Sen. Holdman has introduced SB 127 concerning the ability of schools to conduct referendums to raise taxes for school safety. Nobody likes taxes, but schools, local control, safety — all of that’s good, right? Unfortunately, this legislation hinges on the presumption that the security needs of a school corporation is somehow correlated with the property values within that district. If anything, my guess is that the relationship is inverse. As a per-pupil calculation, the discrepancy can result in one school district generating 14x as much revenue per pupil than another district. It also ignores the transaction costs involved with conducting these referendums. The legislation provides that “A school corporation may impose a school safety referendum tax levy for the school corporation’s fund in the amount allowed under sections 6 through 19 of this chapter, but the amount may not exceed five cents ($0.05) on each one hundred dollars ($100) of assessed valuation.” It then has language talking about the school safety purposes for which the referendum money can be used.
This works out better for school districts with high assessed valuations and lower student populations and worse for districts with lower assessed valuations and higher student populations. This is counter-productive if it turns out (and I think it does) that school districts with a lot of kids living in areas with low property values end up having more security needs. It also does not seem to have a realistic view of what kind of money it takes to conduct one of these referendums. My second hand understanding is that the expense of paying to have one of these elections can vary quite a bit, but $25,000 – $50,000 is not out of the ball park.
The fiscal note for SB 127 has a nice breakdown of how much could be realized per school district with the $0.05 cap in place. Cannelton School Corporation maxes out at $9,931 per year. Meanwhile, down the river in Evansville-Vanderburgh School Corporation, the revenues could be up to $3.4 million. It’s true enough that Evansville-Vanderburgh has more students than Cannelton, but on a per pupil basis, this plan is maybe even more off-kilter. Using the 2017 Average Daily Membership numbers, Cannelton has an ADM of 242, so this would bring in $41 per pupil versus an ADM of 21,930 in Evansville for about $155 per pupil. Mishawaka, with about 5,100 kids could generate about $346,284 for $67.77 per pupil. Meanwhile, Hamilton Community School Corporation up in the northeastern part of the state has about 327 kids but would generate $188,731 for approximately $577 per pupil.
A system where Hamilton Community School Corp can generate 14x as much per student as Cannelton despite having similar population sizes and 8x as much per pupil as Mishawaka despite having, I suspect, fewer security concerns, is not a great system. Cannelton might even lose money on the deal, depending on how much it costs to conduct the referendum. To make matters worse, the legislation prohibits a school that passes a referendum from receiving a grant from the Indiana secured school fund.
If the State is going to tell schools how to spend their education dollars, it should do so in a way that’s equitable and more or less rational. So, if it’s going to provide that tax dollars have to go to security concerns rather than other educational concerns, more money should go to schools with greater security needs, and we shouldn’t have a system where low population, high AV school districts are generating 14x as much per student as other school districts.