BY BRIAN WILLIAMS, Times of Northwest Indiana
bwilliams@nwitimes.com

School bus fleets may get older and smaller. Students within a mile of school may have to find their own transport. Leaky roofs and rough sidewalks may linger longer before repair. Technology upgrades may be fewer and farther between. And summer school may become a thing of the past.

Hoosier homeowners will realize more than $800 million in property tax relief as a result of restructuring passed by the General Assembly this month, but at what price, local school administrators are asking.

"I'm very concerned for the future of public education," said Valparaiso schools Superintendent Michael Benway, as his district faces annual losses nearing $1 million by 2010 from the lid put on property taxes.

"It's going to be interesting, to say the least," said Karen Wallisch, business officer for Hammond schools.

In projections by the Indiana Legislative Services Agency, Hammond schools could get $1.5 million less in 2010 than they would have without the "circuit breaker" caps on property taxes. East Chicago schools could lose $2.2 million. And Gary schools could be out $8 million.

In Porter County, Union and Porter township school districts get off relatively easy. Other districts stand to be out hundreds of thousands, with Portage at a projected $930,000 in 2010.

Key services could go

Under the new system, each district's largest fund, the general fund -- which is used to pay salaries, benefits, insurance, supplies and utilities -- will be paid in total by state funds. The coming increase in sales tax to 7 percent is designed to pay the state's added burden.

But other key funds -- debt service, capital projects, transportation and bus replacement -- still will be paid by local property taxes. The latter three stand to feel the pinch.

Because debt service -- the charges on bonds for construction projects and other debts -- is a district's first obligation, the other funds would bear the brunt of any shortfall created by the coming caps on property taxes.

Districts are not obligated to provide transportation, so bus routes may be eliminated and drivers laid off, said Denny Costerison, executive director of the Indiana Association of School Business Officials. Schools may forgo maintenance and small construction projects. Computer hardware and software may be harder to come by.

Eliminating summer school could well follow, Wallisch said.

Some of the cost-saving tactics carry costs of their own, Wallisch said. Even though the legislature extended bus replacement cycles from 10 to 12 years, Hammond may have to keep buses in service even longer. And that would trigger more frequent inspections -- which cost money, Wallisch said.

Delayed maintenance also may necessitate larger repairs that could push districts to issue bonds to pay for them.

In the meantime, districts must budget for the projected losses.

"I'm a taxpayer," Benway said. "I understand people are concerned about property taxes." But K-12 education, which he calls the best economic development tool, is not the place to pinch, he said. "It comes down to a matter of your values."

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