How deep and broad is the community’s commitment to the Duneland Schools?
The Duneland School Board could try to answer that question in the primary
election on May 8, in the form of a referendum on a new property tax.
The School Board has made no decision yet but Superintendent Dirk Baer told
the Chesterton Tribune on Thursday that the choice comes down to
this: either an additional revenue stream to make good on a multi-million
dollar shortfall in the state’s funding of the General Fund—the “heartbeat”
of the Duneland School Corporation, which pays salaries—or the elimination
of numerous programs and the teachers and staff who run them.
The public will have two chances next week to hear the case for a referendum
and then to offer input on it: at 7 p.m. Monday, Feb. 6, and at 7 p.m.
Thursday, Feb. 9, at the Chesterton High School auditorium, 2125 S. 11th St.
After a presentation on the issue, attendees will be broken into small
groups in the cafeteria and their comments and questions recorded. Those
records will then be tabulated and the results released at a later date.
But the School Board—if it opts to pursue a referendum—must do so no later
than its meeting on Monday, Feb. 13.
At issue is the General Fund (GF) only, 86 percent of which pays for faculty
and administrative salaries, 6 percent for special education, and the
balance for basic operating costs, like utilities and classroom
instructional supplies. “It’s the ‘people fund,’” as Baer put it.
Until 2008, the GF was funded chiefly through property taxes. But in a
public policy shift that year, the Indiana General Assembly enacted
legislation under which the State of Indiana funds GF’s itself, the idea
being to unburden property owners.
GF funding is now done according to a funding formula based on “average
daily membership” and “free or reduced lunches,” both of which measures put
the Duneland School Corporation (DSC) very nearly at the bottom of all
school districts in the state, Baer said.
The average amount paid by the state per student in the most current
year is $5,664. Compare that average to the amount paid per student in the
Gary schools: $8,411.
Now compare it to the amount paid per student in the Duneland schools:
$4,971. That figure puts the DSC in the “bottom 5 percent” of all schools in
the state, including charter schools, Baer said.
But the real crisis hit in January 2010, Baer said, when the state—giving
only 30 days’ notice—told the DSC that its GF would be cut by 4.56 percent
The DSC scrambled last year to make the cuts, Baer said. Through attrition
it reduced staff by more than 30, including administrators, teachers, and
support staff. It restructured the Alternative Education and Positive Life
Programs. It reduced hours for classified staff and put 12-month employees
on furlough. It reduced professional development and travel expenses. It
ended DSC’s subsidizing of full-day kindergarten and summer school. And it
reduced instructional supplies. Meanwhile, salaries have been frozen since
But the long-range projections are awful, Baer said, despite the fact that
the DSC’s teachers have agreed to a salary-schedule freeze through 2016.
Utility costs will escalate, as will healthcare costs, and in 2012 the 2010
deficit of $1.5 million is expected to increase to $3.35 million; in 2014,
to $3.96 million; in 2016, to $5.41 million; in 2019, to $8.4 million.
And so, then, there’s the choice faced by the School Board, Baer said: to
make “Draconian cuts” to the programs “for which the Duneland schools are
known for,” like speech and debate, music, and advanced placement.
Or else to raise revenue, in the only way permitted by the General Assembly:
through a property-tax, which the voters in the Duneland School Corporation
would have to approve in a referendum.
If the School Board opts to pursue a referendum, it would probably look like
this on the ballot on May 8: “For the seven calendar years immediately
following the holding of the referendum, shall Duneland School Corporation
impose a property-tax rate that does not exceed 22 cents ($0.22) on each one
hundred dollars ($100) of assessed valuation and that is in addition to all
other property tax levies imposed by the school corporation.”
What would the actual impact of a 22-cent per $100 of assessed valuation
Baer answered that question by noting—first of all—that the owner of a home
with an AV of $100,000 does not pay any property-tax—municipal, county,
etc.—on the full $100,000. That $100,000 AV is first cut to $55,000 by the
homestead deduction, then to $35,750 by a supplemental deduction, then in
some cases to $32,750 by an additional mortgage deduction.
So a home with an AV of $100,000 would actually pay—if the referendum is
approved—a property tax equal to this formula: 22 cents multiplied by
$327.50—that is, $32,750 divided by $100—for a total tax in a given year of
Or, Baer broke it down still further, around $6 per month.
The owner of a home with a median AV would pay a property tax for the GF of
$185 per year or $15.39 per month. The owner of a $200,000 home, a tax of
$215 per year pr $17.92 per month. The owner of a $300,000 home, a tax of
$358 per year or $29.84 per month.
Now, property owners—right now—continue to pay property taxes to the DSC. In
2011 they paid a total rate of $0.8552 for several line items not covered by
the General Fund: debt service; capital projects; transportation; and bus
But over the next several years, the DSC will finish payments on two debts
in particular: a $13 million loan secured in the wake of the Bethlehem Steel
Corporation bankruptcy; and a bond issued to fund teacher pensions. The
loan—which accounts for a tax rate of $0.03 per $100 of AV—will be retired
at the end of this year. The bond—which accounts for a rate of $0.09—will be
retired in 2017.
And the practical consequences of those debts being retired is this: that a
new property-tax rate of $0.22—if approved by referendum—would, in effect,
hit property owners beginning in 2013 as one of $0.19 and then in 2017 as
one of $0.10.
Nuts and Bolts
Baer noted that, if the Duneland School Board opts to pursue the referendum
and it fails in the May 8 primary, it would have to wait another year before
trying one again.
And because 2013 is not an election year, the DSC would have to pay for a