Debt Law Forcing Schools to Weigh Bus Service Cuts ; Tax Cap Also Slices into Many Budgets

Article excerpt

INDIANAPOLIS - School districts across Indiana have begun notifying the state Department of Education that they will stop offering bus service in three years unless a tax issue that will cost some up to 90 percent of their transportation funding is resolved. A 2012 law that takes effect this year requires that public school districts apply their property tax revenue to debt payments before other expenses. In the past, districts could spread the money over several funds, including debt service, pension debt, capital projects, transportation and bus replacement.

Many districts already strapped for cash because of statewide property tax caps say they won't have any money left after they make debt payments.

Nearly 60 school corporations across Indiana will lose at least 20 percent of their tax revenue, and five will lose 90 percent, the Indianapolis Business Journal reported.

State law requires districts to provide three years' notice before ending transportation. Muncie schools, which will lose 90 percent of their transportation money, applied for a waiver from that requirement after voters rejected a referendum that would have funded buses. …