This post contains the information presented in the slides for the Hamilton Southeastern School Board working session that occurred on February 15, 2022. I was unable to attend this meeting, but am sharing this information, which is publicly available on the HSE School’s BoardDocs website. Note that this information is being shared without the context or clarifying information that was presented in the meeting itself. Formatting changes were made to help present the information better in this format.

MEETING AGENDA

The meeting agenda was:

• Public school funds and associated revenues
• Background of school funding & referendums in Indiana
• Different types of referenda
• 2016 HSE Operating Referendum
• The future of referenda
• Next steps for HSE

Public School Funds

Education Fund –> 2018 – Present –> State revenue

General Fund –> Pre-2018 –> 2010 – prior –> Property tax

General Fund –> Pre-2018 –> 2010 – 2018 –> State revenue

Operations Fund –> 2018 – Present –> Property tax

Capital Projects Fund –> Pre-2018 –> All property tax

Transportation Fund –> Pre-2018 –> All property tax

Bus Replacement Fund –> Pre-2018 –> All property tax

Education & Operations Funds

• Statutory provisions for revenue transfers
• How HSE handles in their budget process

Deb Service Funds

• Property tax

Food Service Funds

• Student meal fees & federal meal reimbursements

Background of School Funding & Referendums in Indiana

• Pre – 2010
  • School corporations had a property tax levy for their largest operating fund, the General Fund.
  • The tax levy was approved through the regular budget process completed each year.
  • Non-existent
  • A petition-remonstrance process. A 30-day period that allows the community to remonstrate via signatures against a project. If the threshold of signatures is met, a hearing is conducted.
  • At the hearing, the school corporation and the petitioners present their case for/against the project. The hearing officer renders a final decision
• 2010
  • State of Indiana is now the primary revenue source for school general funds
  • The revenue to Indiana k-12 public schools is reduced by roughly $300M
  • Full implementation of property tax caps
  • Onset of school operating and controlled project (capital/construction) referendums and the process that governs their approval
  • Biggest change – school operating referendums must be voter-approved
  • Controlled projects can be authorized without being voter-approved. Project levy is subject to property tax caps.
• Other proposed or ratified changes post-2010
  • Reductions in complexity index, increases in foundation amount, other minor changes
  • Expansion of charter school funding, both virtual and in-person, & private school vouchers
  • Funding increases & inflation
  • Changes to ballot language for 2021
  • Additional changes to ballot language begin in 2023
  • Addition of school safety operating and controlled project referendums
  • “May” share referendum proceeds with charter school

Different Types of Referenda

• Operating – I.C. 20-40-3-5
  • Any lawful school expenses
  • Cannot be used for capital/construction purposes
  • *May* distribute to a charter school within the school corporation boundary
• School Safety – I.C. 20-40-20-6
  • Uses of money in the fund; distributions to charter schools
  • School resource officers; threat assessments; school safety plan; emergency response systems; safety equipment or capital improvements; programs to address mental illness, addiction, anger management, bullying, and school violence; programs designed to improve school safety and reduce violence.
• Debt –
  • Controlled Project – I.C. 20-40-19-3
    • Limitations on uses
    • Must be used towards the costs of the project that was approved by the voters
  • School Safety – I.C. 20-40-21-4
    • Use of the money in the fund for debt service
    • Debt service bonds or obligations issued or incurred to pay for a school safety referendum

2016 HSE Operating Referendum

How will it be utilized?

• To reduce classroom sizes
• Retain/recruit quality teachers
• Continue to provide expanded programming for our students in high ability, language, and other special programs

Why is it necessary?

• 3rd lowest per-pupil funding in the state
• Bottom 1/3 in teacher salary compared with area school districts
• Without funds, reduction of 176 positions = reduction in programming

(My comment: State funding formulas changed near the same time the 2016 referendum passed. HSE saw an increase.)

Outcomes

• K-4 & 5-6 class size targets & building averages; ranges for 7-12
• Competitive as compared to pre-referendum
• No measurable reduction in student programming

The Future of Referenda

What has changed since 2016?

