ELKHART — Voters in the Elkhart Community Schools district got a chance to get more insight this week on a tax hike referendum question on the May 7 ballot.
About 100 people gathered in the Elkhart Memorial High School auditorium for a community meeting Thursday night where district officials provided information and answered questions about why the referendum is needed.
The school board in February voted unanimously to seek voter approval to increase the property tax rate from 13.15 cents to 58 cents per $100 assessed value. It would provide the district with $20.3 million over the course of eight years. The new levy would be imposed from 2020 through 2027 should the referendum pass.
According to the resolution approved by the board, the referendum would provide funding for academic and education-related programs, managing class sizes, school safety initiatives and attracting and retaining teachers by offering competitive pay and insurance packages.
If the referendum passes, property taxes would increase an estimated $165 a year for the median price of a home in Elkhart estimated at $106,400 in value with a homestead deduction, 35 percent supplemental deduction and mortgage deduction.
For the first hour of the meeting, ECS Superintendent Steve Thalheimer gave an overview of the referendum explaining that the referendum is needed to help with under-funding issues with the state.
As with previous presentations, Thalheimer explained how the state has reshaped its school funding system.
Before school districts were able to increase annual property taxes. This average accounted for 15 percent of their general fund budgets, which is used to pay for day-to-day operations such as salaries for teachers and other school workers, equipment like computers and supplies needed to run the schools.
But in 2008, legislators increased the state sales tax rate to 7 percent, from 6 percent, to raise the money needed to replace the $1.8 billion a year that school corporations had been receiving from property taxes, whose rates also were capped.
Now, property taxes paid to Indiana school corporations only can be used for student transportation, building projects, debt service, and other non-classroom spending.
During that time, the district received an additional $100 per student in state funding, but at the same time, Thalheimer said, inflation increased costs $1,200. This meant the district would need an additional $1,100 per student just to keep up with inflation, he said.
If the trend continues – with state funding falling short of inflation – the district would face a $69 million cumulative deficit over the next eight years, Thalheimer said.
To raise local property taxes for extra operating money, school districts could still ask voters on a referendum ballot if needed.
The last referendum, in 2014, Elkhart Community schools approved two measures to eliminate two-mile walk zones (transportation fund) and make much-needed safety and facility improvements (capital projects fund).
Because of a lack of state funding, ECS has not been able to offer salaries and insurance packages competitive to neighboring school districts.
“Many teachers have gone to neighboring districts that have more competitive salaries or better benefits packages,” Thalheimer said. “Or they are leaving education altogether because of how non-competitive teacher salaries are compared with the private industry.”
The starting salary for a teacher at Elkhart Community Schools is $36,350 – lower than the majority of surrounding school districts. It’s below Penn-Harris-Madison, $40,350; Concord, $39,000; Mishawaka, $38,000; Goshen, $36,900; South Bend, $36,838; and Baugo, $36,500. It’s higher than Wa-Nee, $35,800, and Middlebury, $34,827.
The starting salaries for support staff at ECS were notably lower than surrounding districts with paraprofessionals earning an hourly rate of $9.51; cooks $8.11 and secretaries $11.67.
With regard to budget cuts, Thalheimer said the board, under the recommendation of Interim Superintendent Mark Mow, approved plans to reduce or reclassify 10 administrative positions.
The reductions will go into effect at the end of the school year once contracts for those individuals are complete and would provide ongoing savings of about $1.1 million, Thalheimer said.
The district made another cut of $1.3 million by reconfiguring schedules, supplies and other line-item budgets, Thalheimer said, making for an overall budget cut of $2.4 million approved in December.
As of now, Thalheimer, who became superintendent in January, said he’s hesitant to make any more cuts until he learns more about the impact they could have on students.
“I have asked that any position above principal that becomes available, due to retirement or resignation that we analyze that position and determine whether it stays, could be reduced through attrition, or needs to be reclassified so we’ll consistently be looking at those so that our budget is balanced and look at ways to maintain the savings that we can in any way that we can.”
Currently, ECS tax rate is $1.1795. if the referendum passes, it’ll go up to $1.6280—the third highest in Elkhart County—still below Concord ($1.79) and Goshen ($2.11), who’ve both passed referendums.
During the second portion of the meeting, attendees were able to submit written questions. The questions were reviewed by the Elkhart Chamber of Commerce staff who served as a third party, who grouped similar questions together to allow as many questions to be asked as possible.
One person questioned how the district decided that 58 cents would be a suitable rate for the new tax levy instead of a lesser amount.
Thalheimer replied, “When you’re looking at trying do a meaningful increase for employees and looking at anticipated costs, making insurance contributions when also calculating that some people who haven’t taken the insurance will start taking the insurance or people who’ve been on the insurance plan and only done the single plan because they can’t afford the family plan might move there,” he said. “There are all kinds of considerations and calculations done that arrive at a feasible dollar amount… in order to get that dollar value, which is a little over $20 million for security piece and the operating piece all that together is what lands at 58 cent rate.”
Another concern was if the district would request another referendum if it continues to lose more students and state funding after the referendum's eight-year course.
Thalheimer said that wouldn't be the case. He said the district's goal is to make the necessary cuts and changes during that time to keep things afloat so the district won't have to need another referendum.
“We understand the lift we’re asking the community at this point with the goal being that this would be our way to do the work we need to do to stabilize our workforce,” he said. “If the things we’re trying to do and the efforts we make in terms of training our staff and other things on our priority list. If those things aren’t fixing the issue, then there are two things -- 1) either we’re not doing it right or 2) the way this community is working, we might need to resize the school district to make sure it’s meeting the needs of what the community is saying.”
With regards to how much teachers and staff are paid, Thalheimer said he couldn’t provide specific amounts yet being that state law requires that districts can only negotiate between Sept. 15 - Nov. 15.
However, the goal, Thalheimer said, would be to ensure they are more competitive with neighboring districts to attract highly qualified people, particularly those that are coming right out of school and into the profession.
If the referendum failed, Thalheimer said he believes more teachers would leave, class sizes would go up, and the district would lose staff valuable to particular courses and programs. He particularly noted the district's early college program, which saves families $1.5 million in tuition.
“Prior to my arrival, my understanding is that this district typically seen 65-70 teachers leave a year for a size of just a normal rollover. If the referendum doesn’t pass, I’m easily estimating we’ll see up to 200 leave this summer.”
“I try not to be hyperbolic or to exaggerate, but things would be incredibly dire if we do not have this referendum.”
As for upcoming meetings, Thalheimer said the board is determining whether to have another public meeting.
He encourages those who have questions or need information to visit the school district’s referendum page (http://elkhart.k12.in.us/home/administration/referendum-2019/), the Friends of Elkhart Community Schools website (http://supportelkhartkids.com/), or the Friends of Elkhart Community Schools Facebook page (https://www.facebook.com/FriendsofElkhartCommunitySchools/).
He also encourages people to contact him at his administration office.