Residents on both sides of the “Vote Yes” and “Vote No” yard signs will make their final decision on whether or not local students will be able to ride yellow school buses as the Nov. 5 voting deadline approaches.
The vote revolves around a referendum proposed by the Muncie Community Schools to increase property taxes to fund the school bus system.
“If our referendum doesn’t pass, we will not have yellow buses next year,” said Tim Heller, superintendent of the MCS system.
The proposed referendum imposes 39.39 cents per every $100 that is assessed for properties in Center Township for seven years in an effort to raise $3.325 million to cover the total cost of the contracts with M&M Bus Services.
“We felt we needed to go to our stakeholders, go to our taxpayers, give them the opportunity to vote on whether or not we continue the school bus service we have had for many years,” said Mark Burkhart, MCS chief financial officer.
The issue stems from a combinations of lower enrollment and a drop in property tax revenue.
Enrollment in the Muncie schools has been dropping consistently since 1970 when enrollment was 20,000 students. This year the system services 6,500 students.
According to a study by the Ball State Center for Business and Economic Research, Delaware County was the second most impacted in 2012 since the implementation of a tax cap and lost 36.09 percent of property tax revenue that it would have made without the cap.
The loss translated to 44 percent of the MCS’s total transportation fund, Burkhart said.
Burkhart also said only about half of property taxes in Center Township are able to be collected.
“There are two very large parcels that within our school district that are untaxed; Ball State University and Ball Memorial Hospital,” he said.
Although Burkhart revoked blame from the university, he said the 51 percent of individuals that do pay bear a heavier burden than other taxpayers.
Another part of the untaxed 49 percent originates from tax increment financing districts.
These districts reserve any revenue from property taxes to fund special projects in the area.
One of the biggest projects currently is the Village Promenade development area.
“They’re going to build a $60 million facility, but we won’t be able to collect on any of that,” Burkhart said.
The property that the development now sits on was assessed for $5 million before the old structure was demolished, all of which was taxed and helped fund the Muncie schools.
If the referendum passes, the school board will have to decide on a rate for each of the seven years that the referendum spans over.
The General Assembly also passed a protected tax law which will mandate that debt service funds, accounts that are reserved for paying an organization’s debt, be fully funded.
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