From: Glenn Ferry
Columbus
In the middle of election season, we’re also in the middle of a campaign to increase property taxes; complete with yard signs, phone canvassing, and a steady flow of pro-referendum Letters to the Editor. I heard school employees were encouraged to ask friends and neighbors to vote for the referendum tax hike, in return for raises. But I think we’re hearing only one side of the argument from the campaigners.
The school’s proposition is that a ‘yes’ vote will lead to happier teachers and smarter kids, and that’s the only option. The implication is that there is no other way to prioritize teacher compensation higher in the budgeting process.
That’s where the counter argument lies. It seems reasonable that the corporation could review the overall prioritization of essential services including teachers, students, and operations and come to a rational approach to funding the most important things. The community could maybe help assess priorities and provide thoughts into options. Maybe check into how Indiana’s top-rated school corporations are doing things. Some budget items would be trimmed down and others removed. There’s not enough to cover everything.
Think about your household. You choose where you spend money. You trim and make hard tradeoffs. You sell a car, drop a membership or increase insurance deductibles. It isn’t pinching pennies; it’s day-to-day reality.
The referendum is a tax rate of 0.1560 on net assessed property value; adding 7%-8% to your taxes; for a gross $150,000 assessed value add $102 more; for $300,000 add $253 more. We’re also paying the 2008 BCSC Construction Referendum which continues through 2028 for the high school renovations. With its published rate of 0.1322, it adds about 6%-7% to your property taxes. Combined through 2028, together these add 13%-15% above your property tax caps. Many are paying at their cap now.
Everyone would be impacted: homeowners, businesses, landlords, farmers. BCSC would likely renew the referendum in 2028. Would it become permanent?
In the Statehouse, Indiana tax reform specifically pushed less reliance on property taxes for school funding. Indiana sales tax was increased in 2008 to 7% to shift more revenue to the state, supporting its responsibility for school funding. State funding to BCSC was $74 million in 2019, $75 million in 2020, $78 million in 2021, and will exceed $88 million in 2028.
Tax reform also gave way to property tax caps being added to the state constitution in 2010 to protect against runaway property taxes. Homeowners capped at 1% of gross assessed value, rentals at 2%, businesses at 3%. However, voter-approved referendums are not restricted by the caps and those taxes are just added on.
There’s tremendous uncertainty now with coronavirus. People are losing paychecks, businesses being shuttered, and personal investments and 401k being gutted. Is it a good time now to commit to eight years of higher taxes?
In closing, the counter argument says that there could be higher prioritization for teachers in the current budgeting process. A tax hike referendum for teacher raises is not the way to go.
