State Public School Funding — How Does Monroe County Stack Up?

26 Feb

I along with other local government officials from around the state just had the opportunity to hear Dr. Larry DeBoer, professor of agricultural economics and renowned expert on local government finance, give his annual update on the Indiana State Budget (for budget years 2015-2017), sponsored by the Purdue Cooperative Extension Service. Here are the handouts from Dr. DeBoer’s presentation: Deboer State Budget 2015-2017 Presentation.

While the entire presentation is incredibly well-done and invaluable for anyone interested in understanding discussions in the media and in the statehouse on state budgetary issues, I wanted to call attention in particular to his discussion on K-12 funding, on pages 13-15 in his presentation, and compare his numbers overall to Monroe County’s in particular.

I’m not going to go into the long and tortuous history of school funding in Indiana. However, I recommend that anyone and everyone read a blog posting that appeared in Chalkbeat Indiana in January: The basics of school funding in Indiana: Difficulty defining fairness.

In brief, funding for the operations (i.e., general fund) of public school corporations is provided by the State of Indiana. Other funds, including transportation, school bus replacement, capital projects, debt service, and pension debt are still provided entirely by local property taxes. In addition, communities that have passed operating referendums (such as for the Monroe County Community School Corporation) also contribute local property taxes as well.

The amount of funding that the state provides to local school corporations is made up of three parts:

  • the basic tuition support (which used to vary wildly from school corporation to school corporation based on the history of funding for the corporation, but are now varies much less, through a process called “transition to foundation revenue”). Eventually the goal is to have every school corporation receive the same basic tuition support per pupil.
  • categorical grants, which include the:
    •  honors grant (for each student who received an academic honors diploma or a Core 40 diploma with technical honors),
    • special education grant (based on the count of students enrolled in special education programs)
    • career and technical education grant (based on the number of students enrolled in career and technical education programs that are addressing areas of labor market demand)
    • full day kindergarten grant
  • complexity grant, which is distributed to schools based on the numbers of low-income students who attend. This grant used to be based on the number of students who participated in the Federal free and reduced lunch program; however, it is now based on the number of students who receive textbook assistance (a state measure, rather than a federal measure).

As Dr. DeBoer’s graph on page 14 shows (and I have reproduced below), almost all the overall variation in school funding per pupil is now based on the complexity grant. The basic tuition support and categorical grants are largely even from the highest-funded to the lowest-funded public school corporations in Indiana.

DeBoer School Funding 2015

So my real purpose in writing here was simply to try to show where we are here in Monroe County with respect to state funding. Dr. DeBoer was kind enough to provide me with the raw dataset that he received from the Indiana Department of Education. Below are the funding amounts for the Basic Tuition Support, Categorical Grants, and the Complexity Grant per pupil for the three school systems in Monroe County: the two traditional public school corporations, Monroe County Community School Corporation and Richland-Bean Blossom Community School Corporation, and the Bloomington Project School, our only charter school in Monroe County.

I also included the school corporations with the highest and lowest per-pupil funding in the state for comparison, as well as the average and median total funding amounts per pupil. Interestingly, although our relatively low complexity grants for our schools in Monroe County put us below the average and median per pupil funding overall in the state, within Monroe County our complexity grants are relatively similar, and our categorical grants actually separate us a bit more. In addition, one can see here that the Bloomington Project School has the lowest complexity grant in the county (again, based on number of students eligible for textbook assistance) and MCCSC has the highest, although RBB’s is very similar.

Per Pupil 2015 State Funding in Monroe County

Per Pupil 2015 State Funding in Monroe County

Finally, I essentially re-created Dr. DeBoer’s stacked bar chart (above) to show where the three Monroe County school corporations stood visually, compared to the rest of the state. Like Dr. DeBoer, I excluded charter schools from the chart, EXCEPT that I included the Bloomington Project School.

2015 State Funding Per Pupil for Indiana School Corporations, with Monroe County Systems Labeled

2015 State Funding Per Pupil for Indiana School Corporations, with Monroe County Systems Labeled

Hope someone finds this visual representation of where state K-12 funding for Monroe County systems stack up useful. And thank you to Dr. DeBoer for providing his state funding dataset.

