Indiana school officials remain cautious and conservative about asking voters to increase local property tax rates to fund schools – even though state funding for education continues to lag. Only seven school districts had school-funding referendums on the ballot last week, and five of them passed.
Terry Spradlin, director for education policy with the Center for Evaluation and Education Policy at Indiana University, said the numbers suggest district leaders have become strategic about asking for money. They’re learning when to ask and when not to ask.
Indiana’s current system of relying on voters for some school-funding decisions dates from 2008. School referendums come in two flavors: 1) general fund questions, which levy property taxes to supplement the state funding that’s supposed to pay for school operations; and 2) construction questions, which determine whether schools can borrow for construction or large-scale renovation projects.
Last week, there were four general fund referendums: Barr-Reeve, Munster and Union Township passed, and Boone Township failed (Union Township and Boone Township are small districts in Porter County). There were three construction referendums: Hamilton Southeastern and Noblesville passed and Knox schools in Starke County fell short.
The five-for-seven success beats the state’s historic average by a long shot. Since 2008, there have been 88 school funding referendums in Indiana. Forty-two have passed and 46 failed, according to the detailed scorecard on the CEEP website.
Affluent suburban districts have had some of the best success. Districts in Hamilton County, including Carmel, Hamilton Southeastern, Westfield-Washington, Sheridan and Noblesville, have gone 9-for-10 since 2008. Some of those districts are adding students, so they need voter approval for construction. And they have healthy tax bases, so they can raise a considerable amount of money with modest increases in the tax rate.
Spradlin adds that schools are a point of pride in Hamilton County. “Folks really do self-select to live there because of the schools,” he said. “Quality of life, including the quality of the schools, is very important to residents of those areas.”
Other than that, he said, success or failure of a referendum can depend on the unique circumstances of a school district. Strong leadership, effective communication of district needs and community trust for the local superintendent and school board can make the difference between success and failure.
For example, Barr-Reeve is a small, rural district in southern Indiana’s Daviess County – the sort of district where you might expect residents to vote against raising their own taxes. But voters there chose overwhelmingly – 83-17 percent – to increase taxes to support the local schools.
One concern about the growing reliance on referendum funding is that it will reinforce the sense that there are “winners and losers” in public education. Students in some districts will benefit from an adequately funded public education; others will be left behind.
Spradlin said a CEEP analysis found that state funding of public schools school has become more equitable in recent years, but adequacy is in question: Per-pupil “tuition support” — money provided by the state to local schools — declined by 11 percent between 2008-09 and 2011-12.
During the Great Recession, Gov. Mitch Daniels cut K-12 funding by $300 million to balance the state budget. As the Indiana Association of School Business Officials and the Indiana Coalition for Public Education have pointed out, the legislature could have restored school spending this year but opted to cut taxes instead. Schools face a “new normal” of constrained budgets.
“Even though the formula is more equitable, the dollars are down,” Spradlin said. “It’s a challenging time for schools.”