Consultant warns Senate Bill 1 will shrink West Lafayette's tax base; board discusses rerunning referendum in 2026

Mike Reuter, a consultant retained by the district, told the West Lafayette Community School Corporation board on Nov. 10 that sweeping changes in the 2025 state legislative package known as Senate Bill 1 will materially erode the district's property-tax base and force choices about whether to rerun the referendum.

"It was probably one of the most difficult legislative sessions that I had ever experienced," Reuter said, describing a package that inserts a homestead credit and expands other deductions that will take effect beginning in 2026. He said the changes include a phase-in that increases the supplemental homestead deduction to 66.7% by 2031 and adds a rental-property deduction rising from 6% in 2026 to 33.3% by 2031. Reuter also noted the business personal-property reporting floor will jump to $2,000,000 in 2027, removing many small filers from the tax roll.

Reuter showed the district's historical net assessed-valuation (AV) growth at roughly 3.3% annually and said that under SB1 the district's referendum revenue, now funded at a 37'cent levy, could fall from an estimated $8.72 million in 2026 to roughly $7.3 million by 2031 under the baseline AV scenario. "That is going to take a large part of the tax base away," he said.

He laid out four planning questions for the board: whether to rerun the referendum; whether to raise the referendum to replace transfer-student revenue; whether to raise it to offset projected enrollment declines; and whether to raise it to replace the new homestead-credit loss. Using conservative 3% annual growth assumptions to preserve purchasing power through 2031, Reuter offered examples showing that a long-run rate as high as about 51.15'cents could be required to preserve the referendum's buying power through 2031, though he said districts commonly ask voters to approve a higher "maximum" while pledging to collect only a portion in the early years.

Board members pressed Reuter on statutory language and timing. Reuter said state law prescribes referendum ballot language and that, because referendums now must be filed in general-election years, the district could run in 2026 or 2028; he advised deciding soon after the final legislative session so the district can begin public outreach, noting a practical deadline in early July to get on the November 2026 ballot.

Reuter also walked through scenario modeling: if the district lost 160 transfer students at the current per-pupil basic grant (about $7,185), the revenue loss would be roughly $1.49 million and would require an immediate levy adjustment of roughly 0.0489 if no expense reductions occurred. If the district could reduce 50% of those costs (for example, about five teachers), the additional levy needed would fall to about 0.0245. He emphasized these are modeling exercises to inform board direction, not final decisions.

Board members and administrators discussed next steps, including running a community survey, holding focus groups and teacher sessions, and presenting concrete tax-bill examples for 2026 and projected 2031 impacts. No formal referendum action was taken at the meeting; the presentation and board discussion were preparatory and framed the decisions the board will face in early 2026.

What's next: the board directed staff to circulate survey materials and hold follow-up meetings; Reuter and staff said more refined 2026 tax-bill estimates will be available before any final rate decision.

Attribution: All direct quotations and figures above are drawn from Reuter's presentation and board discussion recorded at the Nov. 10 meeting.