Wayne Township schools say tax hike needed to avoid cuts

Wayne Township’s school board said Monday it will ask voters this spring to pass a referendum that would raise taxes.

It’s the only way to avoid cuts, Superintendent Jeff Butts said. The district held off asking voters for money for five years, but the clock ran out, he said.

“We have been operating in a deficit for the past five years because we did to want to go to taxpayers until we’d exhausted all our other options,” Butts said. “There’s an $8 million gap, and we need to make up that gap in one of two ways: we either increase revenue, or we make some cuts.”

The board unanimously backed the plan for a vote on May 5. The district is asking for a 35-cent tax increase per $100 of a property’s assessed value. For a property worth $100,000, taxes would increase by $350 per year, or by $29.17 per month. Butts the average homeowner would pay less than $100 per year.

This is the first time the district has sough a referendum to increase its general fund, which mostly goes toward teacher and staff salaries.

In 2010, Indiana passed a bill to stabilize homeowners’ property taxes, known as tax caps. With the caps now in place, homeowners can’t pay more than one percent of the total assessed value of their property in property taxes. If a home is assessed at 150,000, residents won’t pay more than $1,500 in taxes.

But those caps meant schools lost a primary source of money, so the state allowed school districts to go to local taxpayers to seek voter approval for extra money if they fell short. Wayne Township lost 37 percent of its property tax revenue when the tax caps went in place, Butts said. Only Beech Grove’s 39 percent loss was bigger in Marion County, he said. Wayne Township is the second largest district in the county behind Indianapolis Public Schools.

Supporters of the tax caps believe they offer much-needed relief to homeowners who have seen property values vary widely in the past. But the cap’s critics think it cuts off a viable way for districts to pay for services for students.

Board member Shirley Deckard had no qualms about asking her fellow board members to let the issue go to voters.

“As a retired citizen on a limited income, I ask without hesitation that we pass this resolution for our children in Wayne Township,” she said.

If approved, the new taxes would be in effect for the next seven years.

Butts said if the ballot issue does not pass in May, the district will still have time to discuss where cuts need to be made. Most likely, he said, it will mean layoffs. But he hopes the community’s vote falls in line with responses he’s heard from residents who say local schools are important to them and help maintain the value of their homes.

“This is our new reality,” Butts said. “We need to ask if taxpayers understand the value of the connection between school and community.”