CANNELTON – A property-tax referendum for Cannelton City Schools was narrowly defeated at the polls Tuesday by a vote of 73-70.
In effect since 2011, the original referendum allowed the school corporation to take in an additional revenue of 41 cents per $100 of assessed valuation above the limits set by tax circuit breakers. For 2017, it allowed the tax rate to grow to $2.565 per $100. With defeat, that additional levy will expire at the end of 2017, giving a slight tax break to ratepayers.
The financial implications will be substantial for Cannelton Schools, which expects to loose in excess of $90,000 in the upcoming year. According to Superintendent Dr. Alva Sibbitt, the district already carried deficient annual budgets in capital-projects, bus-replacement and transportation funds, each netting zero balances in tax revenue.
While the schools’ general fund is derived from state issued money, the local tax levy supports debt services, along with capital-projects, bus-replacement and transportation funds. The referendum supported a separate account solely for that tax base, and that money was used to fill in the gaps.
Sibbitt explained that tax money collected is distributed into the debt-services and referendum account first before any of the other accounts receive money. He said since the corporation was already hitting the circuit breaker, there hadn’t been enough remaining levy to fund any of the other accounts.
With the ancillary money soon to diminish, it will leave some precarious financial voids. However, the full extent of ramifications is unknown.
Citing that Cannelton Schools had been able to grow a healthy cash balance in recent years, with a reserve now setting at about $400,000,” he said the focus now will be on conserving the resources they have. Sibbitt said school officials will be discouraged from dipping into that pool of money as they prepare future years’ budgets.
“My goal in 2018 is just to break even,” Sibbitt continued.
The superintendent went on to talk about the “complicated process” of how tax caps will impact the school system moving forward. He said he’s been in contact with officials at the Indiana Department of Local Government Finance to help smooth the planning process.
“This is not a death sentence for Cannelton Schools,” Sibbitt assured, but reiterated they will need to tighten their belts a bit.
He postulated that the referendum may have had a different outcome had all of the students’ parents been able to participate in the vote. Sibbitt contended Cannelton loses about 60 kids to other school districts, yet gains upward of 60 students who are bussed in from outside of the Cannelton voting jurisdiction. However, those latter potential voters could not cast ballots.
While the impact of that can’t be substantiated, he said with a student population of about 250, it could have caused a swing toward the affirmative.