INDIANAPOLIS – School referendums are getting a lot of attention this legislative session with some lawmakers wanting to curtail them and others wanting to expand them.
“I'm not stopping referendums. I'm trying to have them at times when the largest percentage of voters are there,” said Sen. Blake Doriot, R-Syracuse. “A lot of people that vote for referendums don't understand the impact.”
Lawmakers crafted operating and capital referendums as a way around tax caps that were put in the state constitution in 2010. The caps mean less money for cities, counties and towns, but those entities have other taxing options to fall back on.
Schools didn't. So they were allowed to seek special referendums to give districts additional revenue. The key is all revenue from these referendums are above the caps and therefore even Hoosiers at the caps can see their property tax bills grow.
According to Purdue University Professor Larry DeBoer, a property tax expert in the state, more than $314 million was levied through referendums in 2018. That was up 26 percent from 2017.
That represents about 4 percent of the overall property tax pie.
“Referendum funds are the fastest growing,” DeBoer said. “They're a small share of the total property tax, but a large share of the annual increase in property taxes statewide.”
Doriot offered Senate Bill 246, which says public questions such as referendums could only be placed on the ballot at a general election or a municipal general election if the district is contained entirely within a municipality.
That would mean schools might have to wait up to two years to put a referendum before the people.
Doriot said two to three times the number of people vote in general elections than in a primary. And he said sometimes a $100 million project is getting decided by a few thousand people.
He and others think referendums should be more clear on the percentage jump the tax increase will represent, instead of saying your taxes will go up 73 cents per $100 assessed valuation.
But school groups came out against Doriot's bill in committee.
J.T. Coopman, executive director of the Indiana Association of Public School Superintendents Association, said making schools wait to get voter approval will increase building costs.
“Indiana is a referendum state. We are entitled to have a vote without the restrictions imposed in this bill,” he said.
John O'Neal, of the Indiana State Teachers Association, said he understands the rationale behind the bill but it “further restricts opportunities for local areas to fund their schools.”
Doriot has withdrawn the bill from consideration.
While that discussion was going on in the Senate Elections panel, the Senate Tax and Fiscal Policy Committee passed a bill to create a third kind of referendum specifically for school safety.
Sen. Travis Holdman, R-Markle, wrote the legislation to help schools with safety costs the state can't afford to pay.
He and other supporters concede that schools can largely use existing referendums for what they need but labeling it school safety gives it a leg up at the polls. The maximum school safety levy would be 10 cents per $100 assessed valuation.
That is about $100 for a property worth $100,000.
DeBoer has tracked all the referendums in the state since they were implemented – with 63 percent passing.
Holdman said initially many referendums failed but now about 80 percent are passing because schools have learned to better educate the public about what they are seeking.
“I realize this is not the solution for every school district in the state,” he said. “But this is basically the only outlet to provide this for the community since no state dollars are available.”