Update 2015-02-27

A reader asked for more detail on the categorical grants, and wanted to find out if the special education grant explained the larger per-pupil funding received by the Bloomington Project School. Indeed, that is the case. Here is the detail:

2015 Categorical Grants for Monroe County School Systems

2015 Categorical Grants for Monroe County School Systems

And here is the same data in a stacked bar chart form:

2015 Categorical Grants for Monroe County School Systems

2015 Categorical Grants for Monroe County School Systems

This also makes intuitive sense, since parents often choose charter schools because their children are experiencing difficulties in the traditional public school corporations (indeed I made that choice myself as a parent for my son for 7th and 8th grades).

2015 Monroe County Budget Order — Property Tax Rates and Budgets Approved

18 Feb
Monroe County Courthouse at Night

Monroe County Courthouse at Night

Yesterday, Monroe County received its budget order for 2015 from the Indiana Department of Local Government Finance. This means that the Department of Local Government Finance has approved for Monroe County:

  • The budgets for all taxing units (i.e., county, cities and towns, school districts, townships, public library, special units)
  • The property tax levies and tax rates for all taxing units
  • The property tax rates for each taxing district (i.e., the tax rates that actually affect each property owner)

As with last year, the  budget order doesn’t really offer any big surprises. Rates for some taxing districts have gone up slightly, and others have gone down slightly. As in previous years, tax rates in Ellettsville taxing districts are highest in the county (other than the tiny commercial-only piece of Richland Township that is in the City of Bloomington corporate limits). Bloomington tax rates are next, though still substantially lower than those in Ellettsville. Tax rates in the unincorporated areas, not surprisingly, are the lowest, with those in Washington Township still the lowest in Monroe County.

Several weeks ago I produced a chart that shows the overall tax rates for all of our taxing districts along with the individual unit tax rates that make up the overall rate, using 2014 data. I’ll produce a new chart with 2015 data shortly.

The full budget order can be found here: Monroe County 2015 Budget Order

Redevelopment of Concrete Jungle around Lafayette Square? And an aside on Community Revitalization and Enhancement Districts (CRED)

15 Feb

The Indy Star’s columnist Erika Smith reports on a $2.7M investment over 3 years that the City-County Council just approved for the Lafayette Square area (West 38th Street):

I’ve always found this area (Lafayette Sq in Indy) fascinating in kind of an urban-wasteland sort of way. It will be interesting to see what they are able to do with this CRED investment. With that much already built environment, it will be a tall order for redevelopment. I like the idea of taking up a lot of the unused concrete and putting in grass and trees.

Incidentally this effort follows a kickoff last year to a major rebranding effort for the whole Lafayette Square area that includes gateway sculptures, sidewalk connectors, wayfinding markers, and bus shelters. The architectural firm Schmidt and Associates (which has also done some impressive work in Bloomington, and is responsible for the amazing Mass Ave redevelopment in Indy) is the lead designer. The Indy Star published a picture of one of the gateway markers: Lafayette Square area: Passport to the world.

Fiscal Aside:

The money will come from a mix of local funds, grants, and private investments, and will be funneled through the Local Initiatives Support Corporation. $800K will be provided through revenues raised from the Lafayette Square Community Revitalization and Enhancement District (“CRED”), which captures some state income tax, county option income tax (COIT) and sales tax generated in the district. CREDs are sort of like TIF districts (except that the revenue source is income and sales tax, rather than property tax), and are available for investment in downtown areas and investment in areas that have been severely impacted by an economic downturn or loss of a major employer. Qualified investments in CREDs also entitle the investor to a 25% tax credit (if approved by the Indiana Economic Development Corporation and if the investment is not simply moving operations from a different part of the state).

The first CRED was actually established in Bloomington, in order to redevelop the site vacated by Thomson Consumer Electronics. Now, there are around 9 CREDs around the state, including a second CRED in downtown Bloomington.

References: 

Here are a couple of other interesting references on CREDs:

Where are the property taxes highest or lowest? 2014 Tax Rates by Taxing District in Monroe County

8 Feb

As we wait for our final budget order (and property tax rates) for Monroe County for 2015, I started playing around with different ways to present property tax rates for the various taxing districts and taxing units in Monroe County, and came up with the following chart. This chart show the total property tax rate (per $100 of net assessed value) for each taxing district in Monroe County. A taxing district is a geographic area in which the property tax rates are the same. The total property tax rate for each district is broken up by the contribution of each type of taxing unit to the total. Types of taxing units include the county, municipalities (Bloomington, Ellettsville, Stinesville), school corporations (MCCSC and RBBSC), townships, fire protection districts (Perry-Clear Creek Fire Protection District), public library, waste management, and transportation (public bus).

Property Tax Rates by Taxing District

I’ve ordered the taxing districts from highest to lowest rate. The conclusions are pretty straightforward — you pay higher property taxes in municipalities than in unincorporated areas, and that Ellettsville property tax rates are higher than Bloomington’s. The lowest property tax rates in Monroe County are in Washington Township, in the north-central part of the county.

Here is the table of data that I used to generate the chart:

2014 Property Tax Rates by Taxing District

I have previously written about taxing districts and property tax rates in my update on the 2014 Monroe County Budget Order.

End of the Year Fiscal Update for Monroe County Government

30 Jan

At last week’s Monroe County Council work session, I gave a presentation to the council and the public on the fiscal state of Monroe County Government as of the end of 2014, particularly from the perspective of the county’s primary general operating funds — the General Fund (property tax) and the County Option Income Tax (COIT) fund (income tax), as well as the Rainy Day fund (essentially, our savings account).

In short, the county’s financial position is strong. The most important slide in the presentation was the following, which summarizes the two general funds (property tax and income tax) as well as the Rainy Day fund:

2014 General Funds Summary

Although the County had $2.2M less in cash on hand at the end of 2014 as it did in the beginning, this was due primarily to planned spending on one-time capital expenses, including $1.8M to equip the 911 Dispatch Center and $155K for the Monroe County Urbanizing Area plan. In addition, because settlement (the process by which the property tax collected by the county gets distributed to all of the taxing units that receive property tax) was not complete by the end of 2014, the county only received 95% of the property tax it should have received  for the second half of the year. The remainder will be paid in 2015.

A couple of other important findings in the report:

  • We paid out approximately $200K in expenses that did not by law require an appropriation by the Council. These expenses include special prosecutors, certain election expenses, elected official travel to certain state-mandated meetings, and State Board of Accounts audit expenses. This $200K per year number is relatively stable from year to year, so my recommendation is that the Council budget that amount per year, even though we don’t have any control over it.
  • Both general funds (property tax and income tax) end the year with healthy balances. The general property tax fund required a transfer of $2.7M from rainy day to stabilize it after several large one-time capital purchases over the last several years (Johnson Hardware Building, 911 Dispatch Center equipment, and the Monroe County Urbanizing Area plan).
  • We still have a $3.3M balance in the Rainy Day fund, which gives us a buffer in case property tax settlement continues to be delayed, or if income tax should take an unexpected nosedive.
  • County departments reverted (i.e. didn’t spend) approximately $1.3M of their appropriations in 2014. $605K of this was in personnel. Personnel reversions also appear to be quite stable from year to year. Personnel reversions generally occur because of employee turnover. When a position is vacant — even for a day —  it leaves unused personnel (salary and benefits) appropriations. Even when that position is filled, it is generally filled with someone whose salary is at the entry level for that classification — creating more reversions. The council was in general agreement that departments should transfer any of their unused personnel appropriations before requesting any additional appropriations towards the end of the year.
  • The circuit breakers (tax caps) are taking an increasing (but still not yet alarmingly large) bite out of property tax revenues in Monroe County. I have written about circuit breakers before here and here.

The last slide in the presentation summarizes the 2015 budget that the Council adopted in October:

2015 Budget Summary

As this chart shows, the budget that was passed is a balanced budget (actually, is about $122K in surplus). However, there  are a lot of things that this small surplus doesn’t take into account both good, like the additional 2014 property tax revenue that we will receive in 2015, as well as 2015 reversions, and bad, like the circuit breakers and any additional appropriations that we might have to make beyond what was budgeted for 2015.

The entire report can be found here: 2014 Budget Wrapup Presentation G McKim

Preview of Today’s Monroe County Council Work Session (2015-01-27)

27 Jan
2014 Monroe County Council

2014 Monroe County Council

Tonight’s work session of the Monroe County Council will feature several substantive issues for discussion. The packet with narrative descriptions of each of the issues can be found here: 2015-01-27 Work Session Packet

Very briefly, the major issues to be discussed are:

  • The Health Department is asking to offer health insurance its public health nurse position, which is currently split by two people in a job share. Both positions are half-time on their own, and do not currently receive county benefits.
  • Human Resources and the County Commissioners are asking extend county retirement benefits (through the Public Employees Retirement Fund – PERF) to all elected officials. Currently the County Commissioners, County Council, and Coroner are excluded. The overall list of PERF-eligible positions is also out of date and must be updated.
  • The County Highway department is asking whether snow and ice supplementary pay should also be extended to non-union Highway employees who are also required to forgo vacations during the snow and ice season.
  • The County Commissioners will provide an update on possible funding mechanisms for the major energy upgrades being planned
  • Parks and Recreation is presenting their proposal for an additional appropriation (for 2015, and then again annually thereafter) to fund the maintenance of the Monroe County Active Transportation (Greenway) network. I’m very excited about this presentation, and about several of the trails initiatives that are on the horizon.

In addition, there will be several financial issues up for discussion, including the Auditor’s decision not to prorate the final payroll of the year that straddled 2014 and 2015, a financial update on 2014 from me (I’ll post my presentation as a separate blog entry) and the Council President’s discussion of the Council Office and general meeting procedures.

As always, the meeting is open to the public, and will be held tonight at 5:30 in the Nat U Hill room of the Monroe County Courthouse, and it will be broadcast on CATS.

City of Bloomington Economic Development Commission Meeting Today

23 Jan

Today, the City of Bloomington Economic Development Commission (EDC) will be meeting at noon (2015-01-23 at 12:00PM) in the Hooker Conference Room in City Hall. There are 3 substantive issues that will be covered in the meeting — issues that might be characterized as the good and the ugly in economic development. Unfortunately I don’t have a lot of time to write about this in much detail before the meeting, but will update the public afterwards.

1. Big-O properties (principal Mary Friedman, Bloomington) is requesting a 3-year tax abatement for a mixed-use project at 338 S Walnut Street. I have written about this project extensively before here (City Tax Abatement Request for Mixed Use Building 338 S Walnut St). They are coming back before the EDC because they are requesting to change the plan a bit — to reduce the amount of retail square footage on the ground floor from 2500sf to 1663sf to make room for bicycle storage (in order to make the bedroom to bicycle storage ratio 1:1). This abatement request will need to be approved by the City Council.

2. Cook Pharmica is requesting a 10-year personal property tax abatement for a significant expansion to their vial and syringe-filling business unit. They are proposing to invest $25M in new equipment, which will result in the creation of 70 new jobs, with $3.2M in new payroll. All wages would (and would be required to) be compliant with the City’s Living Wage Ordinance. The jobs would be created between 2015 and 2020. Cook Pharmica is also investing several million in the building to accommodate this expansion; however, they are only requesting the tax abatement on the personal property improvements (the equipment), not the real estate improvements.

The abatement is requested as a 70% abatement over 10 years. The 70% figure was chosen because Cook Pharmica could alternatively take advantage of an automatic 10-year Urban Enterprise Zone tax abatement, which also results in a net 70% savings on the personal property taxes resulting from their new investment, but distributes the remaining 30% to the Bloomington Urban Enterprise Association, the City’s Redevelopment Commission, and the Indiana Economic Development Corporation. Structuring their request as a 70% abatement on personal property tax instead keeps the 30% as being distributed to the taxing units serving the property (i.e., City of Bloomington, Monroe County, MCCSC, Monroe County Public Library, etc.). This abatement would need to be approved by the City Council.

3. Between 1986 and 2012, the City issued business loans through the Bloomington Investment and Incentive Fund (BIIF). There are 5 outstanding BIIF loans, of which 4 are current. The remaining loan was made to XfiniGen — a company that proposed to build the “next generation lithium batteries for large scale energy storage applications”, and proposed bringing 107 jobs to Bloomington. The company folded, and has left $37,464.07 in principal outstanding. Their last payment was in November 2013. The City is proposing that this remaining debt be written off, as there is little to no chance of collection. The memo in the packet about this situation provides some more detail about the company and the City’s attempts to collect the debt.

The full packet can be found here: Bloomington EDC Packet 2015-01-23

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