QUOTE
A $1.4M Shortfall For MCAS?
Deborah Sederberg
The News-Dispatch
Tuesday, January 29, 2008
MICHIGAN CITY - Indiana's circuit breaker law, which seeks to reduce property taxes, could leave students in Indiana's neediest school corporations in the dark.
If legislation capping property taxes moves ahead, it could cost Michigan City Area Schools $1.4 million in 2009. Michael Harding, MCAS superintendent, believes local students deserve better.
That's why Harding joined State Sen. Jim Arnold, D-La Porte, State Sen. John Broden, D-South Bend, and other state senators from Lake, St. Joseph and La Porte counties and other school administrators on Monday for a news conference in Indianapolis.
Broden said Monday morning he would introduce an amendment to Senate Bill 12 "that would protect schools from dramatic funding cuts possible under proposed property tax circuit breakers."
"My colleague, Senator Broden, proposed an amendment today that would have assured schools that their funding would be covered through the state general fund," Arnold said Tuesday afternoon. In an agreement with other legislators, Broden agreed to withdraw the matter, leaving it to be handled under House Bill 1001.
"I am particularly disturbed about the shortfall of funding for the Michigan City school system," Arnold said. "I will be paying close attention and will play a visible part in making sure that the funding is replaced."
The circuit breaker, which became law in 2006, is complicated legislation, but essentially, it is a property tax cap. According to the law, taxes on a homeowner's primary residence could never exceed 1 percent of the home's assessed value. Rental property would be taxed at a maximum 2 percent rate and agricultural land at no more than 3 percent.
The cap is strictly a percentage. Tax bills could rise as assessed valuation rises.
The cap would take $600 million from local government and schools, it is estimated.
While no hard numbers have been assigned to the losses to individual school districts, Vince Taylor, business manager for the La Porte Community Schools, said accounting firms have been busy crunching the cuts with the assessed valuations and coming up with their best predictions.
Harding said urban schools will be hit especially hard. For now, it looks as if MCAS could lose about $1.4 million in 2009 and more in 2010. Hammond schools could lose $13 million in 2009, Indianapolis schools $14 million, South Bend $6.84 million and Gary Schools $8.2 million. "The 10 school districts with the highest poverty rates (and that includes Michigan City) stand to lose 10 times more than the 10 school districts with the least poverty," he said.
As the state raises standards for academic achievement, it reduces resources, Harding added. "Education needs to be looked at as an investment rather than a liability."
If the circuit breaker goes ahead unchecked, programs and classrooms will be darkened.
"We've got to do better," Harding said.
According to the numbers from the accounting firms, Taylor said La Porte "won't be too badly hit." The estimate is that La Porte will lose about $100,000 in 2009.
Both Taylor and Theo Boone, business manager for MCAS, say legislators are still trying to make some changes. One is that the state would take over responsibility for every school district's general fund and transportation fund.
"The state would be 100 percent responsible for those funds," Boone said. The state already pays about 85 percent of those funds.
The idea is to take the burden completely off the shoulders of property owners. The state then would pay its share from income tax and sales tax and, Boone said, some legislators are considering raising sales tax.
"It's really all up in the air," Boone said. "We have to wait to see how they handle it in Indianapolis."
Contact Deborah Sederberg at dsederberg@ thenewsdispatch.com.
Deborah Sederberg
The News-Dispatch
Tuesday, January 29, 2008
MICHIGAN CITY - Indiana's circuit breaker law, which seeks to reduce property taxes, could leave students in Indiana's neediest school corporations in the dark.
If legislation capping property taxes moves ahead, it could cost Michigan City Area Schools $1.4 million in 2009. Michael Harding, MCAS superintendent, believes local students deserve better.
That's why Harding joined State Sen. Jim Arnold, D-La Porte, State Sen. John Broden, D-South Bend, and other state senators from Lake, St. Joseph and La Porte counties and other school administrators on Monday for a news conference in Indianapolis.
Broden said Monday morning he would introduce an amendment to Senate Bill 12 "that would protect schools from dramatic funding cuts possible under proposed property tax circuit breakers."
"My colleague, Senator Broden, proposed an amendment today that would have assured schools that their funding would be covered through the state general fund," Arnold said Tuesday afternoon. In an agreement with other legislators, Broden agreed to withdraw the matter, leaving it to be handled under House Bill 1001.
"I am particularly disturbed about the shortfall of funding for the Michigan City school system," Arnold said. "I will be paying close attention and will play a visible part in making sure that the funding is replaced."
The circuit breaker, which became law in 2006, is complicated legislation, but essentially, it is a property tax cap. According to the law, taxes on a homeowner's primary residence could never exceed 1 percent of the home's assessed value. Rental property would be taxed at a maximum 2 percent rate and agricultural land at no more than 3 percent.
The cap is strictly a percentage. Tax bills could rise as assessed valuation rises.
The cap would take $600 million from local government and schools, it is estimated.
While no hard numbers have been assigned to the losses to individual school districts, Vince Taylor, business manager for the La Porte Community Schools, said accounting firms have been busy crunching the cuts with the assessed valuations and coming up with their best predictions.
Harding said urban schools will be hit especially hard. For now, it looks as if MCAS could lose about $1.4 million in 2009 and more in 2010. Hammond schools could lose $13 million in 2009, Indianapolis schools $14 million, South Bend $6.84 million and Gary Schools $8.2 million. "The 10 school districts with the highest poverty rates (and that includes Michigan City) stand to lose 10 times more than the 10 school districts with the least poverty," he said.
As the state raises standards for academic achievement, it reduces resources, Harding added. "Education needs to be looked at as an investment rather than a liability."
If the circuit breaker goes ahead unchecked, programs and classrooms will be darkened.
"We've got to do better," Harding said.
According to the numbers from the accounting firms, Taylor said La Porte "won't be too badly hit." The estimate is that La Porte will lose about $100,000 in 2009.
Both Taylor and Theo Boone, business manager for MCAS, say legislators are still trying to make some changes. One is that the state would take over responsibility for every school district's general fund and transportation fund.
"The state would be 100 percent responsible for those funds," Boone said. The state already pays about 85 percent of those funds.
The idea is to take the burden completely off the shoulders of property owners. The state then would pay its share from income tax and sales tax and, Boone said, some legislators are considering raising sales tax.
"It's really all up in the air," Boone said. "We have to wait to see how they handle it in Indianapolis."
Contact Deborah Sederberg at dsederberg@ thenewsdispatch.com.