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Danville Community School Corp CFO: Senate Bill 1 may raise local tax rates though bond levy stays the same
Summary
Corey Herbert, the district CFO, says Senate Bill 1 reduced the tax base by increasing deductions, which can raise local tax rates even when the total bond levy for approved projects remains unchanged; he also warns of an anticipated $1,000,000 revenue shortfall in the operations fund for 2026.
Corey Herbert, chief financial officer for the Danville Community School Corp, said recent state legislative changes mean the district may face higher local tax rates even though total bond levies approved by voters remain the same.
"Our plan has not changed," Herbert said, adding that the master campus plan approved in mid-2022, including projects, timelines and total bond repayment amounts, remains as voters and the school board approved. "What has changed is how the levy is generated."
Herbert told viewers that Senate Bill 1 reduces net assessed value by increasing allowable deductions across properties. "Because Senate Bill 1 reduces the net assessed value, the same levy amount now has to be raised from a smaller tax base," he said. "As a result, the tax rate may increase even though the total levy to repay the bonds has not changed."
Herbert said the district is not collecting more for debt service; rather, the calculation has changed due to state law. He stressed this distinction to explain why taxpayers could see a higher rate even though the dollar amount voters authorized for bond repayment is unchanged.
Beyond the debt service fund, Herbert said the changes also have had a substantial effect on the district's operations fund. For the 2026 budget year he said the district anticipates "a revenue reduction of nearly $1,000,000 from a fund that typically generates about 4 and a half million annually," and that the district must take "strategic and proactive steps to balance our budget while continuing to maintain daily operations and protect classroom instruction."
He noted similar impacts are appearing in other school districts across the state and said the district will address Senate Bill 1 in more detail in the next video in the financial series.
The district did not announce specific program cuts or staffing actions in the video; Herbert said the district is planning steps to preserve classroom instruction while balancing the budget. The next installment in the series will examine Senate Bill 1 and how it specifically affects the district's finances.
