I was able to spend a great deal of time interacting with our elected officials during this legislative session and they worked really hard for us. Senator Kenley, Representative Turner, and Representative Braun deserve a big THANK YOU for listening and being responsive. Mayor Cook was also able to get the lobbyist for Cities and Towns to help us.
Since the legislative session has ended, I’d like to give you a recap of how Westfield will be affected. First, funding for Westfield Schools increased a very small amount in both years. The largest part of the funding is the Success amount in year two of the budget. For the first time, success in schools will be rewarded. I hope this will grow over time.
Second, and this is where our legislators really stepped up to help us, we were able to continue a 20 year practice of moving money from one fund to another. Last year, a bill passed which unknowingly did away with this practice. Without help, which we received, we would have been unable to provide transportation for the 2013-14 school year. The relief is for one year only and we may need to ask for community help if we see this flexibility ending.
Finally, school districts who had high achievement have been designated Performance Qualified schools and have been given some relief from one-size-fits-all regulations and can use new flexibility to create more learning opportunities for students.
I’ll be summarizing many of the district successes at the end of the school year, but wanted to share one here, too. Westfield High School once again made the U.S. News and World Report list of top high schools. Remember, for the high school to perform well requires all of the other schools to send students well prepared and anxious to succeed, so awards reflect on the quality of the entire district. I’m very proud of all of our students, staff, and faculty. Congratulations on attaining this achievement!
February is the time of the year when the state determines our tax rate. One of the most misunderstood areas of school finance is the tax rate. I have heard the idea repeated on more than one occasion that if the school needs more money, they simply raise their taxes. This is not true. Revenue and tax rates are controlled by the state legislature and state statute. They are all basic calculations based on targets established by the legislature and statute and then determined by the Department of Local Government Finance (DLGF).
How is the tax rate determined?
One example of how the tax rate is set is based on debt. We have to pay bonds that were issued to build our schools. In order to determine the tax rate, simply divide the debt payment by the assessed value of the township and you arrive at the needed rate. The key variable is the assessed value. If assessed value goes down, the rate goes up. If assessed value goes up, then the rate goes down.
However, now that tax caps are in place, the tax rate may not be the key factor for homeowners. If a home is assessed at $200,000, the maximum tax paid from all taxing districts is $2,000, regardless of any one rate. If the home’s value drops to $195,000, the maximum tax paid is $1,950. The reverse is also true. The past three years have been a period of declining home values, but have now stabilized.
In 2010, the district collected a total of $30,662,501 from the capped funds. In 2011, when assessed value dropped but we raised our tax rate, total collections from the same funds were $27,771,955. So even though we raised our rate, we collected far less. Fortunately, we were able to refinance some existing bonds to lower our costs.
Even though our assessed value declined again in 2013 (the main reason is the removal of the properties along US 31 due to construction), we had major reductions in utility costs allowing us to reduce our tax rate by one-half cent. This will be a slight savings for businesses. Homeowners will not be impacted. The only change to the tax payment for a homeowner is if the value of the home changed.
We reduced over $2,000,000 of expenses prior to the passage of the operating referendum. We have continued to look for cost reductions and efficiencies and have been able to reduce costs by an additional $500,000 without reducing our teaching staff.
- The school tax rate cannot be raised at will. It is highly controlled by the State of Indiana.
- We have, and will continue to, reduce costs where we can.
- Since 2007, the school percentage of the total tax rate has declined by 17 percent.
- The district’s tax rate has declined, even adjusting for reassessment and legislative changes, the last 13 out of 17 years.
- Even though our tax rate went up in 2011 and 2012, net revenue was down over 2010.
- There are really only two ways to reduce the school tax rate: pay off debt and remove that debt payment and increase assessed value so that the denominator in the calculation increases.
The school board, my staff, and I have worked diligently in providing a world class education to our students at the lowest possible cost and will continue to do so.