New restrictions on when school boards can ask voters to raise or renew property tax levies led a record 38 Indiana public school districts to place referendums totaling around $500 million on the November ballot.
Public school advocates anticipated anywhere from 45 to 100 districts would pursue referendums to pay for construction, safety or operating expenses this fall due to property tax reforms contained in Senate Enrolled Act 1.
The law, adopted last year, restricts how often school referendums can appear on the ballot to once every two years rather than twice a year.
Districts that declined to pursue additional levies this year won’t get another chance until November 2028.
The deadline to certify a referendum question for the coming election was Aug. 1.
What will appear on the ballot
Seventeen districts are asking voters to renew expiring levies early since they won’t be able to do so next year, according to Terry Spradlin, executive director of the Indiana School Boards Association, which is tracking school referendums.
Six of those districts have levies set to expire in 2027, while the remaining districts are seeking early renewals at adjusted rates, he said.
“Their current rate may not generate the same amount of levy dollars they have been receiving because of the impact of property tax controls,” Spradlin said.
The School City of Whiting is the sole district seeking a construction levy for a $39 million facilities project, though it is also pursuing an operating levy.
Meanwhile, the Wa-Nee Community School Corporation in Elkhart and Kosciusko counties is the sole district pursuing a school safety referendum.
All others are asking to adopt or renew levies for operating expenses like salaries, benefits and supplies.
Spradlin estimated only 10 or so districts are pursuing referendums for the first time — far fewer than expected.
Collectively, the operating levies would generate about $500 million in property tax revenue annually.
One district — the Eminence School Corporation in Martinsville south of Indianapolis — withdrew its referendum petition from the Indiana Department of Local Government Finance after the school board changed its mind.
Eminence isn’t the only district to decline to pursue a referendum in an election year dominated by backlash to property taxes.
Brownsburg Community School Corporations accepted an $800,000 one-time allocation of tax increment financing from its town council in May in lieu of a referendum.
In addition to the change in when and how referendums can be sought, the Indiana Coalition for Public Education estimates property tax changes contained in SEA 1 will cost public schools $744 million through 2028.
A majority of superintendents surveyed by the coalition last year reported they were considering staff cuts, deferred maintenance and referendums as a result of the law, with some districts already announcing layoffs this year.
“Most districts are reluctant to want to do a referendum because it’s a difficult message to taxpayers,” Spradlin said.
Still, he said a majority of the districts pursuing referendums this year are doing so to maintain the status quo rather than expand on it.
Lawmakers raised the minimum starting teacher salary from $40,000 to $45,000 last year. Meanwhile, Spradlin said the cost of utilities and benefits is outpacing inflation.
“Our expenses are going up while our revenues are not,” he said.
State funding
In related news, State Rep. Gregory Porter, the top-ranking Democrat on the House Ways & Means Committee, called on the State Board of Finance Monday to return $98 million from the state’s general fund to K-12 tuition support.
Porter cited the state’s growing general fund reserves, which reached just shy of $4 billion at the end of June, in his request that the board add a supplemental tuition distribution worth about $100 per student to its August agenda.
“Children are our future, a future Indiana’s not properly funding,” Porter said in statement Monday. “The administration took these dollars while a record number of schools hold referendums. Teachers are being laid off or leaving the profession as Indiana hits $4 billion in savings.”
“Our public schools are fighting to stay afloat,” he said. “They shouldn’t have to wait for the next budget to get relief. The Board has the authority to give that money back to our kids. It’s just a matter of will. I look forward to the Board’s August meeting.”
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