8.5-cent property tax increase for early childhood ed mulled by MCCSC board, public outreach on May 24

No referendum to increase property taxes has yet been placed on the Nov. 7 ballot by the Monroe County Community School corporation board.

But at its Tuesday night meeting, the board voted unanimously to pass a resolution authorizing district superintendent Jeff Hauswald to  consult with Monroe County auditor Cathy Smith about the calculations that would go into increasing MCCSC’s property tax rate by 8.5 cents.

A press release issued immediately following the board’s meeting  says, “In the November 7th election, MCCSC expects to ask voters to approve the rate not to exceed $0.085 per $100 of assessed property value.”

The revenue generated by the additional tax would go towards early childhood education for 3-to-5-year-old children, as well as other initiatives to make education more accessible.

The other initiatives include free instructional technology, supplies, and consumables for all students. Also made free would be Advanced Placement (AP) exams and tests that are needed for workplace certificates. The additional revenue would also mean free career education, including tuition, testing, supplies, and associated fees.

To lay out details of the potential referendum and to get feedback from the public, MCCSC is hosting a meeting at 6 p.m. on Wednesday (May 24) at the MCCSC Co-Lab at 553 E. Miller Drive, which is the regular board meeting location.

MCCSC board president Brandon Shurr said, “I hope that as many people as possible can come to the meeting tomorrow.” Shurr added that the meeting would also be broadcast on the district’s Youtube channel.

After Tuesday’s board meeting, Hauswald indicated to The B Square that the tax rate for the district’s debt service fund will drop off a bit, which would, if the referendum passes, make for a net increase of just around 4 cents.

In the press release, Hauswald is quoted saying that based on a 4-cent net tax increase, the owner of a house with assessed value of $250,000 could expect to pay about $50 more a year in school taxes.

In November 2022, voters in the MCCSC district approved an 18.5-cent referendum tax rate to replace the 9-cent rate, which was expiring. MCCSC’s 2022 referendum passed with 68.6 percent of voters (21,860) saying yes to the increase.  Opposing the 2022 referendum were 31.4 percent (10,014) of voters.

The referendum now being contemplated for a vote on Nov. 7, 2023 would increase the referendum rate by another 8.5 cents—which would, all other things being equal, bring the total rate levied by the district to 77.95 cents.  But not all other things are equal.

One of the variable factors is the amount of the revenue that the 2022 referendum rate of 18.5 cents will generate in 2024. The impact of HB 1499, which was passed by the General Assembly during this year’s legislative session, is to limit the pace of the levy’s growth. HB 1499 says that the levy amount from referendums cannot increase more than 3 percent over the previous year.

That means the 18.5 percent rate approved by MCCSC voters in 2022 will effectively be ratcheted down to about 16.75 cents in 2024, Hauswald told The B Square.

What is the arithmetic behind MCCSC’s estimate of a roughly $50 impact on the owner of a $250,000 house, if the tax increase is effectively around 4-cents?

Property tax rates in the Hoosier state are expressed as a number of cents of tax per $100 of assessed value. To calculate the impact of a 4-cent tax increase on the owner of a house with an assessed value of $250,000, the first step is to calculate the net assessed value of the house—that’s the amount to which the tax actually applies.

The standard homestead deduction is either 60 percent of the property’s assessed value or a maximum of $45,000, whichever is less. For a $250,000 house, 60 percent works out to $150,000, which means the standard homestead deduction is $45,000.

A supplemental deduction of 35 percent is applied to the remaining assessment, after the standard homestead deduction is subtracted. Here’s the math:

0.35*($250,000 – $45,000) = $71,750

Subtracting both the standard homestead deduction and the supplemental deduction gives the net assessed value:

$250,000 – $45,000 – $71,750 = $133,250

To apply a 4-cent tax to $133,250 means crunching this:

.04/100 * $133,250 = $53.30

Hauswald told The B Square that what he hears from the business community is that childcare and early childhood education factor into the strength of the workforce.

A lot of families can’t afford early childhood education, which means they stay home, instead of joining the workforce, Hauswald said. Hauswald added that he thinks the referendum will have strong support from the business community.

A vote by the board would be required in order to put a referendum on the ballot. That could come as soon as a June board meeting. But based on state election law, the board has until August 1 to certify to the county election board that the referendum should be placed on the ballot.

9 thoughts on “8.5-cent property tax increase for early childhood ed mulled by MCCSC board, public outreach on May 24

  1. Curious about how much the need for these referendums is affected by the oft-reported State level educational underfunding and also, State level support of parallel school systems. Voters should be really interested in that.

