From the Fort Wayne News-Sentinel:
These should be the best of times for the Northwest Allen County Schools. Parkview Health's gleaming new $536 million regional medical center and the developments it has spawned have enlarged the tax base, attracting enough new residents to boost enrollment by more than 500 over the past four years.
For Superintendent Christopher Hinsel, teachers and more than 6,800 students, however, these may soon be the worst of times unless the district can overcome the unintended consequence of the state's four-year-old property tax caps and other unique demographic and legal circumstances largely beyond its control.
Added to the state Constitution by voters in 2009, the caps establish tax ceilings determined by individual properties' assessed value (no more than 1 percent for homes, for example), thereby protecting owners from unlimited rate increases and impeding too many bureaucracies' seemingly endless appetite for other people' cash.
A good idea, in theory. But Hinsel says NACS and some other school districts are suffering the unintended consequences.
“Of 293 (districts), we're the 19th worse-off,” said Hinsel, who said the district may be forced to eliminate transportation services unless state legislators or local voters provide relief from caps he insists punish NACS for having acted responsibly under funding laws as they existed prior to 2009.
With the caps in place, schools and other governments are able to exceed their maximum levy – the amount of property taxes they can collect – with the approval of voters. Fort Wayne Community Schools residents, for example, endorsed $119 million in capital improvements just last year. Because of various building projects between 1993 and 2008, however, NACS has about $130 million in loans to repay – but can't ask voters to help because the debt as assumed before the caps took effect. Hinsel estimates NACS could lose about $3 million in funding for capital projects and transportation in 2014 because of the caps.
“A legislator told me, 'It's not my fault you made poor decisions in 2003 and 2004,' ” Hinsel recalled. “But who knew in 2007 what would happen in 2009? The frustrating part is we followed the law (at the time).”
Complicating things further is the nature of the district itself. According to County Auditor Tera Klutz, residences account for about 65 percent of all property within NACS compared to 53 percent in Southwest Allen County Schools, 39 percent in East Allen and 27 percent in Fort Wayne. That matters because the commercial and industrial property more common outside NACS can be taxed at up to 3 percent of their value compared to the 1 percent for homes that comprise the majority of the NACS tax base.
And even that new $500 million hospital doesn't help much, since most of non-profit Parkview's property is tax exempt under federal law. The taxable value of Lutheran Hospital's property in southwest Allen County is about $138 million, Klutz said, but Parkview's property in Northwest Allen is valued at a little more than $56 million. As a result, Lutheran's annual county tax bill is about $4.02 million, while Parkview's is about $1.96 million.
To make matters worse, developers say lingering disputes between Huntertown and Fort Wayne officials over sewer issues complicate efforts to build the additional homes that would generate more taxes. And, Hinsel said, NACS could lose more than $2 million if Fort Wayne decides to annex land near Parkview. That, he said, could eliminate the district's capital improvement and transportation budgets altogether.
If that sounds overly dramatic, consider this: Citing the impact of the tax caps, Muncie Community Schools officials said they would have to discontinue bus service unless voters agreed to a tax increase. Last month, nearly 54 percent of voters rejected the idea.
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http://www.news-sentinel.com/apps/pbcs.dll/article?AID=/20131219/NEWS/131219603/0/SEARCH
