New legislation to ease Indiana school projects with higher borrowing allowances

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parkwood elementary school
Parkwood Elementary construction (Greater Clark County Schools)

School districts across Indiana could find it easier to fund new school buildings and other capital projects if a bill successfully makes its way through the General Assembly, the Louisville (KY) Courier-Journal reports.

The proposed changes to current funding mechanisms, laid out in House Bill 1043, make “perfect sense,” said Greater Clark County schools superintendent Andrew Melin, whose district has struggled in recent months to secure funding for safety improvements at three schools.

“The current legislation to me has not been fair to schools,” he said. “It’s not reasonable.”

The bill, which passed out of the Senate last week, was co-authored by Rep. Ed Clere, R-New Albany, and Rep. Steven Stemler, D-Jeffersonville. It now goes to conference committee, during which members will create a consensus version of the bill, which would have to go before both chambers for approval before moving to the governor’s desk.

Rep. Jeff Thompson, a Republican from Lizton, is the bill’s main author.

The bill consists of three major components that could help school districts across the state, Clere said.

  • First, it would make it easier for school boards to borrow money without direct voter approval. Currently, school districts wanting to borrow money for capital projects are subject to the petition and remonstrance process if the proposed project costs $2 million or more. If the project is expected to cost $10 million or more, the issue must go to referendum. According to the most recent version of the legislation, HB 1043 would allow districts to avoid the petition and remonstrance process as long as the project does not exceed $5 million and avoid a referendum as long as the project does not exceed $15 million.
  • The bill also proposes changes to ballot language when school districts seek funds through a referendum. If approved, referendum questions would be able to include additional information about how taxpayers would be affected.The current language, which only provides information about how the tax rate will be affected, is not “user-friendly,” Clere said.
  • HB 1043 would also provide added guidance for determining whether proposed projects have been “artificially divided” in order to qualify for different funding mechanisms. This part of the legislation came “completely” out of discussions with Greater Clark, Clere said. Last year, the district attempted to borrow a series of bonds for 13 different renovation projects, and the state found the district had “artificially divided” several large projects into smaller ones to qualify for a funding mechanism that didn’t require taxpayer approval.

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