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West Lafayette Schools: 2026 Referendum

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This fall, the West Lafayette Community School Corporation has put a school funding referendum question on the ballot. If you live in the district, you should vote “yes.”

The school received approval from the voters for such a referendum tax rate as recently as 2023. But, the General Assembly has shifted the state’s tax system enough that, in order to maintain the status quo, the school has to get a new rate approved.

The short version is that the state has changed the way a property owner’s net assessed value is calculated which means that the referendum tax rate no longer generates the same revenue. Because of the changes, despite having the same real estate and the same approved tax rate, the landowner would be paying less tax to support the schools.

Here is the longer version:

History

Back in 2008, the General Assembly completely revamped how schools were funded. Mostly the state took over school funding. A number of state decisions led to West Lafayette, in particular, getting the short end of the funding stick.

We were landlocked and couldn’t grow – resulting in less money from a formula that valued growth. We were a small district – resulting in less money from a system that subsidized geographic size with greater busing needs. We were a district with fewer socioeconomic challenges – resulting in less money from the State’s “complexity index.”

None of these were necessarily unreasonable choices by the State. But the result was that West Lafayette received somewhere like the third lowest amount of per student funding of any school system in the state. Fortunately, the State gave districts the referendum tool – we could vote for higher taxes to support education in our communities.

West Lafayette is a relatively wealthier area that *strongly* values education. So, in 2010, the voters authorized a tax rate of up to $0.43 per $100 of assessed value.

Now, as it turned out, that rate was more than the school ended up needing. The budgets approved by the West Lafayette school board never exceeded $0.37 per $100 of assessed value. So, when it came time to re-authorize the referendum rate in 2017, the ballot question was limited to a rate of up to $0.37 per $100 of assessed value.

And, again in 2023, that was the rate that was re-authorized for taxes beginning in 2024. Up until now, it was sufficient for the school’s needs. And that rate would have been good through the year 2031.

SEA 1

But, in 2025, the General Assembly adopted SEA 1 which significantly changed the landscape. That referendum rate approved by the voters is multiplied by the “net assessed valuation” of a piece of property. Which is to say the assessed valuation after applying deductions.

There are three main areas where the General Assembly reduced the net assessed valuation in ways that reduce the funding for schools: 1) changes to the residential property deductions; 2) creation of a new deduction for rental properties; and 3) increased exemptions for business personal property.

The upshot is that if a person was paying $600 to fund the school under the old $0.37 rate, under the new assessment rules, an increased rate will be necessary to generate that same $600 tax payment for the school.

The school district has analyzed the impact of net assessed value once SEA-1 is phased in and has determined that a rate of up to $0.57 is necessary to generate the same revenue as the $0.37 rate under the old assessment rules.

Residential Property Deductions

Under current rules, a residential property owner gets two deductions: the “standard” deduction of $48,000 and a “supplemental” deduction of 37.5% of the assessed valuation. SEA 1 is phasing out the “standard” deduction and increasing the “supplemental” deduction from 37.5% to 66.7%. (The “supplemental” deduction will need a new name once the “standard” deduction is phased out and stands alone.) West Lafayette tends to have higher value homes, so the deduction from this extra percentage will tend to exceed the $48,000 “standard” that it will be replacing.

The break even point appears to be a home worth $102,740. Below that valuation, homeowners would get more value from the “standard” deduction. Above that valuation, the “supplemental” deduction based on a percentage gives a bigger break. And, because this is a percentage, the higher the valuation – the bigger the tax break.

So, where the $0.37 rate might result in a tax bill on a $300,000 home of about $600, now – because net assessed value is being calculated based on about 33.3% of the home’s actual value – that rate has to be higher (closer to that $0.57 rate) to generate the same $600 on the same property.

This is why the schools need to go through the referendum process to replace the existing $0.37 rate with a new rate of up to $0.57.

Rental Property Deductions

Indiana divides real property into “1%, 2%, and 3%” categories. This comes from categories added to the state constitution back in 2010 which limits the permissible tax bill to 1%, 2%, or 3% of a property’s net assessed value (unless an additional tax is authorized by referendum.) 1% is for homestead property, which is to say owner-occupied real estate. 2% is for agricultural land and non-owner occupied residential property (i.e. rental properties). And 3% is for everything else – which is to say (non-ag/non-rental) commercial, industrial, and business personal property.

