Explain the actual referendum language on the May ballot.

The referendum ballot language is established by Indiana law and approved by the Indiana Department of Local Government Finance.

The language in the May 2023 referendum was passed by politicians in Indianapolis in the spring of 2021 in an effort to scare voters and take away local control. It uses a formula that does not correctly reflect the continuation of the same tax rate.

The referendum ballot as approved reads:

“Shall the School Town of Munster continue to impose increased property taxes paid to the school corporation by homeowners and businesses for eight (8) years immediately following the holding of the referendum for the purpose of funding current and anticipated educational programs that engage and develop students, retaining and attracting teachers, educational staff, and other support staff, funding operational expenditures including health, security and technology needs and special education, and managing class sizes at a continued maximum tax rate not to exceed $0.4196 per one hundred dollars ($100) of assessed valuation? The property tax increase requested in this referendum was originally approved by the voters in May 2017 and originally increased the average property tax paid to the school corporation per year on a residence within the school corporation by 53.1% and originally increased the average property tax paid to the school corporation per year on a business property within the school corporation by 49.0%.”

While this ballot language should provide transparency for the voter, it ends up creating confusion and misinformation. Voting “Yes” for this question means that the current school funding continues without any changes. The referendum tax rate stays the same as it has been for years and will not cause a tax increase. The effect of this ballot question is very simple – School Town of Munster (STM) funding remains stable.

Breaking down the ballot language, the first part reads, “Shall the School Town of Munster continue to impose increased property taxes paid to the school corporation by homeowners and businesses for eight (8) years immediately following the holding of the referendum…” This language is required by the legislature as of 2021. The word “increased” is required by the legislature even though this referendum is a continuation of the existing referendum rate.

The second part reflects the purpose of the referendum funding for the next eight years. “…for the purpose of funding current and anticipated educational programs that engage and develop students, retaining and attracting teachers, educational staff, and other support staff, funding operational expenditures including health, security and technology needs and special education, and managing class sizes at a continued maximum tax rate not to exceed $0.4196 per one hundred dollars ($100) of assessed valuation?” This language was written by the schools based on the Revenue Spending Plan approved by the STM Board of Trustees. The schools must review and approve a plan yearly. Referendum fund spending is audited to this plan by the State Board of Accounts. The ballot language no longer includes information about the maximum tax rate. The school included it in this section to accurately reflect the continuation of the same rate passed in 2017.

The next section is required by the legislature as of 2021 and does not accurately reflect the referendum tax effect. “The property tax increase requested in this referendum was originally approved by the voters in May 2017 and originally increased the average property tax paid to the school corporation per year on a residence within the school corporation by 53.1% and originally increased the average property tax paid to the school corporation per year on a business property within the school corporation by 49.0%.”

The formula STM was required to follow for the percentages of the tax effect occurring six years ago is not an accurate representation due to several factors. There is no information allowed on the ballot concerning the effect of the renewal of the referendum. Averages of overall taxing district rates and assessed values from six years ago are distorted in the formula and are not truly representative of the taxpayer base. The actual increase to an average median value home in 2017 (the first year of the referendum) was $290. For a home in Munster, this represented 10.5% of the tax bill, not 53.1% as is implied.

The school’s tax rate, other than the operating referendum, decreased over the last six years, as shown in this chart. The chart also shows that in 2018, the referendum portion of the tax rate (Gold) increased, but the school corporation was able to lower the other property taxes (Yellow) because of the flexibility provided by the referendum money. The “53.1%” in the ballot question is calculated as a percentage of the funding the school is receiving compared to the funds other than the referendum funding. It was not a 53.1% increase to the taxpayer. The dotted red line on the chart shows an approximation of 50% of those funds so that you can see that the referendum rate (Gold) is approximately that percentage. The actual formula required to certify the percentage in the ballot is spelled out by the Department of Local Government Finance and involves a calculation based on the average assessed value of a home in 2018.

Overall, the tax rate for schools is lower than it was before the referendum was passed. If the assessed value stays the same, everything will stay the same, but if the assessed value goes up, the yellow portion will drop and be less than it is now. However, the referendum rate will stay the same, meaning the referendum will not cause a tax increase.