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The Journal Gazette

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Wednesday, December 06, 2017 1:00 am

Churubusco schools seeking tax increase

Smith-Green districtsees forecast deficit, enrollment decline

MATTHEW LEBLANC | The Journal Gazette

Faced with a worsening financial situation, Churubusco schools will likely ask voters to increase taxes to pay for continuing operational and programming costs.

Years of declining enrollment have caught up with Smith-Green Community Schools, and district leaders say they need help to continue providing services. Otherwise, cuts to staff and programs are likely, they said.

Projections from a financial consultant hired to assess Smith-Green finances show the district facing a nearly $15 million deficit by 2026. Those numbers were presented at a public meeting Monday night.

A second public forum is set for 7 p.m. today at Churubusco Junior-Senior High School.

Consolidation is not an option now, Superintendent Daniel Hile said Tuesday, but it would be considered if an additional revenue stream is not found.

“Right now, closing or consolidating is not on the table,” he said. “But at the same time, we have already made significant cuts.” 

Hile blames the financial situation on the state's funding formula for public schools, which ties funding to enrollment. The formula often hits smaller, more rural schools such as Smith-Green hard because they are in areas where the student population is stagnant or falling, but expenses such as salaries and day-to-day operations continue to rise.

Enrollment at Smith-Green has fallen by nearly 160 students in the past decade to about 1,200 this year, according to the Indiana Department of Education. Brock Bowsher of Umbaugh & Associates said the district could lose 50 more students over the next eight years.

Hile, who took over as superintendent in July, said the district has been wary for years of looming financial problems. Smith-Green cut $450,000 in staff and programs in 2012, he said.

In recent years, the district also has dipped into reserves to cover some costs.

“We have enough in there that will help us for awhile,” Hile said. “Just like anyone's savings account, that money will run out.”

Smith-Green approved a nearly $12 million budget in October. Potential fixes for the problems include tax increases that could cost homeowners in the school district hundreds of dollars.

Of three options that will be discussed tonight, the most expensive is a tax increase of $0.8294 per $100 valuation, which means an increase of about $478 a year for a home worth $138,000.

The least expensive option would raise taxes by $0.5756 per $100 valuation. That means the owner of a $138,000 home would pay an extra $331.80 a year.

Many districts across the state are facing similar problems, said Bowsher, who is working with several that are weighing options for future funding.

Hile said Smith-Green hasn't made any decisions and he will weigh community input before deciding whether to put tax increases to voters.

Also, he said options presented at the public meetings can be tweaked.

A decision on whether to seek a referendum is expected early next year. If Smith-Green officials agree to it, a vote could be held in May.

John Barrett, a former Churubusco City Council member, attended the meeting Monday. Barrett said Tuesday anytime a tax increase is floated, it's often a tough sell – regardless of need.

Barrett, who is a member of the Whitley County Council, offered tepid support for a potential referendum.

“I don't know if you can call it support,” he said Tuesday. “It's probably a situation where it's going to be needed.”