Schools cite tax-cap law as hurdle for funding

Posted: 4:42 PM, May 25, 2016
Updated: 2016-05-25 22:11:54-04

DELAWARE COUNTY, Ind. – Six years ago, the state passed the property-tax circuit breaker law. It puts a cap on how much property tax you have to pay. But RTV6 is learning it's had some devastating consequences for some school districts.

One district hit especially hard is Muncie Community Schools. It’s facing an $11.5-million shortfall this year.

Also, this year, those schools have missed out on over $7 million they would have otherwise received without the tax-cap law.

PREVIOUS | Muncie Community Schools broke, facing shortfall of millions

Overall, the district is in debt by about $31 million.

“I mean, if you gave me $31 million, we’d (still) be broke,” Superintendent Dr. Steven Baule said.

The district is now scrambling to make ends meet and convince lawmakers some type of funding change needs to happen soon.

Dr. Baule says he’s spent the last 9 months making cuts, exploring outside sponsorships, encouraging teachers to get grants, and finding new ways to dig the district out of the hole.

“I think people just want to say, ‘Wow. Muncie Community Schools has mismanaged things,’” Dr. Baule said. “But there are also outside factors that are hammering away at the district’s ability to pay bills and right our own financial ship.”

He believes the biggest outside factor is the property tax-cap law.

If that 2008 law hadn’t been passed, the district would have brought in $52 million more over the past 8 years. On a yearly basis, that would be about 41-percent more funding.

It’s not just Muncie schools feeling the crunch.

As RTV6 dug through the numbers, we found on average, Indiana school districts are missing out on roughly $823,120 they would have otherwise received if the law didn’t exist.

Right now, Indianapolis Public Schools (IPS) is losing out on nearly $18 million in potential funding.

For Wayne Township, that number is $14 million.

Franklin Township is missing out on more than $7 million.

Dr. Baule says it’s a problem, and lawmakers need to acknowledge it and find a way to boost education funding before more districts find themselves where Muncie is right now.

“They’ve got to fix it, or they have to admit that public education is not a priority, and that would be a very sad choice to make,” Dr. Baule said.

We will continue to follow the issue and ask lawmakers if they plan any changes.

Want to know more about how tax caps are affecting your school district? Explore the data for 2016 by clicking the image below: