MEDORA — Carr Township voters will not see a referendum tax levy resolution question on the primary election ballot in May.
It has been pushed back to the general election in November.
Medora Community School Corp. Superintendent Roger Bane shared that news during the board of school trustees meeting in February.
He said the original question he submitted to the state Department of Local Government Finance had the dollar amount of increase.
“This was old language and my mistake,” Bane said. “The new language being used must have percentages of increase for residential and business properties. These percentages are determined by the county auditor. This is something that changed in Indiana Code.”
Once the auditor finalizes those percentages, he said he will present the new resolution and language to the school board during its April meeting, set for 6 p.m. April 11 in the school library.
“I don’t know that there will be any benefit of doing it in the fall other than it will give voters more time to ask questions and think about how they want to vote,” Bane said.
During a special meeting in January, Bane recommended the school board adopt the resolution, and that unanimously passed 5-0. Only one person from the public attended.
The question submitted was: “For the eight calendar years immediately following the holding of the referendum, shall Medora Community School Corp. impose a property tax rate that does not exceed 50 cents on each $100 of assessed valuation and that is in addition to all other property taxes imposed by the school corporation for the purpose of funding costs related to providing educational services, including staff and operational expenses?”
Bane said 50 cents would raise approximately $194,253 based on the 2022 assessed valuation of $38,850,636.
If the referendum passes, he said the corporation can reduce its debt service payment for budget year 2023 by 15.5 cents because it won’t be doing the circuit breaker waiver, and the net effect on the total 2023 tax rate will be 34.5 cents.
All of Medora’s current construction debt associated with the debt service fund will be paid off in 2025.
If the referendum fails, Bane said there could be a reduction or elimination of student programs, student transportation, certified staff or classified staff.
“We’re not here to promote it,” Bane said during the January meeting, noting it’s against the law for him or the school board to do that. “I think it’s our responsibility to put it out there and let the taxpayers decide.”
In 2019, the Indiana Department of Education had public school corporations switch from a general fund to an education fund.
The fund is dedicated to paying for student instruction and includes expenses related to academic achievement and instructional support, such as teacher and principal salaries, school supplies and technology. No local property tax dollars go to the fund, as it is funded by the state based on student enrollment.
The state also combined the capital projects, transportation and bus replacement funds into one, known as the operations fund. That includes expenses related to the school board, superintendent, central office and some school personnel, paying bills, bus costs and other costs of operating the school. The fund is based on the corporation’s assessed value.
Bane said switching to the two funds meant corporations could no longer pay certain positions out of the education fund.
“So all of those positions and all of those salaries were transferred to the operations fund, and they did not give us anymore levy tax dollars to fund that,” he said.
Since 2019, Bane said he has been transferring money from the education fund to the operations fund, but the state doesn’t allow more than 15% to be transferred.
To date, including budget year 2022, he said he will have transferred $540,000 from the education fund to the operations fund.
The 2018-19 teacher salaries and teacher retirement costs were $617,969. For 2022-23, those costs will be $847,957 due to unfunded legislative mandates for the minimum teacher base salary to be $40,000 per year, Bane said.
Future teacher and administrative salary increase obligations are estimated to be $20,000 per year, which Bane described as “a substantial increase.”
Medora has been funding the additional costs through a circuit breaker waiver, which allows the corporation to use its debt service fund levy to help offset the reduction to its operations fund levy. That, however, expires in 2024.
Bane said the state has renewed the waiver twice, but he doesn’t know if they will do it again.
“That’s really how we’ve been keeping that operations fund going, plus the transfers from the education fund,” Bane said. “Really, I can’t transfer anything from the education fund anymore just because of what the state mandated salary-wise. It’s impossible.”
With Medora’s enrollment, or average daily membership, dropping from 162 in September 2020 to 147 in September 2021, Bane said he can’t afford to keep transferring an average of $135,000 a year from the education fund to support the operations fund. The ADM determines how much money the corporation receives per student for the education fund.