Circuit Breaker (Tax Cap) Impacts for 2015 in Monroe County

16 Apr

The Indiana Department of Local Government Finance just released the report on circuit breaker impacts on local units of government for 2015. The report for Monroe County specifically can be found here.

The circuit breakers — also referred to as “tax caps” — refer to various statutory (and constitutional) limitations on the property tax responsibility of individual property taxpayers in Indiana. There are two types of circuit breakers: the 1%-2%-3% circuit breakers (which limit property tax liability to a certain percentage of assessed value) and the Over 65 circuit breakers (which limit property tax increases to lower-income seniors). I wrote about the circuit breakers for 2014 in more detail here and here.

As you can see in several of the charts below, 2015 saw a slight increase in the circuit breakers from 2014, compared to a substantial increase from 2013 to 2014. This is very welcome news to local units of government, many of whom were very concerned after the large increase in 2014.

The following table shows the amount of circuit breaker credits by circuit breaker type, by year, from 2010-2015.

Screenshot 2015-04-16 21.14.36

The following chart illustrates the same data graphically:

Screenshot 2015-04-16 21.26.35

One can easily make the following quick observations from these two charts:

  • Almost all of the increase in circuit breakers since 2011 come from the 1% (owner-occupied residences). This is not surprising, as Indiana’s property tax system is generally considered very favorable to homeowners (vs. other classes of property owners, such as businesses)
  • This means that our assessed values in Monroe County kept pace with property taxes
  • The circuit breakers for 2% (non-owner-occupied residential, agricultural, and long-term care facilities properties) and over 65 have been very stable over time (other than a dip in the 2% circuit breaker in 2013)
  • 2015 is the first year that Monroe County has seen any circuit breaker credits for 3% (commercial and industrial) properties — for a whopping total of $9
  • The overall increase in circuit breaker from 2014-2015 was very small, which will work to the benefit of local units of government (though not as good as a decrease, obviously!)

The following chart breaks down the impact of the 2015 circuit breakers by taxing unit.

Screenshot 2015-04-16 20.52.27

As this chart shows, only 3 units, Monroe County, City of Bloomington, and MCCSC saw circuit breaker increases of more than $10K. The Town of Ellettsville actually saw a $6702 decrease in its circuit breaker from 2014.

Summary of 2014-2015 Circuit Breaker Changes

  • County-Wide
    • Increase from $819,507 to $865,759
  • Monroe County Government
    • Increase from $153,018 to $164,157
  • County General
    • Increase from $111,920 to $120,905
  • Summary
    • Still an increase from 2014-2015 – but a very small increase\
    • Increased much less in 2015 than in 2014

Preview of Monroe County Council Meeting 2015-04-14

14 Apr
2014 Monroe County Council

2014 Monroe County Council

3:30PM Update: I just received a new agenda at 2PM that has one addition. The Council will be considering two resolutions related to non-discrimination. The new agenda is here: Council_Agenda_Amended_2015_04_14. The packet (above) hasn’t changed, and we have not yet received the text of either of these resolutions.

Original Posting: The packet and agenda for this Tuesday’s regular meeting of the Monroe County Council is now available: Council_Packet_2015_04_14. By the way — hopefully by next month we will have an updated photo of the Council that will include our newest member, Ryan Cobine!

This meeting looks like a long one! Here are some of the highlights:

