For the first time in several years, taxpayers in the Greencastle school district will see an increase in their local property tax rate.
The 19-cent increase, Supt. Robert Green explained Wednesday to the Greencastle School Board, is a result of changes made by the state to shift the burden of school funding more onto local taxpayers.
Along with those changes, a delay in the spring collection and disbursement of local property taxes has led to a loan for cash flow purposes.
Supt. Green told board members Mark Kannowski, Barry Fisher, Jack Berry, Monica Fennell and Mike Dean that of the four quotes submitted, Old National Bank had the lowest interest rate of 4.07 percent on a $3 million loan.
So far, about half of that loan has been drawn, Green said, and he hopes the remainder is not needed.
State revenue is down, he said, but that revenue should be made up when local property taxes are received.
However, county officials have noted that the tax bills have been delayed, so the taxes that were due May 15 will not be collected on the usual schedule, and may not be disbursed by the end of June.
A few small advance draws on money already collected have been received from the county, amounting to $180,000. But funds will become critical when about $1.5 million in lease-payments on building loans come due around the first of July.
On a positive note, spending for the school district is down about $386,000 from this time last year.
"Overall, I think what we're doing is having a positive effect," Green told the board. The energy savings program has saved about $70,000 to date. Cutting the middle school athletic director is saving about $60,000. And other cuts have saved another $45,000.
The good news, he said, is that all instructional programs have remained in tact so far.
The tax information is not encouraging, however.
The assessed valuation for last year was $605 million. With the loss of $54 in inventory taxes that went away through state tax reforms, the assessed valuation for this year dropped to $597 million. That change has resulted in an increased tax rate of 13. And the state shift of funding back to the local level adds another 6 cents to the tax rate.
Individual homeowners will likely see a rise in taxes, Green said.
The loss of the inventory tax was a significant amount for Greencastle. If that money was still on the tax roles, he said, the local property tax rate would be going down, not up.
In 2008, there should be some tax relief from the state, Green predicted, and that should help boost the assessed valuation of the district, which would mean that tax rates decline.
In reviewing tax rate calculations, the board agreed their expenses have been declining, but the tax revenue has declined as well.
"There's not much we can do," Fisher said.
"You all understand it. I'm not sure John Q. Taxpayer will," Green said.
The superintendent also noted that the high school remodeling project is not figured into the 2007 tax rate. Payment on that project will begin in 2008, and the project should not increase taxes, Green said.
Board president Berry said he sees no looming problems to indicate that the current financial stress is just the beginning of more to come. He noted that health insurance costs were down, along with the energy savings.
"I don't think cutting programs or personnel are what we want to do," Berry said.
Green agreed that the last thing they want to do is cut programs that would affect children.
In other business, the board: