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Voters to decide on MV tax referendum

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FORTVILLE — Voters in the Mt. Vernon school district will have their chance on Election Day to decide if the school district receives a three-year infusion of additional property tax monies.

Approval of a property tax referendum would give the district an extra $650,000 per year for the next three years to pay off the interest on a potential $3.4 million loan from the state. The increase would be based on property values.

For example, a $100,000 (market value) home in Buck Creek Township would see an estimated $26 annual increase in property taxes for the three-year period. Taxes would increase about $77 on a $200,000 home; a farm worth $2.2 million would experience an increase of about $1,800 annually.

The state loan does not come without a price; the district would have to seek approval from the state every time it sought to spend more than $30,000 or enter into any contract above that amount. The district is already chafing under the potential restraints.

Superintendent Bill Riggs has said there are emergencies, such as maintenance problems, that would need to be addressed immediately, and state restraints could interfere with that.

School administrators have frequently blamed the financial “perfect storm” that included the collapse of the economy, state funding cuts and the timing of a $77 million building and renovation project for financial ills.

But they also say issues such as lower-than-average state funding and decisions made by previous school boards have contributed to the current financial mess. In 1973, the amount the school would receive in local property tax rates was frozen at a much lower percentage than was allowed by law, giving property owners a break and giving the school less funding. During 10 of the past 14 years, Mt. Vernon schools have also been in the lowest 10 percent of state funding.

But critics say the problem has been amplified by poor management. School board candidate James Metcalfe, who opposes the referendum, said management strategies have made things worse.

“The school has borrowed ($3.43 million) at 2 percent interest for six years. Thus, the state is loaning us money below the current and projected inflation rate. For us to pay that back with taxpayer money would cost us $10,000 more per year than the interest we would save,” Metcalfe explained. “The school will still be under state control for three years, (even if) the money is repaid. Yes, it will add some inconvenience in spending money, but I think the school needs to learn fiscal discipline anyway.”

School officials said they believe a well-funded and successful school will help the entire community, and another step in the right direction is the passage of the 2012 referendum.

“Taxpayers that don’t have children in the district still benefit from having a vibrant school system,” school board President Shelton Oakes said.

A functioning and well-funded school system will increase property values in and around the district, allowing those who wish to sell their homes a higher probability of success, according to Oakes.

“The whole community benefits when you’ve got a good school system that focuses on academic excellence,” Oakes said.

Skeptics remain unconvinced that taxpayers should have to pay to simply remove loan interest.

“(The referendum) won’t add one teacher or save one job by paying (the loan) back early,” Metcalfe said.

Fellow school board candidate Carolyn Flynn agreed.

“I am against the referendum,” Flynn said at Monday’s candidate forum at Mt. Vernon High School. “I’ve been against it every time it’s come up. The reason that I don’t believe the referendum is the answer is that I think there are other things that we can try right now.”

She said businesses moving to the area likely will locate in the TIF districts or request abatements, meaning almost no support for the school.

“What we need to do is address this at the state level,” Flynn said.

The legislation that has adversely impacted MV could be remedied by getting money out of the property tax-supported TIF district.

“That’s what is hurting us,” Flynn said. “(The school hasn’t) even gotten (the loan) yet, and now you already want to have the money to pay it back. A lot of folks would say that (the school) would need to live under the guidance of the state.”

In 2010, voters rejected a tax referendum for Mt. Vernon Schools that would have allowed the district to collect up to an additional $1 million in revenue from taxpayers for up to seven years. When the totals were in, 6,260 voters had cast ballots on the referendum: 3,722 against 2,538 in favor.

That defeat, in 2010, came on the heels of the defeat of a similar referendum at Eastern Hancock schools. A referendum in the Southern Hancock district for up to $1.5 million annually for up to seven years also failed that year.

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