Under current rules, the 2% properties don’t get much in the way of deductions. They have to pull full freight on their taxes. Under SEA 1, they’re given a 33.4% deduction which phases in through 2031. Given that West Lafayette is a university town, this deduction hits us particularly hard. Once again, the higher rate is necessary to keep the tax bill for landlords the same.

Business Personal Property

There is currently a business personal property exemption for property of up to $80,000. That exemption is being raised to $2 million. Meanwhile there is currently a depreciation floor of 30% – meaning that business personal property being used by a business has to be valued at 30% of its original value regardless of how old it gets. Under the new law, that floor drops to zero.

So a business might be using business personal property in its operations, but – for tax purposes – that property might now be regarded as not having any value. While West Lafayette does not have the same amount of business personal property as more industrial areas, these changes will not be helpful.

Ballot Language

The ballot language mandated by the General Assembly for these school operating fund referendums is, in my opinion, intentionally misleading. The folks in Indianapolis are reflexively hostile to local taxes and want the language to sound as intimidating as possible. In particular, it suggests an increased tax bill but does not make clear that the increase is as compared to no referendum rate at all rather than as compared to a taxpayer’s current bill. As our superintendent put it in a recent Op-Ed:

The legally required ballot language is misleading because it presents a calculation based on assumptions that do not necessarily reflect what an individual homeowner will actually pay. Actual property-tax impacts vary depending on assessed value, exemptions, deductions, circuit-breaker protections and other circumstances.

However, property-tax reform and individual tax-relief eligibility mean that a particular homeowner’s school property taxes could decrease, remain about the same or increase by a few dollars annually.

Consequences of Non-Passage

The referendum funding was put in place by our voters for a reason. The funding rate wasn’t adopted just for the hell of it – our community gets a return on its investment. It prevents class sizes from becoming unmanageable. It pays for teachers the school needs. And, it enables programming that provides our kids with a well-rounded education. If you cut the funding, teachers get cut. Class sizes get bigger. Programs not required by state law – think music and art – go away.

Referendum funds constitute nearly 25% of the West Lafayette school budget. These funds provide salary and benefits for more than 50 teachers in addition to paying for custodial and maintenance operations, including wages, benefits and equipment.

Conclusion

The goal of the West Lafayette school referendum question in 2026 is to keep school funding steady. The school is not trying to increase the amount it receives from this tax rate. Because of the variability in tax situations, some landowners would still experience a decreased tax bills while, for others, it might stay the same or increase somewhat. The tax impact is not expected to be significant for any homeowners as compared to the current tax structure.  Meanwhile, the impact on the school for voting “no” will degrade the quality of education in our community. A “yes” vote this fall is necessary to prevent this and preserve our schools in West Lafayette.

Hicks: Quality of Life Investments Spur Economic Growth

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Ball State Economist, Michael Hicks, has a column explaining that, while there is strong evidence that a community’s quality of life investments spur economic growth in that area; Indiana’s policymakers have mostly chosen to pursue the less reliable “agglomeration” model for economic growth.

Quality of life investments are amenities like outdoor recreation, cultural attractions, dining & entertainment, etc. Quality of life can also refer to things like education, public safety, access to quality housing options, and a clean and healthy environment. Meanwhile:

Agglomerations is the technical term for the magic that happens when businesses cluster in a certain area. … The idea is simple. Businesses that locate close to one another inadvertently share innovation and skills. They may do so through formal cooperation, by hiring one another’s staff or just by having people from the same trade hang out at a bar or go to church together.

One way or the other, the trick to economic growth basically involves getting educated people with their attendant abilities and skills to live in your area. Hicks tells us that the former is much more reliable than the latter. In spite of this, Indiana’s policymakers have spent far more resources on agglomeration than quality of life – spending gobs of money trying to attract employers to various places.

Part of this – maybe a large part –  might simply be a matter of imbalanced lobbying power. Companies who want government money have a pretty compelling incentive to hire people who can advocate for policies that direct public money to their private interests. The general public has a much more diffuse interest in the benefits that come from quality of life investments – particularly before they are actually built.

But I also have a sense that there is a strain in Hoosier thought that regards spending money on quality of life as frivolous. Maybe this goes back to our Calvinist/Puritan roots. Spending money on business and work is serious and productive. Spending money on a more enjoyable life is wasteful, possibly sinful. This world is a testing ground for the faithful, not a place for joy! (To be clear, this is me speculating; not something Prof. Hicks has ventured.)

 

Teachers are the Tip of the Spear

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Casey Smith, writing for the Indiana Capital Chronicle, has an excellent account of a recent meeting of the General Assembly’s interim study committee on fiscal policy. The top line information is that Indiana’s teachers make less than surrounding states and that’s going to cause us problems. (Ball State economist Michael Hicks has done a good job explaining how  Indiana’s fiscal and policy choices over education have hurt us and will continue to hurt us.) The information received by the study committee indicated that median wages for teachers, when adjusted for inflation, have declined since 2020 and lag behind neighboring states.

Some of the responses, hoping to dodge state responsibility for fixing the issue, are a riff on the classic “waste, fraud, abuse” theme which is an old chestnut when it comes to any government spending. In this case, some of the lawmakers are certain that the state money is simply not getting to teachers.

“It’s frustrating up here … that we want to take care of teachers as best we can, because we think that helps us educate kids better,” said Sen. Scott Baldwin, R-Noblesville. “But dollars going into the school system from this body don’t seem to always make it into the classroom or teachers’ pockets.”

…

Baldwin continued to push for greater transparency in local spending to ensure that “dollars reach classrooms and teachers,” rather than being absorbed by administrative growth.

…

Other ideas discussed included …  giving districts more flexibility to redirect certain capital project funds — like those used for athletic facilities — toward salaries.

“We just need to somehow loosen up that money for teachers over another astro-turf football field,” said Sen. Travis Holdman, R-Markle.

I challenge the idea that we are spending inordinately on facilities or administrators. But, even without getting into the weeds on that question, I think it’s absolutely worth mentioning – and loudly – that you need more than teachers to educate a kid. It’s like the recent trend on the right these days of trying to focus on “war fighters” in the military and ignoring the importance of logistics. One of my favorite quotes from Neal Stephenson’s Cryptonomicon (set in World War II):

The United States military … is first and foremost and unfathomable network of typist and file clerks, secondarily a stupendous mechanism for moving stuff from one part of the world to another, and last and least a fighting organization.

Similarly, Ulysses S. Grant has been criticized (perhaps unfairly) as being less of a soldier than General Lee. But Grant was a good quartermaster with a superior grasp of logistics which is part of why his efforts succeeded and Lee failed.

In a similar way, teachers are part of an educational system – an important part, but hardly the only part. We should make sure teachers are properly paid but it would be foolish to do so by starving the system of its facilities and logistical capabilities. (A failure to recognize that education requires a systematic approach is also a deficiency in Rep. Thompson’s recommendation for “market-based” incentive pay for STEM teachers or other areas where there are shortages. STEM teachers rely on, for example, the elementary teachers who have taught the kids to read and the fundamentals of math.)

Once again, as Caleb Mills – the father of Indiana’s educational system – said, “there is but one way to secure good schools, and that is to pay for them.”

SK hynix and West Lafayette

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South Korean computer chip manufacturer, SK hynix has a $3.8 billion project in the works for West Lafayette where I live. The project, located in the Purdue Research Park, was announced last summer with a fair amount of excitement and not much opposition so far as I could tell. But a requested zoning change has precipitated a lot of discussion in the community with protests against “toxic industry” in our neighborhoods. For my part, on balance, I support the project. There are risks, but I think the potential rewards outweigh them.

Background

I’ve tried to add some information to the zoning map below so people unfamiliar with the situation can get their bearings.

As originally announced the facility was going to be located in the purple area (“Site A”) which has been zoned “I3” for decades. Earlier this year, however, a rezone request was made to convert the adjacent parcel to the east (“Site B”) into an I3 zone as well. SK hynix apparently believes that Site B will better suit its purposes and wants to have Site A available for suppliers. Both of these plots are owned by the Purdue Research Foundation and have been for quite a long time. However, over the decades, West Lafayette has expanded — for those who know Purdue but not the area generally, Mackey Arena is about 2.5 miles due south.

West Lafayette zoning in and around proposed SK hynix site.

The I3 zone is the least restrictive. The County’s zoning ordinance describes its intent for the I3 zone as being “To provide areas for industrial activity, contracting, warehousing and wholesaling, that are heavy in impact because more than just loading activities are conducted outside — and associated retail and service establishments and agricultural activities as identified in the Permitted Use Table.”  When PRF filed the petition to rezone Site B to I3, signs started popping up in adjacent neighborhoods (such as my own in University Farm, southeast of “Site B”) urging opposition to “toxic heavy industry” in our neighborhoods.

The Area Plan Commission staff recommended approval (page 79 of the PDF if the direct link doesn’t work). In the rezone request and in the lead up to the Area Plan Commission meeting, PRF did not provide a lot of information about the reason for the rezone. I can’t recall if it was even made explicit, initially, that this was connected to the SK hynix project, though it seemed to be at least widely understood that this was the case. My strong suspicion would be that PRF was under some non-disclosure obligations and my less strong suspicion is that SK hynix did not really appreciate the nature of the building opposition.

Whatever the case, by the time of the Area Plan Commission meeting, while it was eventually disclosed that this was in connection with SK hynix who preferred Site B, there were a lot of people present who did not want this in their backyard and not much of a presence on behalf of SK hynix or PRF. The concerns raised by members of the public present at the meeting were unchecked. So, despite the staff recommendation in favor, APC itself voted against. Ultimately these actions are advisory. The West Lafayette City Council has the final say for rezone requests in the City.

Since the time of the APC meeting, SK hynix and PRF have been much more active. Two of three information sessions have been held with another one coming up (as I write this) tomorrow. PRF has provided an information site. The City Council vote is scheduled for this coming Monday.

Resistance to the Project

But, the opposition has been active as well. In a lot of ways, the dynamics surrounding the opposition to the chip project resemble the dynamics of the school board opposition I’ve blogged about at length. My participation in the school board battles has made me unhappily attuned to yard signage. I’d say the overlap between signs opposing the school board majority and signs opposing the chip project is high. But the overlap is, by no means, complete. Some good friends who have been with me in the trenches of the school board fights are not in favor of this project moving forward.

Not that I have any kind of cybersecurity background, but the “red team/blue team” parlance has captured my imagination. The blue team is trying to defend the network while the red team is trying to attack it. Abstracted from cybersecurity, the general concept is that the blue team is defending the institution and the red team is attacking.

In the school board context, it always felt like the red team had the advantage. The red team can scattershot critiques and claims, and the burden of proof is always on the blue team. When a red team critique fizzles out, it is quickly forgotten. When a blue team defense is inadequate, it is never forgotten. Institutional performance is, inevitably, nuanced and won’t satisfy everyone. Red team critiques can always hypothesize better outcomes or worst case scenarios. The blue team has a record to defend. The red team mostly does not, and counterfactuals are, by their nature, tough to disprove.

That’s the social media dynamic at least. In the echo chambers where these critiques get made, they can feel overwhelming. In the broader world, the critiques either aren’t heard so loudly or maybe the public is getting better at calibrating for them. In the West Lafayette school board context, at least, the critics of the institution have been at work for five or six years and have not yet, at least, taken a majority on the board.

Whether I’m accurately perceiving parallels in this chip manufacturing debate and whether “the establishment” promoting the project or the critics opposing the project will win the day remains to be seen. Folks opposed to the project have been active in my community, spreading signs, posting to Facebook community pages, distributing flyers and so forth.

(Some are reportedly getting a little *too* active – reportedly going beyond official City contact channels and “tracking down and calling personal cell phone numbers of council members and council members’ family, all of which are not public record, as well as finding all of their social media accounts such as Facebook and Instagram and trying to send messages to them and their family there too.”) 

Folks supporting the project have not been as overt. It’s a familiar dynamic. I imagine people who are opposed will be motivated to attend the public hearing while the average citizen who supports this probably won’t feel the same impulse to attend.

What the vote means

Both sides have been a little ambiguous about what the vote represents. The actual vote is whether Site B will be rezoned as I3. If the vote is “no,” the zone will remain agricultural. Site A is already zoned I3 and has been for a long time. But the opponents have cast this as a vote to determine whether there will be “heavy industry” near our neighborhoods. They don’t seem to grapple too explicitly with the fact that Site A is already zoned “heavy industry” and is even closer to neighborhoods than Site B. The general vibe is that, if the City Council votes against the rezone, the parade of horribles goes away. When pressed on the existing I3 parcel, the fall back position is that we don’t want to double the industrial foot print.

