Mt. Vernon is proposing a new property tax, part of which would help continue to fund maintenance of facilities, like the corporation’s middle school field house.
Tom Russo | Daily Reporter
This story has been updated to better explain how the proposed tax would affect residential property owners.
HANCOCK COUNTY — Voters in the Mt. Vernon school district will determine next year whether to accept a new tax.
The decision will come as a decade-long funding boost that’s been instrumental for the school corporation nears its end. Not helping matters, in the view of school officials, are the property tax caps that limit revenue available for schools. The challenges bring a significant portion of funding to what Mt. Vernon describes as the “edge of a cliff” in the next few years. If the referendum passes, officials say it will help sustain school operations, keep staff pay competitive and enhance security.
Mt. Vernon’s school board voted unanimously to add the question to the May 2022 primary election ballot. The question asks registered voters living in the school district if they’d support a new property tax of up to 17 cents per $100 of assessed value from 2023 through as late as 2030. That boost is projected to bring in more than $3.2 million annually.
Vernon Township and Buck Creek Township in western and northwestern Hancock County make up the school district. The average gross assessed value of homes there is just over $200,000. For an owner of such a home, the new tax would result in paying just over $14 more a month, or nearly $170 more annually.
The example assumes multiple deductions residential property owners can be eligible for, like homestead and supplemental homestead, which reduce tax liability. Those deductions are used to calculate a residence’s net assessed value, which is what tax rates and levies are calculated from.
“This is a very mild to moderate ask,” said Jack Parker, Mt. Vernon superintendent.
Shannon Walls
Greg Elkins
Kellie Freeman
Jack Parker
If the tax passes, Mt. Vernon projects the average property tax paid to the school corporation per year would increase nearly 16% for residences and 10.5% for businesses.
“That is the percent change in the schools’ portion of someone’s tax bill,” said Greg Elkins, chief financial officer for Mt. Vernon. “That does not mean a tax bill is going to increase 15%.”
The extra tax would affect even those at their property tax caps.
“But the reason we can make this ask so moderate is because we’re able to spread this to everybody, including all of the new businesses,” Parker said. He added that includes businesses with tax payments captured by tax increment financing districts. Properties with taxes being abated would pay the new tax based on whatever the property value is abated to.
Mt. Vernon’s current total tax rate is almost $1.63 per $100 of assessed value. If the referendum passes, Elkins projects the rate will be closer to $1.70 possibly by 2023, and probably by 2024 despite the new 17-cent levy. He attributes that to the tax rate that backs the school corporation’s debt decreasing slightly after a waiver ends in 2023 that’s allowed Mt. Vernon to capture back some revenue from losses spurred by property tax caps. The total tax rate should decrease further, he added, as development continues in the school district and boosts assessed value.
That would keep Mt. Vernon’s rate higher than that at Hancock County’s other school corporations should they not change much from their current levels. Total tax rates for 2021 are $1.01 for Greenfield-Central, $1.07 for Southern Hancock and $1.12 for Eastern Hancock. By comparison, rates for nearby districts Hamilton Southeastern schools and Carmel Clay schools are nearly $1.25 and $0.86, respectively.
In 2012, as Mt. Vernon experienced financial duress, the state allowed the school corporation to restructure its debt over a period of 10 years, which has provided about $3.3 million annually. That ends in 2023.
On top of that, Mt. Vernon, like many government units, continues to lose out on tax revenue due to Indiana’s property tax caps. The school corporation projects losing $3.5 million this year and $3.8 million in 2022.
While Mt. Vernon leaders support the new Vernon Township Fire Protection Territory for the boost to public safety it provides, its creation results in a $1.1 million annual loss to the school corporation.
“We have an operations fund cliff coming to us, and in 2025, if we do nothing different, we’re going to be underwater,” Parker said.
School officials say the referendum would provide sustainability for the corporation’s operations fund, which supports transportation, utilities, many staff positions, facility maintenance and other expenses. They add it will also support a more competitive pay scale for teachers and staff, noting Mt. Vernon’s current base teacher salary is the lowest of the county’s other school districts similar in size.
The referendum would support additional school resource police officers as well.
If the ballot question fails, Mt. Vernon would have to wait at least two years before trying again. Should it get voted down, officials fear budget cuts and class sizes increasing as the student-to-staff ratio grows through attrition and a hiring freeze.
Leaders say the referendum is needed even after other savings the school corporation has achieved through changing providers for its employee clinic and prescriptions, energy savings projects and staffing decreases via attrition.
“The easy thing for us to do would be to push it off and let future boards deal with it, but then they’d be sitting here dealing with the same thing,” said Kellie Freeman, Mt. Vernon school board president.
Shannon Walls, a school board member, agreed.
“We don’t want to leave the next leaders of this district in a bind financially and most importantly impact our students in a negative way and our staff, so I believe in this tax,” she said.
Parker encourages questions and feedback on the referendum at his upcoming virtual Traveling Talks, the next of which is noon to 1 p.m. Tuesday, Jan. 11. To sign up for that or any of the upcoming talks, visit mvcsc.k12.in.us.
The referendum comes as the school corporation continues pursuing a future growth plan estimated at over $100 million, which includes a new elementary school among its projects. Mt. Vernon is funding growth plan endeavors with its debt service tax rate, which officials and their financial advisers say can back the undertakings without increasing.
This will not be the first time Mt. Vernon has directly asked voters to raise property taxes. Voters narrowly approved a referendum in 2014 to increase taxes to address an operating debt. It was the third time in four years the district had put a tax hike before voters, reflecting the difficulty such measures can face at the ballot box.
