School Board Sees Red Ink in 2010

Tax Rederendum Still in Talking Stage


(posted 9.09.09)

Resident Rick Hostetler vowed to help the Speedway School Board garner public support if a property tax referendum is needed to save the schools from consolidation.

“The reason we came to Speedway is because of our schools,” he told the board at its September 8 budget hearing.

“My concern is the deficit we are running. This is something new for Speedway Schools.”

According to Superintendent Ken Hull, the school is running about a $1 million deficit due to reassessment issues delaying tax distributions over the last two years. He broke the deficit down, saying 2007's deficit spending was $600,000 and last year's was $506,000. The school has about $100,000 in interest expenses due to reassessment issues.

Hostetler wanted assurance that if property taxes are raised they will be dedicated to the schools only, and not to other units of government. He commented that the Speedway Redevelopment Commission's revenue history is about $15 million with an $8.85 million debt.

Hostetler contends the school's $1 million deficit would have been offset if the commission was not using Allison Transmission's personal property tax abatement as TIF revenue. The SRC has received $3.1 million in TIF funds that would have gone to other local tax units if the TIF district had not been created. He agreed that redevelopment is needed.

According to Hostetler, the school would have received $1.1 million over the last two years if the TIF was not in place. “I would like to see that money returned to the school; returned to the library.” He added the library had to bond last year to repair its roof. He said that Speedway schools have a good reputation that carries throughout the state. “I still have grandchildren that need to go to this school,” he said. “I want them to go to Speedway.”

Hull disagreed that the TIF revenues hurt the school. He said the other taxpayers made up for the difference that Allison did not pay due to their abatement. “We stayed whole,” he said. He estimated that the school would not have received any more than $113,000 from the roll off in 2008 if the TIF was not in place. He said the school even received extra money in 2007 from property taxes due to an excess levy. He said that excess levy is drawing interest in the bank.

Hull said the school will have to freeze its spending now and may have to look at cutting personnel at the secondary level if they don't do a referendum. He expects to break even in 2009. The proposed 2010 budget is not expected to break even, even if economic growth continues, due to anticipated increases in areas such as health insurance.

Despite the bleak outlook, the board approved hiring an assistant junior high wrestling coach and assistant cheer coach.

Hull said the TIF will not impact the school's general fund in 2009 because the state legislature took on that responsibility. He did clarify that it would have an impact on the capital improvement projects fund that covers the schools' maintenance programs.

He said the school cannot ask the SRC for its $1.1 million share because the SRC has the authority to determine whether or not it has excess TIF revenues. “It is their control,” he said.

The school is also facing lower funding due to the drop in enrollment. Hull told the board that as of “2 pm today”, the district's count was 1,524; 115 students less than last year. The official count day has been moved from September 11 to the 18th.

Hull told the board that it was “worthy of a discussion" to allow staff members residing outside Speedway to enroll their kids in Speedway schools. Hull is hesitant to open the door to allow students to transfer from other schools as a means to increase funding. He said it makes it difficult to allow outside students to transfer in when the school does not allow residents transferring to different elementary schools within the district.

He said there is a political movement to consolidate small schools. “They are taking financial control of the revenue side of the equation.” Hull thinks a favorable referendum will send a strong anti-consolidation message to the legislature that the community is willing to pay additional property taxes to keep its independence. “We need to get this message out,” he said.

The school is trying to increase its revenues through grants. It now receives $400,000 from the federal Title 1 program, and the board approved accepting an additional $63,000 in grants.