Outside analyst: SEA 1 will lower MCCSC referendum revenue, prompt referendum timing decisions

Policy Analytics consultant Barry Gardner told the Monroe County Community School Corporation board on Oct. 28 that Senate Enrolled Act 1 will reduce the district’s net assessed value over a multi-year phase-in and trim revenue sources traditionally used to support operations and referendums.

Gardner said the law increases multiple deductions—homestead credits, a 2% class for certain apartments, and a business personal-property exemption—that together shrink the tax base the district uses to raise revenue. “The mechanics of Senate Enrolled Act 1 are going to increase tax rates regardless of what the school district does,” Gardner said, adding that higher rates do not automatically translate to more revenue when net assessed value is falling.

Why it matters: The presentation showed referendum revenue could decline by roughly $3 million to $4 million annually in later years under current modeling, and that the district faces a separate charter-share requirement beginning in 2028 that would phase in to an estimated $1.8 million annual obligation for MCCSC under today’s enrollment and revenue picture. Gardner said a new 10% homestead credit (capped at $300) will produce a near-term revenue hit—he estimated roughly $2.1 million that could affect 2026 collections—and that changes to business personal-property reporting will deepen the decline in later years.

Board discussion focused on tradeoffs if the district runs an operating referendum sooner than originally planned. Gardner noted that referendums placed on the ballot in 2026 would be treated differently from those placed later: a referendum run in 2026 would not be subject to the new charter-share rules that begin applying to referendums whose revenue starts after the law’s implementation. That creates a timing choice for the board, Gardner said, but it does not erase the multi-year decline in net assessed value that his modeling projects through 2031.

Board members and staff pressed Gardner on consequences and on options for message framing. Gardner and CFO Matt Erwin discussed how a referendum question will appear to voters (tax rate vs. dollar levy) and the practical need to plan levy targets in dollars rather than rely on rates alone because the law decouples rate movements from revenue change.

Gardner recommended the board consider long-range levy modeling and voter messaging that emphasize the revenue (dollars) to be collected rather than the nominal tax rate shown on a ballot. He also flagged uncertainty areas—legislative choices that might reassign debt-service impacts to operations and annual Department of Education calculations for charter-share thresholds—that the district should monitor as it finalizes budget planning and referendum timing.

Provenance: First related remarks begin with Barry Gardner’s introduction and presentation at 00:18:06; discussion, questions, and concluding remarks on SEA 1 occur through 00:51:19.