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Serving: IN

What you should know about property tax referendums

Tom J. Bechman school building in Edinburgh, Indiana
APPROVED REFERENDUM: Taxpayers approved an operating referendum in the May election for Edinburgh schools.
Experts say each one should be evaluated on its merit.

No one likes higher property taxes. But what most people like even less is paying taxes levied by a government unit when they didn’t have a chance to make their voice heard.

Bob Cherry, one architect of Indiana’s remonstrance process, says current Indiana statutes are structured so both those wanting more operating funds or a new building project and those against it decide the issue on a level playing field.

Cherry, Greenfield, a longtime state representative and former legislative specialist with Indiana Farm Bureau, says, “We didn’t want governmental units to be able to use taxpayer money to advocate for a project that would ultimately raise the taxpayer’s tax bill. So, a government unit can’t promote a project using taxpayer funds.”

When a referendum appears on your local ballot, questions arise. These answers to basic questions are based upon information from Cherry, Katrina Hall of Indiana Farm Bureau and the Department of Local Government Finance website.

What triggers a controlled project referendum? A referendum for a construction project, such as a school building, is triggered when the amount exceeds a certain level. That was once a set amount, but today it can also be 1% of the total assessed valuation within the taxing unit, if that’s lower than the current set amount in Indiana law. Some school districts have lower assessed valuation than others, and what might be a small project for a large corporation could be a big project, raising taxes for taxpayers by a significant amount. This percentage circuit breaker means rural schools with lower total assessed valuation may need to engage in the referendum process at a total dollar level lower than what might trigger a referendum for a larger school.

What triggers an operating referendum? Anytime a school or other taxing unit requests operating funds for salaries or any purpose above their normal budgeted amount, they must pursue a referendum.

How often is a referendum required? A construction project referendum is a one-time event. An operating referendum must be repeated. Current statue calls for repeating the operating referendum every eight years.

How did school referendums fare this year? Three construction referendums and five operating referendums were on the May election ballot in Indiana. Two of the three construction referendums failed, while all five operating referendums passed. Construction referendums failed for Franklin Township Schools in Marion County and Vigo County School Corp. but passed for Lebanon schools. Operating referendums passed for Edinburgh, Lebanon, Griffith, Valparaiso and Perry Township Schools, Marion County.

Hall notes that historically, operating referendums have a higher pass-fail rate than construction referendums. Note that two referendums passed for Lebanon Community Schools. Edinburgh school officials plainly stated before the election that if the referendum didn’t pass, the school would likely seek consolidation with another school.

How can I learn more? Visit the Department of Local Government Finance. You can find information about all past referendums. Information for current referendums will be listed once properly filed.

Comments? Email tom.be[email protected].

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