For its part, SK hynix has not said that the deal falls apart if Site B doesn’t get rezoned. I think the impression they have given is that the project will move forward on Site A. When I express uncertainty, maybe I haven’t been paying enough attention and, instead, there have in fact been firm commitments as to what happens if the rezone fails. Or, maybe PRF and SK hynix are being a bit cagey.

A future where Site A contains the facility, blunts the impact of concerns raised by the opponents — if this industrial activity is going to happen one way or another, Site B is maybe better situated to mitigate the concerns. On the other hand, they really want the facility on Site B with suppliers on Site A, so the prospect of the $3.8 billion investment going away is good leverage toward motivating Council members to vote “yes” despite voices from the surrounding neighborhoods urging them to vote “no.”

If I am a Council member, I think I would approach this vote as if it is one for or against the project happening or not happening even though as I explained above, that’s not, technically, what the vote is about. Even if the Council votes in favor of the rezone, there is (as the saying goes) many a slip ‘twixt a cup and a lip. For reasons outside of any local control, the project might not move forward. On the flip side, even if the Council votes against the rezone, it might still move forward on Site A.

All of that said, I think a “yes” vote says “we’re in favor of this moving forward, let’s manage the negatives as best we can, and let’s try to amplify the positives.”

Meanwhile, a “no” vote says “maybe we can’t stop you, but we’re not going to help.” Given that Site A is already zoned I3, if the project moves forward on that site, the neighbors opposing the rezone probably don’t get much happier just because Site B is no longer in play. The justifications they propose for a “no” vote don’t change all that much as between Site A and Site B. Those arguments suggest that the project should go away altogether.

The environmental concerns

The broad tone of the environmental critiques generally give the impression that this factory will turn West Lafayette into a hell hole, unsafe for our children.  Outrage over putting “toxic heavy industry next to a day care” is definitely something I’ve heard. Much is made over the chemicals involved. I can’t imagine the criticisms being more adamant if, rather than the proposed  memory chip production lines and packaging facilities, the proposal was to install a strip mine next to a smelting plant.

Smelting plant or not, the fact remains, the chip facility will be working with materials you wouldn’t want to drink.

On the flip side, proponents point to things like applicable environmental regulations and facilities in other areas that apparently co-exist with neighborhoods without notable problems. (In an interview with a Purdue professor of electrical and computer engineering, he listed an Intel plant in Hillsboro, Oregon, a Texas Industry facility in Richardson, Texas, and another Intel facility in Chandler, Arizona.)

I’ve also seen proponents point to the industrial activity already going on close to our neighborhoods. For example, Anduril is right in the area, working with rocket fuel. Such defenses of the proposed chip plant locations are usually deflected. The defenses are coming from people with a vested interest in the project moving forward,  not being sufficiently analogous, or – in the case of businesses like Anduril – being smaller.

I am not getting into the minutiae of this back and forth because I recognize that I am not at all qualified to evaluate the merits of these arguments. For example:

“Sodium *explodes* in the presence of water. Using chlorine on enemies is a *war crime!* That new restaurant is putting both in our kids’ food!”

That sounds bad! And then it turns out the restaurant is putting salt on the food. I’m exaggerating, of course. But you don’t have to get too far beyond that level of chemistry before me “doing my own research” is a bad idea.

A typical neighborhood gas station has thousands of gallons of volatile, explosive, toxic liquid going in and out every day. But, it’s familiar. So most of us don’t think too much about it. I really have no idea what’s already going on in the Purdue Research Park. I’m given to understand that they also handle chemicals I would not want to drink.

Ultimately, I trust our institutions and the regulations put in place to keep us safe. I recognize that this ends up sounding unbearably naive. Doomsayers inevitably seem wiser. Hell, sometimes they’re even right. And incredibly bad things do happen from time to time. Even if this project is a good choice, incredibly bad things could still happen. I cannot remotely promise that bad things happening are impossible.

However, if you look at our history, it’s tough to point to a time when people were safer. You can pick this or that bad thing that’s worse today than it was yesterday. But those worse things are generally offset in a myriad of ways in which things got better; problems we don’t worry about anymore because someone fixed them. And, in most cases, these improvements are because of the regulations and institutions we put in place to keep us safe.