  • The Prosecutor’s Office is requesting funding and approval to turn a part-time child support investigator into a full-time position. The costs of the position would be paid out of the General Fund and reimbursed around 2/3 by the federal Title IV-D program
  • The Highway Department is requesting an appropriation of $1,248,000 for the County’s Cumulative Bridge program for 2015. The Cumulative Bridge program, which supports all construction, maintenance, and repair of bridges not on state roads in the county, is funded by a property tax levy. By convention, the Cumulative Bridge appropriation for bridge projects for each year is not done during budget hearings, but instead is done through a separate request for an additional appropriation. The 2015 Cumulative Bridge detailed request, including specifics on the condition of Monroe County’s bridges, can be found here: 2015 Cumulative Bridge Program.
  • The Commissioners are requesting an appropriation of $968,000 (it was intentionally advertised high at $995K) for the prepayment of 10 years of software maintenance for the Spillman Computer-Aided Dispatch/Records Management System (CAD-RMS) software used by the 911 Dispatch Center.
    • The County Commissioners have already signed a contract for the 10-year agreement.
    • The appropriation requests have been advertised so that the council can take the funds out of either the General Fund, the Rainy Day fund, or some combination of the two.
    • This item has been somewhat controversial primarily because a 10-year agreement is unusual in local government in Indiana, and will probably engender heightened scrutiny by the State Board of Accounts. On the other hand, the agreement is highly fiscally favorable. The vendor (Spillman) has agreed to freeze the annual maintenance payment for the entire period of the 10 year agreement (as opposed to their usual 7% annual escalation), and provide 2 of the 10 years free. In addition, the payments start after 10 years at what they would have been in 2013. This results in an inflation-adjusted savings of around $475K over the 10 year period, and around $1.5M over a 20 year period.
    • The costs will be split 50-50 between the City of Bloomington and Monroe County, based on the current interlocal agreement between the two parties, which is just now being renegotiated. It is likely that the County will seek some additional compensation (in the form of interest) from the City for funding the prepaying up front (essentially loaning money to the City).
  • The Commissioners are also requesting an additional appropriation of $75,000 for the contract that they signed with the accounting firm Hartman and Williams to sort out the reconciling problems in the Treasurer’s Office. This is in addition to $75,000 that has already been spent on this effort.

In addition, the Council will be appropriating funds received from several grants, including: Homeland Security training grant, light tower trailer for emergency management, and Title X family planning funds to operate our Futures Family Planning Clinic for an additional year.

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. Public comment will be taken. Hope to see you there!

Indy Star Article Asks if Local Ordinances Really Protect LGBT Residents — And Points Out Caveats in Bloomington Ordinance

6 Apr

Good article in yesterday’s Indy Star following the intense attention to RFRA and its possible effects: Do local laws really protect rights of LGBT Hoosiers?

The second paragraph of the article summarizes its conclusions:

“But even though Marion County and 10 other Hoosier communities already have local nondiscrimination ordinances that include sexual orientation, experts say such protections can be so weak that they are virtually unenforceable.”

The article points out the communities that have some local regulations that protect LGBT residents:

  • Indianapolis, Marion County, West Lafayette, New Albany, South Bend, Evansville, Bloomington, and Monroe County all have local ordinances that protect both sexual orientation and gender identity
  • Terre Haute, Michigan City, Lafayette, and Tippecanoe County have local ordinances that protect sexual orientation but not gender identity

The upshot of all of this discussion is that protections against discrimination based on sexual orientation and gender identity must be added to statute in order to ensure legal enforceability of these protections — and we need to continue to press our representatives in Indianapolis to do the right thing. However, I do leave this discussion wondering if we really need to be so deferential to a potentially over-cautious interpretation of home rule in Indiana.

The local human rights ordinances in Bloomington and Monroe County can be found here:

Public-Private Partnerships and the Proposed Indianapolis Justice Center

15 Mar

Interesting article in yesterday’s Indy Star about the $1.75B justice complex being proposed for Marion County: Weighing the scales: $1.75B justice center could be a bargain or a boondoggle.

The article in the Indy Star is less about the justice center itself (which nearly everyone seems to agree is needed) than about the procurement method being selected to build and operate it — so-called performance-based infrastructure. This is a form of public-private partnership (often called P3) that will be familiar to Monroe County residents, because it is being used for construction and operation of I-69 Section 5 (I have written about P3 used for Section 5 here). It has already been used as well for the Ohio River Bridges project near Louisville (and note that this method is NOT what was used with the Indiana Toll Road).

