state budget on the backs of public schools now exists. It is already common for our appropriated state money to get reduced.”
Roberts thinks the referendum process might be overkill on the part of legislators. According to him, “I think it is very appropriate for taxpayers/registered voters to have a say in whether or not a project gets completed. However, we already had this situation in place with the petition remonstrance process. I believe the referenda mandate will lead to inefficiencies (the time needed to prepare for a political campaign will be exorbitant) and increased costs” of projects that are stalled until voting takes place.
Even leaders of taxing units that get smaller amounts of money, such as fire departments and libraries, are wary. Mike Kruse, Batesville Memorial Public Library director, maintains, “Since the majority of our annual budget comes from property taxes, any major reduction would, of course, have a negative effect on the library, just as it would on any entity that relies on property taxes for income.”
How will the library get by there is less money coming in? “We have been good stewards of the funds we receive each year and haven’t been overspending in any area,” according to the director. “Depending on how much less we would receive, it is possible we may have to make cuts in services, programs, collections and open hours.”
Kruse comments, “While on the surface it’s easy to be enthused about lower property taxes, we have to keep in mind that all those services that rely on those property taxes will be affected.
“We have always provided the best materials, services and programs to our community that we could afford. We are determined that the future of the library in this community will continue to be strong and active in providing for the community’s needs.”
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