Property tax caps might be giving homeowners relief, but they are forcing some school districts to fall out of compliance with state bus replacement rules and to contemplate scrapping student transportation altogether.
Officials from Fort Wayne Community Schools, which operates about 350 buses traveling a total of 3.6 million miles a year, said they are feeling the pain as taxpayers within the city quickly hit the caps, and funding is sliced for public school budgets.
As revenue continues to decline, the district must maintain transportation services and keep up with replacing dozens of buses each year.
Other local districts say no school corporation is unscathed by the tax-cap laws, and at least one – Northwest Allen County Schools – has publicly discussed what parents and students might face if things don't improve – the loss of transportation entirely.
Indiana property tax caps were amended into the Indiana Constitution after being approved by Hoosier voters in November 2010.
The caps limit property tax bills to 1 percent of the assessed value of homes, 2 percent for farms and rental properties and 3 percent for businesses – saving homeowners money on taxes but creating challenges for taxing bodies, including school districts that depend on the revenue.
Rural school districts are more likely to have taxpayers who have not yet reached the tax cap, meaning the full amount charged by the district and other taxing bodies is paid by the taxpayer.
School districts in urban areas, where there are more taxing bodies, such as cities, are more likely to have taxpayers at or over the tax cap, so no matter what the district charges in taxes, it collects a smaller amount.
"When you consider the districts around us, you see that ours is the highest, which means we have the greatest potential that people will hit the cap quicker," FWCS Chief Financial Officer Kathy Friend said.
Districts use the revenue from taxes collected for two funds that provide bus rides for students: the transportation and bus replacement funds.
The transportation fund covers day-to-day operating expenses, and the bus replacement fund is used to replace school buses.
In recent years, Northwest Allen County Schools and Southwest Allen County Schools each has submitted and been approved for an increase to the property tax levy.
Once approved by the Department of Local Government Finance, the process sets a new maximum levy for the districts, allowing them to collect more taxes. SACS was approved in 2009 and NACS in 2012.
The approved levies should help both districts to keep up with the cost of buses and drivers needed to operate those buses in districts that have seen growth in the number of students attending and using school transportation.
As local districts pinch pennies to find a way to afford new buses and maintain those they already own, others around the state have begun the process of suspending services.
Westfield Washington Schools north of Indianapolis and Muncie Community Schools are the only Indiana school districts that have notified the state they will suspend service unless a change is made, according to the state Department of Education.
Districts must contact the Department of Education three years before ending transportation services, education department spokesman Daniel Altman said.
Muncie Community Schools officials decided to suspend transportation services after asking taxpayers to support a referendum that would have raised taxes but allowed the district to continue transportation. The referendum was defeated.
Altman said although only two school districts have announced plans to suspend busing services, many more are considering it.
As Northwest Allen began the budgeting process last fall, officials discussed eliminating transportation services if the tax caps continue to draw thousands of dollars away from the budget.
Although they've not moved forward with a formal request, the possibility remains, NACS Superintendent Chris Himsel said.
"We're going to continue to work on other options other than doing that, but the question is how do we minimize the level of the caps and cover expenses?"
Unless a change is made to tax-cap laws, the district may have no choice but to ask for a referendum or eliminate busing services, he said.
"The only reason we've been able to survive is because we've had good years," Himsel said, explaining that fuel prices have been calculated slightly higher than the actual cost, resulting in some savings. "That's allowed us to hold over for the next year. If it hadn't been for that, we would have to end the service."
And although cutting transportation services for FWCS students isn't an option, something will have to give, Friend said.
"We can't continue at the same level of service when we're not able to get enough revenue to do what we've done in the past," she said. "We can't do business as usual when funding is being cut each year."
Fort Wayne Community Schools has about 350 buses that transport more than half of the district's 31,880 students on more than 1,100 routes daily, officials said.
This year, FWCS has 45 buses that need to be replaced but will have money available to replace only 10, Friend said.
"Because of the circuit breaker, we're behind schedule 35 buses," she said. "We won't be on a 12-year replacement plan in Fort Wayne. We're looking at a longer replacement plan because we'll never catch up."
Although state law mandates buses are to be replaced every 12 years, buses that are a few years older are still safe for students to ride, Friend said.
FWCS buses are bought through a bidding process. Since October 2010, buses have been bought from MacAllister Power Systems of Greenfield.
"It's not a safety concern. We'll do whatever we need to make sure our buses are safe," she said. "It's the increased maintenance costs."
Himsel said most school buses have few problems until years nine, 10 and 11 when the district starts seeing an increase in repair records.
"If we have a bus that's older but has a good repair record, we might keep it as a spare for years 13, 14 or 15," Himsel said.
Northwest Allen transports between 65 percent and 70 percent of the district's 6,846 students on buses – a number that varies depending on after-school activities and the time of year.
The district has 109 routes and 61 drivers who averaged about 900,000 miles during the 2012-13 school year, officials said.
During budget discussions in October, NACS Business Manager Bill Mallers said the district had nine buses to replace but would have to move several buses off the list because there wouldn't be enough money in the budget to replace them.
Other local districts are facing similar challenges.
East Allen County Schools – which has a land area nearly as large as the three other local districts combined – has 158 buses that operate 124 routes an average of 8,400 miles a day, Transportation Director Mel Falkner said.
About 8,800 students ride the bus, Falkner added. The district wanted to replace about 24 buses, but budget constraints allow for only 12 or 13 this year, officials said.
Southwest Allen County Schools bus drivers log about 3,700 miles a day on 53 routes that begin by picking up and dropping off older students and then looping back to transport elementary students.
The district won't be able to replace the seven 12-year-old buses this year needed to transport more than 4,500 students daily, Business Manager Jim Coplen said.
"All of us in Allen County are kind of in the same boat," Coplen said.
"We're all being hit with the circuit breaker loss – it's just that some are being hit greater than others," he added.