Per the studies cited in this article, the results of performance-based infrastructure (PBI) have been mixed. However, the most interesting aspect to me from a public policy perspective is how dependent these cost-benefit analyses (comparing the performance-based infrastructure procurement method against the traditional method, where the government bids out the construction, bonds for the funding, and then operates the facilities) are on the assessment of risk. Depending on how much risk you build into your cost-benefit model, the savings from performance-based infrastructure can be made to appear much larger or much smaller. This is because one of the primary benefits from PBI is that the contractor absorbs cost and schedule overruns (along with other risks), not the government. However, how much actual risk is avoided can often (always?) be a matter of disagreement and dispute.

This also leads to another question: how do you fairly assess the success of such a project after the fact? Once the project is completed, the risk that was avoided is obviously no longer a factor. But did the government still get the benefit of avoiding a risk of an event that wound up not happening anyway? Did you get the benefit of having car insurance last year even though you didn’t have any accidents or making any claims?

In any case, the article is worth reading. We will undoubtedly be seeing more, not less, of these P3/PBI deals, as local and state governments continue to try to build and operate infrastructure with flat or diminishing tax revenues.

Preview of Monroe County Council Meeting 2015-03-10

8 Mar

Karst Farm GreenwayThe packet and agenda for this Tuesday’s regular meeting of the Monroe County Council is now available: 2015-03-10 Council Meeting Packet

Here are some of the highlights:

  • The Parks and Recreation department is requesting funding so that they can maintain the County’s active transportation/greenway system. This year has seen the completion of the Karst Farm Greenway Phase 1 and the beginnings of Phase 2A. More will be done by the end of the year. The Parks request is for an additional park maintenance technician position along with some maintenance supplies, in order to maintain the trail network (mowing, snow and ice removal for the paved trails, trash removal, cleanup, etc.).  These maintenance costs are expected to be an ongoing expense.
  • The Commissioners are requesting the appropriation of the remaining balance on the 2013 General Obligation bond (initially approved in 2013, and paid off in 2014). I have written about this bond before here. This appropriation will be to complete several of the projects that the bond was originally approved for, including a jail remodel and new control panel, county archives, solar panels for the justice building, and survey work/land acquisition for the Karst Farm Greenway.
  • The Prosecutor is asking for the appropriation of a grant provided by the Indiana Criminal Justice Institute for victim assistance staff.
  • The Airport is asking for the appropriation of $70K for a local match for a project to install wildlife skirting to our airport’s perimeter fence. The entire project is estimated to cost $1,209,000, and would be reimbursed 90% by the Federal Government and 5% by the state. The airport is also requesting an additional appropriation of $10K for the air traffic control tower operation contract, due to a calculation error during the 2015 budget process.
  • The county legal department is requesting funding to pay the county’s portion of the software maintenance costs for the new Spillman software used in the Unified 911 Dispatch Center.
    • The appropriation has been advertised at $484,000, which would essentially prepay the County’s half of the annual software maintenance fees for 10 years.
    • The vendor (Spillman) is offering a significant discount if the city and county pre-pay for the maintenance.
    • However, at the last work session, many council members, including myself, expressed concern with locking ourselves into a 10-year software agreement with the vendor. It is likely, therefore, that the council will reduce the appropriation before approving it on Tuesday.
    • In addition, because of the magnitude of the request ($484K), the council advertised the appropriation out of both the Rainy Day and the General Fund, in order to give the council maximum flexibility. However, with a potentially reduced appropriation (say, for only one year, rather than the full 10 years), it is unlikely that the council will support appropriating out of the Rainy Day fund.

This meeting will begin at 5:30PM on Tuesday in the Nat U Hill Room of the Monroe County Courthouse, and public comment will be taken. The meeting will also be broadcast live on CATSTV (County Channel).

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

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