 Financial Moment November 2013

Beginning with 2010 tax bills, property owners have been entitled to a circuit breaker cap on the amount of property taxes over:  1% of homestead properties;  2% of residential properties;  2% of agricultural land;  2% of long-term care facilities;  3% of nonresidential properties; and  3% of personal property. (In 2009, the circuit breaker caps were 1.5%, 2.5% and 3.5%.) Taken from the Indiana Circuit Breaker Fact Sheet

Tax levies are collected by:  counties;  townships;  cities and towns;  school corporations;  library districts; and  other special districts to provide services. Taken from the Indiana Circuit Breaker Fact Sheet

Example: Homestead valued at $300,000 Tax liability: $5100 1% circuit breaker cap: $3000 Taxpayer receives circuit breaker credit of $2100

 HEA 1072 created the “protected taxes” concept and worsened the impact of the tax caps on schools  Protected taxes meant that debt service funds had to be met first at the expense of other funds  SEA 517 was introduced to allow school corporations to flexibly allocate circuit breaker losses across funds

Previous Law Without Protected Levies Current Law with Protected Levies CorpFund NameLevy Circuit Breaker % of Levy Lost Circuit Breaker % of Levy Lost Gary Community School CorpTotal28,951,11313,071, %13,071, % Muncie Community School CorpTotal19,970,8938,746, %8,746, %

Previous Law Without Protected Levies Current Law with Protected Levies CorpFund NameLevy Circuit Breaker % of Levy Lost Circuit Breaker % of Levy Lost Franklin Township School CorpTotal44,311,83517,053, %17,053, % Lost 100% of the Transportation, Bus Replacement, and Capital Projects dollars Beech Grove City School CorpTotal8,138,3632,708, %2,708, % Lost 100% of the Transportation, Bus Replacement, and Capital Projects dollars Cannelton City School CorpTotal641,649228, %228, % Lost 100% of the Transportation, Bus Replacement, and Capital Projects dollars

Previous Law Without Protected Levies Current Law with Protected Levies CorpFund NameLevyCircuit Breaker% of Levy LostCircuit Breaker% of Levy Lost Boone Township School CorpTotal4,093,707466, %466, % Duneland School CorpTotal26,772,5961,031, %1,031, % East Porter County School CorpTotal8,435,55459, %59, % Portage Township School CorpTotal17,113,9811,406, %1,406, % Union Township School CorpTotal4,633,3421, %1, % Valparaiso Community School CorpTotal19,476,9151,467, %1,467, %

Previous Law Without Protected Levies Current Law with Protected Levies CorpFund NameLevy Circuit Breaker% of Levy Lost Circuit Breaker% of Levy Lost Porter Twp. School CorpDebt Service2,816, %0 Porter Twp. School CorpPension Debt112, %0 Porter Twp. School Corp Capital Projects (School)1,120, % % Porter Twp. School Corp 2013 State GF Loan Repayment53, %0 Porter Twp. School Corp Transportatio n1,113, % % Porter Twp. School Corp Bus Replacement44, %360.10% Total 5,260,3871, %1, %

 Continues to impact more districts  Forecast is that eventually all districts will be significantly impacted  Need to continue to talk to lawmakers