Board hears operating referendum briefing as Senate Enrolled Act 1 shrinks operations revenue

Northwest Allen County Schools officials on Monday briefed the Board of School Trustees on how recent state legislation will reduce local operating revenue and why the district is preparing an operating referendum for the Nov. 4, 2025, ballot.

Superintendent Barker and district finance staff detailed modeling prepared by Policy Analytics showing that Senate Enrolled Act 1 will lower net assessed value for the district, driving up tax rates while reducing available operations dollars and increasing the district’s exposure to circuit-breaker caps.

The board was shown draft referendum scenarios meant to restore lost capacity and cover proposed investments. District staff said they are planning referendum asks in the $10 million to $12 million range. In the district’s modeling, a $10 million annual levy would require roughly a 22-cent operating levy rate; a $12 million ask would be about 26 cents. Officials warned that net assessed-value changes built into the new law mean a $10 million approval could buy less over the eight-year life of a referendum and that a higher initial ask may be required to preserve buying power over time.

Why it matters: district staff said the operations fund pays for utilities, custodial services, transportation, insurance and other day-to-day building costs. Losses to the operations fund would force transfers from the education fund, cuts to services or both, they said.

Details from the presentation

- The district estimated it is about $8 million below the state average across the Education and Operations funds (about $4.39 million in operations and $3.56 million in education shortfalls from the state average as presented).

- Staff showed a midrange estimate that Senate Enrolled Act 1’s changes could cost the district roughly $1.7 million or more in the first year in operations revenue compared with prior law; an earlier Fiscal Office run initially estimated about $864,000 but district modeling with Policy Analytics showed a larger effect.

- The district’s staffing and program uses for operating-referendum revenue were presented in four buckets: recruitment and retention (salary and benefits increases and scale compression), Career and Technical Education (CTE)/alternative education staffing needed to operate a planned CTE facility, school safety and well-being (additional nurses, social workers, safety specialist, SRO coverage) and instructional support (elementary STEM teachers, high-ability teachers, instructional coaches, literacy/intervention hours and directors of teaching and learning).

- District staff said a set of salary and benefit moves to improve competitiveness would cost an estimated $4,230,000 (all-in salary/benefits) as part of the referendum uses shown to the board.

- Policy Analytics’ Barry Gardner explained the mechanics: “If you think about your property tax bill, there’s a gross assessed value, which is where you start, and then you have your net assessed value — that’s what you’re taxed on — and the new law increases deductions, which lowers the net assessed value.” Gardner’s presentation said those deduction changes (and a higher de minimis threshold for business personal property beginning in 2027) combine with new homeowner credits and circuit-breaker effects to reduce revenue for local units including school districts.

- The district modeled homeowner impacts for a median Perry Township home (2025 median used in the district’s slides, $330,000): the modeled homeowner tax liability fell modestly in the first year after the law but remains sensitive to assessed-value growth and to the size of any local referendum. In the district slides, passing a $10 million referendum translated to about $300–$540 per year on the homeowner examples used; a $12 million ask raised that range modestly.

Board action and next steps

No referendum resolution or levy decision was taken Monday. District staff said formal steps required to place an operating referendum on the ballot include an election-board update (scheduled for the May 19 meeting) and, if the board chooses to proceed, a June 23 meeting where the board must adopt a resolution authorizing the referendum and approve an annual revenue spending plan should voters approve the measure.

District officials emphasized that the referendum is the primary option to fund the new CTE facility, additional staff and safety and instructional supports presented; Superintendent Barker said without passing the referendum the district “cannot add the staff and the programming to that facility with our current budget.”

A timeline slide provided to the board showed staff will return with more detailed levy-rate modeling after the state and local agencies finish interpreting the new law and once fall assessed-value data are available. Lawmakers and district staff may still refine implementation guidance, the presentation said.

What the board heard but did not decide

Board members pressed staff on alternatives and asked whether the district had compared impacts to other growing districts; staff said district-specific parcel data and the district’s heavy residential composition make exact comparisons difficult and are still under analysis. Several trustees thanked staff and outside consultants for the modeling and analysis and said they appreciated the complexity of the choices.

Next meeting items listed by staff included an election-board update on May 19 and Department of Local Government Finance guidance; the June 23 agenda will include the formal resolution and annual spending plan if the board elects to proceed.