For immediate release:
April 10, 2013
INDIANAPOLIS - The Indiana House of Representatives today approved legislation cosponsored by Rep. Sue Errington (D-Muncie) that helps restore more flexibility to school corporations in the allocation for the losses of circuit breaker funds supported by property taxes.
Senate Bill 517 corrects an unintended consequence of a law passed last year that has created a hardship for nearly 50 schools around the state, including Muncie Community Schools. According to Errington, this is a problem for schools that must use a disproportionate amount of their levy to support the Debt Services Fund.
“Under this new provision, the amount of property taxes that go toward the operating balance for the Debt Service Fund will be capped at 50 percent or an additional 25 percent, depending on when the debt was incurred. This will allow those struggling districts to use the remaining tax dollars for the transportation, school bus replacement, and capital projects funds,” Errington said.
“In the Muncie school district, about 73 percent of property tax dollars went straight to the Debt Service Fund,” she continued. “Without this legislation, Muncie Community Schools has insufficient funds for bus transportation for students. Several other school systems are in the same boat.
“The school corporations negatively affected by the current law are not from just one area of the state or one type of corporation,” she added. “Some are urban, some suburban, and others are rural schools. The legislation we passed today provides these schools the flexibility they need to balance the needs and services that are funded through property taxes.”
Senate Bill 517 was endorsed by the Indiana House of Representatives on a 94-0 vote and will return to the Senate with amendments.