School Board Reviews 2009 Budget

(posted Nov 1)

The new rules for funding public schools are kicking in for the 2009 budget year, leaving the fate of school funding in the hands of the state.

Speedway Public Schools Superintendent Ken Hull is hoping the state's promise to pay the schools' general and special education preschool funds pans out, or school systems could be in serious trouble. The state is expected to fund 77% of Speedway's school budget.

Governor Mitch Daniels' order for the 2007 reassessment has proven to be costly to local governments as they have had to borrow money while waiting for tax distributions. Local governments have not received any 2008 property tax distributions. The upcoming November 10 tax statement is a provisional bill to cover the short fall from using the 2006 assessments and 2006 tax rate during the reassessment. Taxpayers should not expect to see exemptions on their tax bills.

Speedway Schools are no exception. The school board had to borrow almost $6.7 million dollars this summer for the first time in many years to operate the schools and to meet payroll. The borrowing will cost taxpayers about $150,000 in interest.

The reassessment shifted much of the property tax burden onto the commercial and industry that has lead to property tax appeals. Local units estimate their budgets based on collecting about 94% of property taxes levied. Hull explained the 2009 budget includes $286,674 outside the levy to capture taxes from unsuccessful appeals.

Hull said last year the state funded about $5.5 million of $12 million general fund and local property taxes funded about $6.5 million. For 2009, the state has "assumed the entire funding" of $11.25 million toward the general fund. "We are hoping they have the funding. It is based on the state's ability collect income tax and sales tax. In today's economy with the downturn, income is down and sales are down. It is genuine concern," he said.

He said if the state is short by more than two or three percent it could cause serious problems. The school board is expected to pass the $16,323,519 budget at its November 11 meeting.