"The Official Portrait of Miss InDiana"

"The Official Portrait of Miss InDiana"
aka "Miss Victory"

Thursday, February 7, 2008

The Howey Report: "There’s a revolution underway in Indiana and it’s about to hit the schools."

Indiana’s tax revolution coming to education

INDIANAPOLIS - I heard the news today, oh boy. Michigan City Schools could lose $1.4 million in 2009 if Gov. Mitch Daniels’ cap’n'cut tax reforms pass. Indianapolis schools could lose $14 million. South Bend could lose $6.84 million, Hammond $13 million, Gary $8.2 million. Wayne County schools could lose $1.2 million in 2010.

Centerville Supt. Phil Stevenson told the Richmond Palladium-Item, "It’s a killer.

Gov. Mitch Daniels with students in Terre Haute. One of his first acts as governor was to freeze school construction projects. Now his caps could revolutinize school funding. (HPI Photo by Brian A. Howey)It knocked the wind out of me. It’s just another blow for education."
And yet this plan passed the Indiana Senate. It voted 41-7 for Senate Joint Resolution 1 on the constitutional caps for property taxes. It voted 47-1 on SB12 on the circuit breakers. Similar legislation passed the Indiana House 93-1. So is the governor and the legislature sticking the shiv into public education?

What I didn’t understand is how public schools could be losing all this money when the House legislation, for instance, calls for the state to fund 100 percent of school operation and transportation costs. Currently, the state funds 85 percent and your local property taxes pay for the remaining 15 percent. If the state is paying 100 percent of the operational costs, how come we are hearing about teacher layoffs?

"The governor’s plan provides that the remainder of school operating and transportation costs are picked up by the state," said Daniels spokeswoman Jane Jankowski. "The figures the school corporations are discussing are the effects of the circuit breakers on remaining spending from property taxes once the plan is implemented. The latest Legislative Services Agency report on the Governor’s plan as introduced shows collectively that the impact to school corporations is about $153 million less statewide once the circuit breakers are fully implemented in 2010."
The shortfalls come in places like debt service and capital projects. Jankowski adds, "Even with that circuit breaker impact, schools will still have 7 percent more in 2010 than in 2007. The governor’s plan does not include an offset to the cap for schools. Limiting local government and school spending is one of his core plan elements. Or as he described it to the Association of Indiana Counties, taxpayers don’t need to be funding "exploding scoreboards and edgeless swimming pools."

"The plan includes the ability for schools to move money among funds, so school corporations will be able to use operating and transportation dollars to manage the circuit breaker," Jankowski explained. Budget Director Ryan Kitchell told HPI, "The governor has been pretty clear that what he wants to try and achieve is a tax cut. We want to take care of schools. We’re going to pay for all the school costs, the bus drivers, the fuel. One thing we think is real important is in all these different funds, you’re locked in. There might be $10 million in one fund and we wanted to reduce some of the barriers. There will be a lot more flexibility there. We think it will help them manage and not just squeeze."

Andrew Norris, policy analyst for Senate Republicans, explained, "School districts must continue to pay their debt service obligations, which means any loss in funding due to implementation of the circuit breakers will force school districts to make cuts to their capital projects fund. The superintendents do not want to see their ability to build new schools impaired by a lack of funding due to the circuit breakers. They are also not in favor of the governor’s plan to offset any losses by transferring monies from other funds, namely the operating and capital projects funds."

The Indiana State Teachers Association opposes the state assuming 100 percent of the general fund. It says that property taxes have been a stable funding source, economic forecasts are predicting an economic slowdown, and 950 schools have not made the Adequate Yearly Progress mandated by the Bush administration’s No Child Left Behind. "Demanding more of students while providing less instructional support is unfair, especially for students most in need of additional assistance," said ISTA Executive Director Warren Williams.

"School general fund property taxes are not the cause of the current property tax issues," said the ISTA’s Nathan Shnellenberger.

There are points where the ISTA appears to approach the governor’s perspective. It advocates separating school construction projects into "learning facility" and "auxiliary facility" components, and urges "local units of government to collaborate on the construction and use of auxiliary school and community facilities."

In my school district, taxpayers are paying for a $14 million swimming pool (it was originally proposed at $20 million) while there is a YMCA across the street that just went through major renovation. Daniels is asking school districts to start sharing football and basketball stadiums. He is urging districts to consolidate, as did the Kernan-Shepard Commission. There is legislation, for instance, that would pool school construction blueprints so that each new school project doesn’t start from scratch. A middle school in Lawrenceburg might just look like one in Auburn. "I understand the logic behind having a common set of blueprints to use, and I think that would save money, and in many cases that would be reasonable," ISTA’s Schnellenberger said.
Derek Redelman of the Indiana Chamber of Commerce explains that the ISTA wants to control the general fund rates. "That hits right at the problem with property taxes," he said.. "They’ve seen the property tax as the guarantee for the amount of money. They could get whatever money they needed. Taxpayers are saying, ‘We’re not going to take that any more.”"
Redelman predicts that when the caps pass (and they almost certainly will), "the immediate focus will be on cutting teachers." When Daniels was asked recently about teacher cuts, he responded by asking why would teacher cuts be the first option?

"Everyone focuses on teachers," Redelman said, adding that half of school employees in Indiana are not teachers. "Why not the janitorial staff or assistant superintendents? If schools end up facing cuts, we’ll see story after story about teacher cuts," he said.

There’s a revolution underway in Indiana and it’s about to hit the schools.


Anonymous said...

They do not want to change their freewheeling, freespending ways. That is what all this is about-When Governor announced his plan they mounted a huge campaign to stop it. The mere mention of elimination makes them go ballistic--Question is, can we the public keep up the pressure.

Apples of Gold said...

Some of these school corporations spend money like it grows on trees. Here's an example of the wasteful spending by schools. Wasting money on overpriced roofs to the tune of millions of tax dollars does not improve education in Indiana. It takes away from it. This is definitely NOT for the children. Check out my blog for details.


Anonymous said...

The dirty secret of schools is that they often pay full bore architect fees for off the shelf plans. School Supers aren't smart enough to know they are being rimmed. Same with roofing projecs. After all, they think that by blowing taxpayer dollars they are creating economic development in their community-see testimony of Brownsburg, IN idiot superintendent this morning before ways and means. Nonsense on stilts.

Anonymous said...

Time to end the property tax. The homes of taxpayers are more important than the sacred school Taj Mahals of the superintendents. Save our seniors' homes!

Dormie One said...

Who in the hell would pay $14 million for a swimming pool? That's absolutely insane!
I just looked at some golf course listings that Caldwell Banker is handling all over the country and with $14 million my company can buy at least 7 of the best of them and still have money left to operate them at a good profit.
Taxpayers in Indiana shouldn't be upset with there wasted tax money they should look in the mirror at themselves to see the word STUPID printed on their foreheads.
$14 million dollar swimming pools? I'm in the wrong business.


It takes constant heat and pressure to make a diamond. Indiana is a diamond not yet realized.

Anonymous said...

$1.03 billion a year spent in Indiana on health insurance for "teachers". The quotation marks are needed because the standardized test results indicate they are needed. If "teachers" paid for their own health care to the same extend (%)that taxpayers do then we would have much, much lower taxes and, better health for "teachers" the moral hazard being quite reduced.