With schools largely reliant on state money for operating expenses—a funding source that has not kept up with the rate of inflation—and with local dollars capped and primarily covering transportation and facilities, over one-third of the state’s nearly 300 districts have put over 270 education referendums on local ballots since 2009.
A school tax levy referendum is a question on a ballot asking communities to tax themselves more in order to provide adequate resources, teachers and staff, or safe and updated facilities for their schoolchildren. There are three different types of tax levy referendum: operating, safety, and construction.
Why so many referendums? In 2008, there were major property tax reforms passed. One of them required referendums to approve large debt-financed construction projects. This replaced Indiana’s unique petition-and remonstrance process, which allowed residents to circulate petitions to challenge school capital projects. The referendum requirement moved the decision to the voting booth, requiring voter approval for debt-financed construction projects.
Also in 2008, the state capped the tax bills of property taxpayers, and in 2010, Indiana voters approved an amendment placing these caps into the state Constitution. Taxpayers whose bills exceed their caps receive a credit, and the revenue is lost to local governments. Though the property tax no longer provides revenue for the general fund, schools receive property taxes for transportation, capital projects, and debt service. To put tax cap loss in perspective: According to a study, due to property tax caps, Indiana school districts lost over $250 million in property tax revenues in 2014 alone.
One thing is for sure, communities believe their local public schools should be appropriately funded.