It’s true that you can say that farm ground is safer than other business and industry activities, and that would be fair enough. But I don’t think that’s a great or realistic alternative. “Get busy living or get busy dying” was the line from Shawshank. Ball State economist Michael Hicks (in another context) has declared that, as a community, “you either grow or you shrink.”

Many folks like where they live and wish for those places to remain unchanged. I certainly understand that desire, but keeping things the same really isn’t an option. You either grow or shrink.

Growing places face problems, but these are happy problems. These places need to expand schools, roads and water service with tight budgets. They need to plan for new residential construction that will appeal to mobile residents, yet still be affordable to public servants — like teachers and police officers. It’s unfortunate we have to plan affordable housing for public employees, but that is the road we’ve taken and is best saved for a later column.

Growing places appeal to new residents and typically attract private amenities, such as restaurants, grocery stores and other businesses people like to have nearby. Growing places already have good schools and low crime rates. That is one of the reasons people move there. So, the challenge for these places is how to keep the schools good, the roads paved and the neighborhoods safe.

Shrinking places also face problems, but they are unhappy problems.

We’re going to have problems no matter what we do (and even if we do nothing at all.) I think West Lafayette should choose the path with happier problems.

What do we get out of the deal?

Most of the focus has been on the potential downsides. It’s pretty normal for humans to be risk averse. The present is known and, even if it’s not perfect, the problems feel manageable. By contrast, the future is dark and full of terrors. Big projects engender opposition. Subaru, which has been a critical addition to the community was a centerpiece of attacks by Evan Bayh as he successfully campaigned to become governor in 1988. I’m glad our city leaders did what was necessary to bring them to town.

While there are risks, on the other side of the ledger, I think it’s hard to overstate how big of a deal a $3.8 billion investment is in the context of West Lafayette. The certified assessed value for the city as a whole in the 2025 budget order was $1.6 billion. Now, this isn’t a straight forward taxing situation. The project is part of a state “innovation development district” where the state takes a healthy cut. I don’t think we’ve seen the exact terms of the deal. But, the statute provides for the locals to get at least 12% of the resulting revenue.

Given the amount of investment, we’re still talking about real money. and that’s before you get to the knock on effects. 1,000 jobs generating paychecks and local income taxes. Businesses that crop up in the area to serve SK hynix. Everyone involved eating at local restaurants, shopping at our grocery stores, and otherwise doing things that stimulate economic activity.

Also, not for nothing, but a lot of West Lafayette’s economic eggs are in the Purdue basket. Diversifying our local economy probably isn’t the worst idea.

Other locations

Some of the opponents of the rezone who live in the nearby neighborhoods seem to advocate for just about anywhere other than the present proposal. I think we need to resign ourselves to the idea that the choice is Site B, possibly Site A, or not at all. As I understand it, the project requires city water, city sewer, and land of a certain size with appropriate zoning. That takes rural Tippecanoe County off the table. Even if another parcel in West Lafayette were found that met that criteria, it’s still going to have neighbors.

The Discovery Park District, west of campus where Skywater was working on its own plant before that project fell through, has been pointed to as an option by people in the neighborhoods surrounding the Purdue Research Park.  I’ve read online discussions suggesting that the available land at the Discovery Park District wasn’t large enough or not suitable. Candidly, I don’t know the truth of that one way or another. But, again, because it’s in the city, there will be neighbors, and the environmental concerns (whether they are dire, incidental, or somewhere in between) don’t go away.  Also, projects like this don’t turn on a dime. I think our choices are Site B, maybe Site A, or not at all.

Conclusion

What else can I say? I think the potential rewards outweigh the potential risks. I do not have the background to evaluate the relevant chemistry. I think traffic, development, and all the rest of the challenges can be dealt with.

I tend to trust the voices that tell me that the risks are manageable more than the voices that tell me they are not. As this debate has progressed, the former have tended to provide a nuanced assessment. They have their biases to be sure, but nobody on the pro-side of the fence seems to be saying that the project will be an unmitigated blessing. There are challenges. There are two sides to the cost/benefit ledger. On the other side, I do seem to hear voices telling me that there is only downside; rarely acknowledging a potential upside.

