News From Terre Haute, Indiana

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December 21, 2013

Valley school chiefs: loss of biz tax funds would be ‘devastating’

TERRE HAUTE — Wabash Valley school superintendents have  concerns about how their budgets would be impacted if the Legislature eliminates the business personal property tax.

“We can’t handle any more cuts than what we’ve had,” said Mark Baker, Northeast Sullivan school superintendent.

The district board recently voted to close Dugger Elementary and Union High School because of funding issues. Anything that would cut additional revenues “can’t be good for Northeast,” Baker said.

Some superintendents said they aren’t familiar with details of the proposal or how much revenue they might lose in their districts. But loss of revenue — without a replacement of those funds — would hurt.

“I’m sure it will affect us in a way I don’t want to know about,” said Leonard Orr, Southwest Parke superintendent. “We’re bare-bones the way it is.”

Kim Tucker, Clay Community School Corp. superintendent, didn’t have exact numbers but believes elimination of the business personal property tax would mean “a substantial loss” of revenue for the district.

She believes it could be as devastating as the impact of the federal Affordable Care Act on districts. The proposal to eliminate the business property tax “is certainly not well-received by superintendents across Indiana,” Tucker said. “I would hope there would be some considerable thought and research done by our legislators to determine the impact before they would even begin to support that kind of a proposal.”

Elimination of the tax also will partially be made up on the backs of other local property taxpayers, including homeowners, businesses, farmers and anyone who owns real property. Just a few years ago, property tax caps were put into place to provide them relief, she noted.

Tom Rohr, superintendent of North Central Parke Community School Corp., said if that $1 billion in revenue is taken away from local government statewide, “There needs to be some way to allow local government to make up the difference.”

Unfortunately, he said, there are very few options other than “putting it back on local taxpayers. I don’t know how else you would come up with that kind of new dollars to replace what was taken away.”

In an ideal situation, elimination of the business personal property tax would lead to more businesses, jobs and growth for Indiana, Rohr said. Increased assessed value for communities could make it possible to generate more tax revenue.

“Unfortunately, that doesn’t happen immediately. It would probably take a fairly long period of time” before that would occur and the state — and local communities — would reap the benefits, he said.

If no replacement revenue is found, it would mean fewer dollars for districts to work with, Rohr said.

In capital projects, there would be less money for maintenance, repairs, renovations, technology and other equipment. When it comes to transportation costs, there would be the possibility of reducing the number of school bus routes and requiring more students to walk to school.

In rural areas, for example, children might be on a bus 90 minutes one-way instead of 60 minutes.

Sue Loughlin can be reached at 812-231-4235 or sue.loughlin@tribstar.com.

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