• Ballot language
  • Concerns are selective representation of financial information and use of term “increased” multiple times.
  • 2016 Ballot Language
    • For the seven (7) calendar years immediately following the holding of the referendum, shall the Hamilton Southeastern Schools impose a property tax rate that does not exceed twenty-two and three quarters cents ($0.2275) on each one hundred dollars ($100) of assessed valuation and that is in addition to all other property taxes imposed by the school corporation for the purpose of funding daily educational operations, academic support programs, including the reduction in class sizes, and for any other educational needs of the school corporation.
  • 2021 Ballot Language
    • For the seven calendar years immediately following the holding of the referendum, shall the Hamilton Southeastern Schools continue to impose a property tax rate that does not exceed twenty-two and three quarters cents ($0.2275) on each one hundred dollars ($100.00) of assessed valuation for the purpose of funding daily educational operations, academic and support programs, including the reduction in class sizes, and for any other educational needs of the school corporation.
    • The tax rate requested in this referendum was originally approved by the voters in the Hamilton Southeastern Schools in 2016.
  • 2023 Ballot Language
    • Shall the Hamilton Southeastern Schools continue to impose increased property taxes paid to the school corporation by homeowners and businesses for eight (8) years immediately following the holding of the referendum for the purpose of funding daily educational operations, academic, and support programs, including the reduction in class sizes, and for any other educational needs of the school corporation. The property tax increase requested in this referendum was originally approved by the voters in 2016 and originally increased the average property tax paid to the school corporation per year on a residence within the Hamilton Southeastern Schools by XX.XX% and originally increased the average property tax paid to the Hamilton Southeastern Schools per year on a business property within the Hamilton Southeastern Schools by XX.XX%
  • 2023 Ballot Language
    • Shall the Hamilton Southeastern Schools continue to impose increased property taxes paid to the school corporation by homeowners and businesses for eight (8) years immediately following the holding of the referendum for the purpose of funding daily educational operations, academic, and support programs, including the reduction in class sizes, and for any other educational needs of the school corporation. The property tax increase requested in this referendum was originally approved by the voters in 2016 and originally increased the average property tax paid to the school corporation per year on a residence within the Hamilton Southeastern Schools by XX.XX% and originally increased the average property tax paid to the Hamilton Southeastern Schools per year on a business property within the Hamilton Southeastern Schools by XX.XX%
  • 2023 Ballot Language
    • Shall the Hamilton Southeastern Schools continue to impose increased property taxes paid to the school corporation by homeowners and businesses for eight (8) years immediately following the holding of the referendum for the purpose of funding daily educational operations, academic, and support programs, including the reduction in class sizes, and for any other educational needs of the school corporation. The property tax increase requested in this referendum was originally approved by the voters in 2016 and originally increased the average property tax paid to the school corporation per year on a residence within the Hamilton Southeastern Schools by XX.XX% and originally increased the average property tax paid to the Hamilton Southeastern Schools per year on a business property within the Hamilton Southeastern Schools by XX.XX%
• Reporting requirements
  • 2021 Session – Senate Bill 55, now Public Law 136
    • Implements new reporting requirements
    • Implements contradictory language to a correct a perceived
  • issue
• Potential legislation
  • House bill 1072
    • Share portion of referendum revenue with charter schools that students within your school boundary attend
    • Charter schools can be outside of the school corporation boundary
    • Impacts only operating and school safety referendums, not debt/capital referendums
• Related information
  • Operating referendum renewals are now eight (8) years
    • In 2016, it was seven (7) years
  • HSE is the 4th lowest in the State of Indiana in per pupil funding (SY 2020-2021)
  • Average funding vs HSE vs Referendum

Next Steps for HSE

• Referendum consultant identification process
• Referendum interview committee
• Recommendation of referendum consultant

Disclaimer

Again – This is the information presented in the slides for the HSE School Board Working Session. This is provided here without the context or clarifying information that was presented in the meeting itself, nor does this contain any information on the Q&A that was planned.