From the Lafayette Journal and Courier:
Local school districts are taking advantage of a one-time, interest-free loan meant to recoup losses to their capital projects funds.
Government entities — including school corporations, towns and counties — are being offered the loans to compensate for funding lost due to a calculation change made by the Indiana Department of Local Government and Finance.
Each year the department determines a cap for the Capital Projects Funds of school districts and other taxing units. But several years ago the department changed its approach to the formula and began using a negative number instead of a zero for decreased assessed value.
“Back a year ago they did it one way, and then they changed how they did it,” said Ross Sloat, business manager for the West Lafayette Community School Corp. “Now there’s a kick back."
“If you have a negative factor, it’s a convoluted way it comes out. It just didn’t allow us to get the maximum amount we could have.”
In 2010, DeKalb County Eastern Consolidated School District and the Metropolitan School District of Pike Township both filed appeals in the Indiana Tax Court. The court sided with the school districts, saying that the department’s interpretation was not correct.
The department requested a review of the Tax Court’s decision, a request that was overturned by the Indiana Supreme Court.
Legislation was passed in 2011 affirming the department’s approach to the formula, something that caught school officials by surprise.
“Somehow the DLGF got back into the legislation that the calculation could be done using a negative number, and none of us knew that was coming,”said Tippecanoe School Corp. chief financial officer Kim Fox. “It’s one of those things that slipped under the radar.”
School leaders took to their legislators to complain, and the 2012 General Assembly wrote a quick fix in the form of the loan which will replace the funding the districts would have received without the department’s reduction.
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Based on new legislation, the department must resume using zero in its calculations next year, meaning the problem should be fixed moving forward.
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http://www.jconline.com/apps/pbcs.dll/article?AID=2012306220034&nclick_check=1
