Northwest Allen County Schools officials say a tax increase referendum must be considered as the district struggles to find solutions to its budget woes.
NACS officials reviewed part of the district’s 2013 budget Monday, and the forecast wasn’t promising: The district’s property tax-supported funds are projected to lose $2.4 million in 2013 because of the property tax caps imposed by the state, according to Business Manager Bill Mallers.
NACS Superintendent Chris Himsel said the losses are so significant that the district will need to consider several options to pay its bills.
The most helpful option, he said, would be a referendum in which voters agreed to pay higher taxes.
Himsel said NACS is feeling the pain of the property tax caps in a way that many other districts haven’t experienced. NACS, a growing suburban district, built and expanded schools in the years before the tax caps were implemented. The tax cap losses are hitting NACS as the district’s debt payments for construction are coming due.
In 2013, the state will take care of debt service payments, Himsel said. But the cost of the payments will be taken out of the districts’ transportation, capital projects and bus replacement funds, limiting many of the services the district would like to provide students.
By this winter, Himsel hopes the board can make a decision about how to handle the tax cap losses. Besides a referendum, he said the district could try traditional or non-traditional refinancing. Although both of those options would help the situation, he said neither would solve the financial problem.
“A referendum is the only option that truly solves the problem,” he said.
Himsel said the district would continue to maintain buildings and update security systems – the kinds of projects that relate to student health and safety. As a result, he said, technology plans and other projects would need to be put on the backburner.
Mallers will review the district’s general, or state-supported fund, at the next board meeting. The board will vote to adopt the budget in October.
In other business, the board heard an update on the district’s self-insured health insurance plan. Mallers said employees will see a 3 percent increase in their health insurance premiums and will have two “premium holidays,” or pay days when they will not have to pay the premiums.
Mallers said the district is also hiring an outside firm to conduct an audit of the health insurance program to determine whether those listed as dependents on employee’s policies meet the criteria. Mallers said the move is required by law, and will likely lead to a significant amount of people being removed from the plan.