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Carmel Clay Schools says SEA 1 will cut district revenue by nearly $2.9 million annually; referendums may rise
Summary
Superintendent Dr. Tom Oestreich told residents that Carmel Clay Schools expects an annual revenue loss from SEA 1 of more than $2.9 million and outlined how the district's funding buckets, referendum reliance and capital plans could be affected.
Dr. Tom Oestreich, superintendent of Carmel Clay Schools, said the district will face growing fiscal pressure over the next seven years because of Indiana—s Senate Enrolled Act 1.
"Carmel Clay Schools is going to expect an additional loss of over $2,900,000 per year due to SEA 1," Dr. Tom Oestreich said during the joint town hall. He described the district—s funding structure and how the changes to net assessed value (NAV) and credits in the new law reduce local revenue used in the operations and debt-service funds.
Oestreich provided details about the district: about 16,000 students (last year—s data), 11 elementary schools, three middle schools and Carmel High School; roughly 2,350 staff, including about 1,100 teachers; 2,213 students qualifying for free and reduced lunch; and 2,358 students receiving special education services (about 14 percent). He said roughly 53 percent of the district—s funding comes from the state, 45 percent from local funding and 2 percent from federal sources.
He explained the distinction between market value and NAV, and noted state law prevents commingling the education, operations (local) and debt-service funds. Oestreich said the operations fund, which pays for buses, custodians, maintenance and other day-to-day needs, historically saw a 4 percent increase but will see a 0 percent increase under the new law—s assumptions, undermining the district—s ability to fund salary and benefit increases.
Oestreich warned that to maintain current services and facility plans the district could pursue higher local tax rates (referendum increases), raise debt to finance capital items currently paid with cash, or reduce services. He emphasized that salaries for teachers and staff cannot be shifted into debt-service funds under state law.
"We will need to reduce expenses by reducing services to students. We can raise more money through local taxes. Tax rates would need to increase to generate the same amount of money for the operating fund and debt service fund," Oestreich said.
He described next steps: the district will publish budget information on its business and finance website, provide monthly finance reports during school-board meetings, and enhance transparency as the district implements its newly approved three-year strategic plan. Oestreich also urged community support for voter-approved referendums, including a safety referendum planned for next fall, saying referendums have supplemented state funding since 2010.
He provided additional figures when asked by attendees: the district—s debt service is about $37,000,000, roughly 15 percent of annual expenses; the district has 11 buildings with Energy Star certification and reported $23,000,000 in cumulative energy-savings since 1995. Oestreich encouraged residents to attend board meetings, review the district—s financial reports and consider volunteering and supporting referendums.