Knowing that the world is a messy place, my tendency is to find the nuanced position more persuasive. I’m skeptical of certainty. Could I be wrong? Of course.

At the end of the day, given the potential benefits, given the measures in place to manage risk, given the fact that Site A is already zoned I3, and given that other communities seem to be making this kind of project work, my preference would be that the Council support the project coming to our community.

Hicks on SB 1 – Tax Shift from Business Property to Local Income

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Good commentary from Ball State economist, Michael Hicks, on SB 1. I’d encourage everyone to read Hicks’ piece directly. He explains it better than I will. In any event, SB 1 was touted as property tax reform and, I suppose it is. But the impact on homeowners is minimal while the impact on schools and local government is large. Most homeowners will see a savings on their residential property of $100 or less. Some of the wealthiest might get up to $300.

The real shift seems to come from a couple of business personal property provisions. The exemption from filing on business personal property goes from $80,000 currently up to $2 million under the new law. Additionally, there is currently a 30% floor on depreciation for equipment. That floor goes away and businesses can depreciate the value equipment purchased after the effective date of this legislation down to nothing.

The legislation gives local government the opportunity to make up for the losses to some extent by raising local income taxes. “The new local income taxes can be raised by 1.8 percent to include municipal or county government, public safety and other local governments, such as schools and libraries.” Sen. Alting from Lafayette voted against SB 1 because he said it was mainly a way for State officials to say they were cutting taxes while making local officials the bad guys.

“They’re waving a flag, saying we’re the ones cutting your taxes … when what they’re doing is shifting everything on to the local government and saying, ‘You be the bad guys. You add the taxes needed to run a city or run a school,’” Alting said.

“We’re going to shift it to let (Lafayette Mayor) Tony (Roswarski), who is I think the best mayor in Indiana, be the bad guy. And we’ve left him no choice, the way I see it. … I wouldn’t do that to Tony, and I’d hope he wouldn’t do it to me. This is just wrong.”

Of course, local government can do nothing and try to get by with the de-funding of schools, libraries, public safety, and the rest. But, Hicks’ prior work suggests that this is perhaps penny-wise but definitely pound foolish.

SB 1 also means that every county, city, school and library district in Indiana will now have the chance to debate the value and cost of local public services. We will get to hear about the importance of schools, libraries and police to families, and how much these services cost. Some communities will choose wisely, crafting places that people wish to build their lives in. Other places will choose poorly. Then, we’ll all get to see the results.

Finding Equilibrium on the “Dear Harvard” letter and why it matters to all universities

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Good post by Purdue economics professors, Jay Akridge and David Hummels, (not exactly lefty firebrands) on the administration’s “Dear Harvard” letter and the threat it poses not just to Harvard, but to universities generally. Akridge and Hummels write a blog called “Finding Equilibrium” focused on the future of higher education.
Under the veneer of civil rights concerns, the executive branch is demanding changes to Harvard’s governance, departmental structure, faculty hiring, student admissions, and student conduct policies. In addition, the demands require extensive and intrusive new reporting and audit requirements on all the above, along with punitive actions taken against particular departments based on the content of their scholarship. It wants to impose quotas in faculty hiring and student admissions based on a federally mandated conception of “viewpoint diversity.”
When Harvard declined the executive branch’s demands, Trump indicated his intent to retaliate by using the IRS as leverage.
Say the economics professors:
“It’s old, rich, elite Harvard. The vast majority of higher education institutions look nothing like Harvard with respect to financial resources, selectivity, student profile, research reputation, alumni achievements,…so?
Let’s be clear. This represents perhaps the most dangerous moment in the history of the modern university. The Trump administration is threatening nothing less than the financial destruction of the world’s leading university. That is, unless Harvard complies with what they (Harvard) regard as a series of clearly illegal and unconstitutional demands, and put every aspect of their operation under the systematic control of the federal government.
Again, you might think this is an Ivy League problem and not relevant to the rest of higher education, but that would be wrong. It is no accident that first Columbia and now Harvard have been targeted, with Penn, Princeton, Cornell, Northwestern, and Brown next in line, and the list of “concerning” universities growing by the day. If the strongest and best-resourced universities are brought to heel, the rest will follow. And as should be clear from Columbia’s capitulation, agreeing to the administration’s initial demands does not resolve matters. It invites additional penalties and more aggressive intervention.”
The entire thing is worth a read.

