Fort Wayne – The Fort Wayne Community Schools board amended its proposed budget Monday to decrease a property tax increase from 3.2 percent to 2 percent.
Board president Mark GiaQuinta and member Steve Corona dissented in a 5-2 board vote on the resolution.
A 2 percent increase would equal an additional $20 per year for a taxpayer with a home valued at $100,000 whose bill has not reached the state-mandated 1 percent property tax cap.
The 3.2 percent increase would have raised that same monthly bill by about $33, said Kathy Friend, chief financial officer.
The change will cut $2.6 million from the FWCS capital projects and transportation funds. About $2 million would have been used to repair bleachers at Wayne and Northrop high schools and replace a section of the roof at North Side High School.
The proposed budget will now total about $285 million, but Friend estimates that after property tax caps, the budget will come to about $276 million.
The 1.2 percent extra tax increase was allowed as part of legislative changes made this year. A previous law required Indiana school districts to take out a bond issue to cover pension obligations, and required districts to cut other funds to ensure that taxes wouldn’t be increased to make bond payments.
Some districts weren’t following the law but will be required to do so beginning in 2013. But legislators are allowing districts to phase in cuts over four years to meet the pension obligation.
FWCS was already prepared to meet the full pension obligation, so it was allowed to take some of the money it had set aside for the pension payments and put it back into its budget. The move would have caused taxpayers’ rate to increase, but it would have provided the district with funds it had been cutting for years.
The district planned to use the extra funds for building improvements not included in its $119 million building project.
“These are projects that have to be done that aren’t in the $119 million project,” GiaQuinta said. “But I’m concerned the public might not understand the increase is money they would have been paying anyway.”
Member John Peirce, who led the campaign for the $119 million project, voted in favor of lessening the tax increase because the original plan went against the district’s campaign promise of a maximum rate of $27 a month per $100,000 assessed value.
“I said over and over and over again the maximum was $27 per year, and I’m concerned about the perception,” he said.
The board asked Friend to bring up the tax increase next year, when 50 percent of the pension payments will require a neutral tax impact.
The board’s decision follows Mayor Tom Henry’s move to back down on a 5.7 percent property tax hike in the city’s proposed budget. He instead proposed a 2.8 percent increase, but the City Council denied any increase to property taxes for the city budget.