An Indiana bill designed to prevent widespread cutbacks in school bus service was amended a second time before it passed the Senate last week. Now, HB 1062 would allow school bus ads to generate revenue in three districts as part of a pilot approved by bill sponsor Sen. Patricia Miller (R-Indianapolis).
The amended bill went back to the House, where that chamber can either agree with the changes or send it to a conference committee. The key provision of the bill specifies that a school corporation may adopt a resolution before Jan. 1, 2019, to use certain debt restructuring statutes if the property tax circuit breaker credit impact for the school corporation is at least 10 percent of its levies. It won unanimous support in the House two weeks ago.
So far only one opponent to school bus advertising has emerged. Jim Howard, vice president of the Indiana State School Bus Drivers Association, raised concerns that the new ads could prove distracting and potentially compromise student safety.
“The guy reading that sign is not going to be paying attention to what that bus is doing,” Howard told a local news outlet. “Is it worth the risk?”
Miller noted that 11 other states allow school bus advertising without sacrificing student safety because it is an innovative way for schools to raise money without raising taxes.
The Beech Grove, Franklin Township and Zionsville school districts were chosen to participate in the bus-advertising pilot. Yet they are just three of nearly 60 school corporations (see table at left) that could lose 20 percent or more of tax revenues generated for transportation, bus replacement and capital projects. At Franklin Township, administrators said they might have to take dollars out of the classroom to find the $4 million needed to keep buses running.
“The tax caps have clearly had an impact on public schools, as well as cities, towns and everybody else,” said Miller. “There’s no interest by the public to do anything about raising property taxes.”
Denny Costerison, executive director of the Indiana Association of School Business Officials, said the organization supports HB 1062 because it provides a permanent solution for all school systems struggling with the aftermath of the economic recession, statewide property-tax caps and the new law on school debt repayment
He added that the House proposal is simpler than another bill in the Legislature also designed to provide schools with fiscal relief, Senate Bill 143, as it would retain the current system of property tax collections under the circuit breaker law.
He further explained that the 2008 law established annual property tax caps of 1 percent for homeowners, 2 percent for owners of apartments or farms and 3 percent for business owners — and the resulting loss of property taxes hurt schools the most.
“This bill essentially allows school corporations to continue past practices. It will still mean a loss of revenue, but it will not cripple their transportation system or capital project funds,” Costerison said. “We’ve had districts look at curtailing their transportation, either completely cancel it or cut it back dramatically. The goal is to pass legislation that will protect the school transportation fund, and we’re making very good progress.”
Disappearing Dollars
Earlier this year, officials at Westfield Washington Schools (WWS) and Beech Grove City School Corp. notified the state Department of Education they would end regular-education transportation in three years unless they receive financial relief. The two districts say they will lose about 90 percent under the state’s “protected levies” law that take effect on July 1.
Like Costerison, WWS Superintendent Mark Keen remains optimistic that legislators will find a way to help struggling school districts.
“In all likelihood, the fix will be between the two bills, a compromise of sorts,” he told STN. “Either one fixes us, but obviously the House bill is permanent.”
Because of the way tax caps are distributed statewide, Keen said his district lost 19 percent of potential tax revenue initially, but losses of 91 percent are looming. If the 2008 legislation stands, school property taxes will have to be applied to debt payments before any other expenses. In this worst-case scenario, WWS could keep less than 10 percent of its non-debt levies.
“There is no way we can operate our bus fleets with 9 percent of our funding — that would barely able to cover special ed.,” Keen continued, noting that he is not in favor of asking for further taxpayer support.
He stressed that keeping children safe is also paramount, and their schools are simply not designed for parents to transport students to school in droves. Currently 80 percent or more of the student body ride the bus in the expansive district, which is 56 square miles. The northern half is semi-rural and the southern half is suburban, and both have many two-income families, he said, who heavily rely on school bus service.
“This month we’ve had 13 days of below-zero temperatures, and it’s dangerous for students to be outside … We have many neighborhoods without sidewalks and connectability, so it would be very dangerous to have students out walking,” he added. That’s the transportation side. If you can’t maintain your buildings, that is also unsafe.
“What parent wants to move into a community where there’s no transportation for their children?”
Decatur Township Schools is in the same boat, while the Franklin Township and Beech Grove districts are expected to lose all their transportation and bus replacement taxes to debt service.
Decatur Superintendent Matthew Presiecke has begun holding town hall meetings to discuss a tax referendum to increase property taxes, which could prevent the catastrophic cuts. The first forum was held the day after the Decatur School Board agreed to notify the DOE that they may also have to suspend its bus service in 2017 without the $27 million the local property tax increase would raise.
In a statement on the district’s website, the superintendent said that when he came aboard last August, it was immediately clear Decatur schools would have some tough financial times ahead. He explained that this isn’t because the district is spending more but only because revenues have dropped.
“Decatur has already made $12 million in budget cuts, but it isn’t enough. If we don’t make additional changes soon, we’ll be out of money to run our buses unless we dig deeper into operating funds,” Presiecke stated. “Do we close more schools? Do we cut back on transportation? Do we make more staff reductions? Or do we ask for additional money?”