Federal Economic Chaos Hurting Indiana

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Tariffs and the recent economic chaos is resulting in a projected $2 billion less in revenue for the State of Indiana than previously projected. That’s going to leave a mark.
“What happened?
The December forecast data included roughly $800 million in new revenue for the state over the next two years, though nearly all of that came in the first year. Now even that marginal growth is gone. Much of the loss can be attributed to economic uncertainty, including worries about the impact of tariffs in the country’s most manufacturing-intensive state.
…
According to an analysis from Axios Indianapolis, Indiana is the third-most reliant state when it comes to China, which imported $6.1 billion in Hoosier goods in 2023. More than half of that was in pharmaceuticals and medicines followed by oilseeds and grains.”
This is a far cry from America’s economic prospects six months ago.
Two front pages of the Economist side by side. The first from October 2024 has a roll of dollar bills rocketing to the sky with the headline “The Envy of the World”.The second is this week’s front page which is a version of Munch’s Scream painting but the face is instead an upside down sack of dollar bills. The headline says “How a dollar crisis would unfold.”

What a difference six months makes.

Turning Pain into a Virtue and Spreading It

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Posted this in a Facebook thread and it’s a theme I mention from time to time, but for posterity:

The context was a debate in the Indiana Senate about whether teachers learning about and using techniques having to do with emotional intelligence is valuable for instruction. The General Assembly is removing “social emotional learning” provisions from the Indiana Code. Near as I can tell “SEL” is one of those pieces of jargon that, regardless of its true or original meaning, has turned into a shibboleth. One of the things being projected onto it from the right is the idea that it means coddling the kids, making them weak, emasculating the boys, and so forth.
This leads me to one of my periodic observations where I feel like a fair amount of the bad in the world we see is adults trying to rationalize their childhood trauma. Their parents beat them, neglected them, or otherwise treated them poorly in ways that may have, in retrospect, been unnecessary. But it can be unbearable to think that the pain and hurt inflicted by one’s parents may have been needless. So, they project virtue onto some of this stuff to give the pain value. Once pain becomes valuable, it becomes not just permissible but virtuous to spread it.

Hoosier Demographics: Get Busy Living or Get Busy Dying

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Ball State Economist, Michael Hicks, has a good column that I saw in the Indiana Citizen entitled “What the census tells Hoosiers about the Future.” I don’t know that there is a ton of new information in there, but one point that he lays out more bluntly than I usually see is that communities basically have a choice between growing or shrinking. Maintaining the status quo really isn’t an option. Either path has consequences. The growth consequences tend to present a happier set of challenges than the consequences of decline.

We see that most of the growth opportunities in Indiana come from immigration (70%) and lesser amounts from births (21%) and in-migration from other states (9%). And the places that attract growth feature strong public services, particularly schools. These features are paid for with taxes. A community seeing shrinking population usually sees the people with human capital leaving first (i.e. “brain drain.”) In general, therefore, it stands to reason that places in Indiana that oppose immigrants and taxes, are probably going to have a bad time in the coming years.

The entire column is well worth reading, but Hicks concludes:

The ability to make a choice to grow on your own terms, or decline, should be carefully guarded and nurtured by elected officials—particularly at the state level.

Still, any column about growth and decline needs to be honest about the future. Six of the 10 fastest-growing counties are in the Indianapolis metropolitan area. Nine of the 10 fastest-growing counties are urban, and nine of the 10 fastest-shrinking counties are rural.

There is room to grow in all the fast-growing places. There is little room to shrink in communities that are in decline.

I know many residents in small Hoosier towns want lower property taxes and are wary of immigration. Just be clear-eyed about the consequences of those choices, and make sure you are planning for smaller, less prosperous towns, school consolidation, longer response times by fire and police and continued brain drain. Those are all policy choices.

Due Process is Where You Go to See if What They Said is So

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“Nashville is where you go to see if what they said is so.”
I’m not anything like a country music fan, but I thought about this lyric from “Carl Perkins’ Cadillac” during a discussion about the current administration’s resistance to due process.
I mean, sure, you *say* you’re deporting bad people. But, talk is cheap. Probably cheaper today than maybe ever before. Due process is where you go to see if what they said is so.
“No person shall be deprived of liberty without due process of law.” In other words, “put up or shut up” is the American way.