Disney says levy won't impact county if granted
HAMLET — Indiana’s recent change in how school funding is calculated at the state level has caused more local backlash, as Oregon-Davis School Corporation Superintendent Steven Disney explained their current financial situation to the county commissioners last Monday.
Disney explained that schools were previously funded in a large part by the state while the general fund tax levy for Oregon-Davis covered roughly one-third of the budget, allowing the state to cover the remainder. However, new legislation has switched all school funding to the state, eliminating the local tax levy. Following that, the state has made a number of legislative changes that have reduced the amount of funding given to schools, forcing Oregon-Davis to make some tough decisions.
“Since the state has taken over, Oregon-Davis’s funding and general fund revenues has been cut, cut, and cut. And specifically, small schools like Culver, like Oregon-Davis, like South Central, like Argos, are receiving about a 10 percent cut, where districts like Plymouth and Knox this year are at about even or about a 1-2 percent increase, so small schools have been cut,” said Disney.
Toward the beginning of 2010, Oregon-Davis had an annual budget of $4.6 million. In January 2011, the corporation was informed that they would be receiving roughly a five percent reduction in funding from the state, so they knew they would have to tighten their belts for the upcoming year. However, in August, the corporation received a letter from the state informing them that they would receive $4.19 million in general funds, then in October, they were told it would be again reduced to $3.982 million. Enrollment for the school has also been declining due in part to the economic decline, further lessening the budget.
As a result, Oregon-Davis made several cuts in staffing to accommodate the tighter budget. Eight teaching positions have been eliminated, along with one administrative position and one and a half support positions over the last two years for a total expense cut of at least $620,000.
Unfortunately, these cuts are not enough to solve the problem in the long run. Three options were presented to an audience present at a public meeting held by the school to get a feel for the public opinion. They could choose to do nothing and continue the status quo, consolidate the district with a nearby school, or add a local general fund referendum to the taxes to make up for the cuts by the state.
A local general fund referendum would add up to $0.1911 on property taxes. For a home valued at $75,000, this would come out to about a $31.53 increase in property taxes overall. For acreage, it would add an estimated $2.87 per acre.
Overall, the audience supported the option of adding a general fund referendum. If the school board decides to go ahead with pursuing the referendum, they have until Dec. 31 to get the topic on the upcoming ballot. Taxpayers would vote in spring on whether or not to allow the school to add the referendum, and if passed, it would go into effect in 2013 for a period of seven years. The $0.1911 increase in taxes would add about $400,000 to the school’s budget, which is the estimated shortfall for the upcoming years’ budgets.
While a tax increase may sound unpleasant, Disney explained that the school has done their best to keep the tax rate as low as possible for this year.
“We’ve tried to do everything that we could to get the tax rate down from 2012. In 2011, we were at 92 cents. In 2010, we were at 99 cents. For 2012, we’re going to be down to 84—so this 19 cent increase would actually make our tax rate at $1.03, which is basically where it was in 2010. We have the lowest school tax rate in the county, even with these 19 cents added,” he said.
Disney said the levy, if granted would not affect the entire county.
"The referendum is outside of the circuit breaker and will not impact the county. In fact, in 2011 Oregon-Davis had a total school tax rate of 92 cents compared to Knox at 1.11 and North Judson at 1.11. County-wide, if the referendum were to pass, it would be outside the circuit breaker impact, and with the additional levy, Oregon-Davis would still have a school tax rate at or below the rest of the county schools," he said.
Disney told the commissioners that the state is eliminating the Small Schools Grant in the amount of $119,000, as well as the Restoration Grant for $216,000. The Prime Time Grant is being reduced by half of $116,000.
Disney explained that these cuts equate to eliminating $240,000 in teaching positions, and eliminating most, if not all, of their extracurricular activities for $105,000. Custodial positions would be cut down for $37,000, and the alternative school, Disney explained, would likely have to be closed down to save $45,000. Disney emphasized the fact that Oregon-Davis has made a number of changes to improve the school, raise the graduation rate, and help kids, but these cuts by the state could undo all they’ve done.
“When I got there, we didn’t have an alternative school,” said Disney. “At one time, they had an alternative school in the county but they’ve done away with it. The graduation rate was 74 percent. We spent money to do it and we’ve raised the graduation rate to 91.5 percent. Every year, if that’s three or four kids that make it through, that’s three or four kids that are going to wind up doing something and contributing themselves.”
The school’s pockets are running down to lint, but Disney says that they will be able to get through the next six months of funding by dipping into their Rainy Day Fund.
“We built our Rainy Day Fund to try to be ready, and we can withstand the next six months. We’re going to be spending about $150,000 out of Rainy Day to get us through the rest of the school year,” said Disney.
With the state’s squeeze on the school, Disney says that it’s come time for the voters to decide whether or not they want to keep that school alive. The cuts have been made and the cards are down, and it will be up to the voters whether or not Oregon-Davis Schools survive—and as Disney says, that decision is likely to affect much more than just the school.
“We’ve cut [the budget] down, and we’re going to still have to make some cuts. But now you’re getting into, ‘What do you want your schools to look like?’ Oregon-Davis is the focal point of that community, and it has a history. And what keeps that part of the community together? There’s nothing else in that community that brings people together other than that school, and it’s going to be a choice to the voters,” said Disney.
Disney was asked to set up a meeting between the council, school board, and Umbaugh and Associates to discuss the impact of raising property taxes because, as Smith described it, raising these taxes could create a “balancing act” between the council general fund and school budgets.