As the Oregon-Davis School Board considers a potential property tax referendum next year, local residents had another chance Wednesday to learn about the corporation’s financial situation.
Brock Bowsher with accounting firm Umbaugh and Associates explained that the corporation’s General Fund revenues dropped from nearly $5.5 million to just over $4 million between 2006 and 2016. “Once the State of Indiana took over the General Fund beginning in 2009, Oregon-Davis received two grants, called the Restoration Grant and the Small Schools Grant,” he explained. “They provided that grant in 2010 and 2011. Those are the years that Oregon-Davis’ General Fund funding spiked. From 2012 on, the State of Indiana eliminated those two grants. Consequently, the funding for Oregon-Davis Schools also decreased.” Meanwhile, a drop in O-D’s enrollment has meant even less money from the state.
However, Indiana school districts have the option to supplement their share of state funding by asking voters to approve a property tax increase. O-D did that back in 2012, and local residents approved a tax increase of up to 19 cents per $100 of assessed valuation. But with that increase set to expire in 2019, the school board now has to decide whether it wants to ask voters’ approval to renew it or possibly even raise the tax.
As for how that would impact local property owners, Bowsher presented a few different scenarios, including renewing the rate at 19 cents, or increasing it to 24 or 29 cents. If the 24-cent rate is chosen, an average homeowner could expect to pay almost another $17 per year in property taxes, while farm owners would see their annual taxes rise by 93 cents an acre. But even with the increase, Bowsher projects the corporation’s General Fund will still end up with a deficit of over $4.3 million by 2026.
He said that in order to break even, Oregon-Davis would need to raise the tax rate to over 49 cents. “The average home value would be impacted by $102.41 per year, $8.53 per month,” Bowsher said. “For each acre, it would be an additional $5.60 per year, 47 cents per month.”
Some property owners in attendance Wednesday pointed out that their land’s assessed value has increased significantly over the past few years, raising the schools’ income from property taxes in the process. However, Bowsher noted that assessed values of farmland are starting to decline and are expected to continue going down until 2021. However, the cost of running the schools will keep going up.
The Oregon-Davis School Board will decide whether to move ahead with the referendum and if so, at what rate, when it meets on December 11. Depending on the board’s decision, the question could be put before voters during the May 2018 election.
