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Speedway Schools Set to Borrow
(posted May 22)
Like other school corporations, Speedway Public Schools is in dire need
of money to continue operations. The late distributions from the state
are the culprit for the shortfall. The Department of Local Government Finance
would not release tax distributions until the reassessment was completed, which just
occurred last month.
Superintendent Ken Hull said the school is still short $1.3 million from
the 2007 tax distributions, and the 2008 tax distributions, estimated at
$3.5 million to $4 million, are not coming in June. He does not expect
the distributions to come until November or December, and doesn't
expect the final 2008 tax distributions to arrive until 2009.
Hull explained the school has been operating on its reserves for five months
and they are exhausted, so the next step is to go to the Indiana Bond Bank
to borrow the funds. The school needs $4,464,638 for the General Fund;
$1,976,004 for the Capital Projects Fund; and $54,991 for the Transportation
Fund. He estimated the interest expense to cost taxpayers about $91,000.
Some of the interest expense will be offset by investing the money at a
lower interest rate than the rate borrowed.
Hull explained that it is far too early to see how the tax increment financing district will affect the school's budget. The tax increment district set 2005 as the base year for assessed valuation, so the school does not receive any increase in assessed valuation after 2005. He said inflationary pressures are increasing and that was recently reflected in the school board's action to raise food prices next year. Breakfast will increase by 25 cents and lunch by 50 cents. He remains confident that the redevelopment commission would release TIF revenues to help the school if funding shortage occur due to inflationary pressures.
The school consolidation continues to be another issue of concern. He said
most of the school corporations in the state have a population of less
2,000 students. The school is forming coalitions and allies with other
small school corporations and politicians who favor protecting local control.
Speedway continues to "debunk the myth" that larger is more efficient.
He said that if consolidation should occur, the process would take about
18 to 36 months to implement. The delayed implementation should give the
school board an opportunity to create alternatives to avoid consolidation.
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