    1. That is the reason for the many referenda. It is evidence that the state needs to allocate more funding to public schools rather than the continuing increases in vouchers to private schools, which by law can and do discriminate

  2. I strongly support public schools (including charter schools), and I have supported each referendum initiative proposed by the MCCSC. But I will not be supporting this one because it proposes expanding the tax-supported services provided by schools beyond what lies within the legitimate scope of their responsibilities.

    For example, why should taxes pay the cost of AP and workplace certification exams? AP exams are investments individuals and their families make in reducing the cost of higher education. Workplace certification is an even more obvious investment individuals make in their future employability and earning potential. Why should these investments in private goods be tax-funded?

    The district superintendent, Jeff Hauswald, also thinks that taxpayers should support the cost of early childhood education because “a lot of families can’t afford early childhood education,” and therefore “stay home” instead of joining the workforce. No doubt many potential workers would stay home as well if they didn’t have cars to drive to work in. Does this mean that taxpayers should pay the cost of their private transportation? I am not surprised that Hauswald thinks the referendum will have “strong support from the business community,” because the business community would obviously like to shift to taxpayers the cost of something that ought to be a negotiated form of compensation between businesses and their employees. If childcare is important to working families and to strengthening the workforce, let businesses pay for it.

    None of these arguments addresses the additional issue that an effective increase from 9 cents per hundred dollars of assessed value to 23 cents per hundred dollars of assessed value in a period of one year represents an increase in the tax rate of over 250%. Tax rate increases on that scale, regardless of the total dollar amounts involved, do not reflect responsible governance.

    Ralph Gaebler

    1. It will be pre school education which gives a leg up to our neediest. We have struggled with the need for pre k education for years. It will pay also for text books and learning materials which we have fought the state on for 20 years.

      1. I don’t see your point, Sue. First, Ralph is not arguing that pre-k experiences are not needed. It seems to me he is arguing that if they are needed to free parents to work, then it is primarily the responsibility of employers to provide subsidies or (even better) on-site high quality pre-k as an employee benefit. This can be done by a single large employer or by small businesses as a group in their collaborative tech working spaces or at another suitable location. Another possible solution is for local employers to pitch in to fund pre-K at selected or all MCCSC elementary schools.

        Second, Sue, you make no counterpoint argument regarding funding of AP materials/exams, but just say that “we have fought the state” for this for some 20 years. First, the state has just passed legislation to eliminate textbook fees and has provided funding for that for the next two years. It is unlikely they would reverse such a popular move after two years. As for AP exam fees, I would like to see data on the demonstrated need for the number of high-achieving, low-income students who require support. I am not in favor of automatic public financing of these costs for high-achieving, high-income families. And I suspect that money from the MCCSC could be allocated to cover costs for low-income AP students.

  3. Just say “no.” We already had the near doubling last year. We got significant assessment increases, and now you want to add another 8.5 cents. For school corp will have gone from 9 cents to 27 cents of tax revenue. That is more than tripling on the amount for $100 of assessment. It’s even worse, when you consider that assessments have increased an average of 15% this year alone. Based on those number an individual could literally be paying 3-4x in the school section property tax over the past 2-3 years. I don’t know about you, but most people haven’t seen pay raises even close to that.

  4. There is an underclass never mentioned or even thought about who are oppressed by these insatiable demands of public school teachers. This underclass is the families whose mothers stay home and mother their own children. They forgo a second income, yet public school teachers and their superintendent don’t give a thought to them.

    Superintendent Hauswald assumes sympathy for his lament, “A lot of families can’t afford early childhood education, which means they stay home, instead of joining the workforce.” As if no one in their right mind would choose to mother their own children from motherly love and compassion for those children. No, they must be staying home because they can’t afford to pay other women to mother their children for them.

    Today, there is no argument too ridiculous to be used by those who, with religious fervor, believe statist education is the solution to the benighted ignorance of the poor. But they always explain their graspingness for other people’s children as benevolence. We’re doing this for the poor who can’t help themselves.

    While thinking nothing of the true underclass, our stay-at-home mothers who will be told they have to pay for it. Who have forgone a career and lots of money to bear, nurse, educate, and raise the next generation of Monroe County citizens. Whose mothering is not institutional and paid, but personal and from love.

  5. Lou. The primary purpose of the referendum is to pay for pre k EDUCATION. A side effect is that it means parents don’t have to stay home. The state money will not fund all text costs, and this referendum will also pay for other classroom materials like workbooks and also school supplies. Families who can’t afford the certification cost for certain programs are denied getting that certification. That isn’t ensuring equity.

    I attended the information meeting today and the tax for an average house will be $50. It provides equity and access for all of our children.

    If we think businesses should cover the cost of pre K since it help them keep employees, then business and industry should pay for all education since it provides them with quality employees.

    By the way, businesses pay more for the referendum

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