Estimates delay circuit breaker's impact
2009-02-02

New estimates on the impact of recent property tax reforms on local school districts show some relief for one more year, but major funding cuts could still hit schools in 2011.

Figures released by the Indiana Legislative Services Agency show Madison County’s five public school districts losing a total of $1.9 million in 2010 from so-called circuit breaker tax caps. That’s compared to estimates put out last March showing the districts losing more than $4.6 million.

For Elwood Community Schools the new estimated loss of $273,776 in 2010 is about a third of the amount of earlier predictions.

But the first estimates from the state looking ahead to 2011 show Elwood schools losing close to $1 million and Madison County schools losing $6.4 million as a whole that year.

Elwood schools Superintendent Tom Austin said the latest numbers contained some good news, but he worried any funding cuts will compound difficulties brought by job losses and declining property values. Austin didn’t want to comment on what actions the school district might be forced to take to compensate for the shortfalls.

“It’s early in the process,” he said. “We’ll just have to continue to watch the numbers as they continue to come out.”

South Madison schools will likely have to delay construction projects in order to make up the tax loss, Superintendent Thomas Warmke said.

The new figures did not relieve Warmke’s concern that less tax revenue will only force school districts to borrow money for capital projects, raising expenses in the long term.

In 2008, Indiana lawmakers approved a property tax system that limited an owner’s bill to a certain percentage of a property’s assessed value and lessened the tax draws going to schools and other government units.

Anderson Community Schools had estimated its 2010 shortfall at $2 million. The new estimate of $1.4 million shouldn’t be hailed as great news, ACS Business Manager Kevin Brown said.

“I’m not quick to jump all over that number, because it’s been changed so many times, it could go up again,” Brown said.

In 2011, ACS still gets “hammered and hammered badly” with an estimated revenue loss of $4.9 million, he said.

The district had been working under the assumption that its 2011 cut would be similar or only slightly more than 2010, Brown said, not more than $3 million extra.

“It’s just more bad news,” Brown said. “It’s almost as each day comes we get another boat load of bad news.”

Anderson and other school districts around the state are sharing a $120 million state relief grant that will offset some loses in 2009 and 2010. Over two years, Madison County schools are expected to received more than $7 million from the relief fund.