Lake Station renews referendum; two other measures fail
Just one out of three operating referenda on ballots this November earns approval from voters – marking a dismal 33% passing rate, albeit from a small sample size.
With such a low passing rate, and generally fewer measures on ballots than we’ve seen in the recent past . . . perhaps this is a signal that Hoosiers may be losing appetite for increasing their property taxes – and schools are taking note. This comes amidst complaints over rising property taxes and calls from state elected officials (including the new governor-elect) to provide relief in some form.
In a significant turnaround from last November, when voters narrowly rejected a renewal of the Lake Station Community School Corporation’s operating referendum by a mere 14 votes, the measure passes this cycle with strong support. Unofficial results show that the referendum renewal received 1,584 votes in favor and 1,050 against, translating to roughly 60% approval.
The two other schools with operating referenda on ballots were not as fortunate.
Voters in Twin Lakes School Corporation and the Kokomo School Corporation decisively rejected the schools’ first-ever tax increase ask.
A 33% passing rate surpasses November 2022’s 50% success rate which had marked the worst single-election success percentage ratio dating back to November 2014 . . . when neither of the two referenda on ballots passed.
Totaling up the numbers, since 2009, by our math, 57.7% of total operating referenda in November elections have passed. Overall, 177 of 278 (63.7%) of referenda have passed since school referenda were first placed on ballots.
The Lake Station Comeback
Adrian Martinez-De La Cruz of the Times of Northwest Indiana paints a picture of the atmosphere of election night in Lake Station. Supporters gathered at the Lake Station City Hall to watch the results be tallied, and when it became clear that the referendum would be extended, “the atmosphere was jubilant, filled with cheers and congratulatory embraces.”
The renewed property tax levy will generate approximately $1.5 million annually for the school district, maintaining a rate of 54 cents per $100 of assessed valuation for another eight years.
Following the previous defeat of the referendum, the Lake Station Board of Trustees was forced to implement deep budget cuts, resulting in the layoffs of at least 37 employees – including four teachers – and the resignation of six others.
Additionally, bus services were reduced to three days per week, necessitating synchronous e-learning on the other days.
Not long after the win, Superintendent Tom Cripliver announced that in-person instruction and full bus services would resume starting the following Monday, along with plans to reinstate extracurricular activities and potentially rehire some laid-off staff.
The story of Lake Station vastly differs from last fall.
This time, referendum supporters made a concerted effort to engage voters through various outreach strategies, including door-knocking, radio appearances, billboard advertising, and informational meetings, Martinez-De La Cruz reports. Special attention was given to educating senior voters about the referendum’s implications.
The funding from the referendum has been crucial for several initiatives, such as establishing a preschool program, increasing teacher salaries, providing Chromebooks for all students, and supporting transportation costs. School leaders contend referendum is vital for covering almost half of the district’s operating expenses, especially given the constraints imposed by tax circuit breakers, which limit the amount homeowners pay in property taxes.
The measure also received backing from local officials, including Mayor Bill Carroll (D) and the Lake Station City Council, which passed a resolution in support of the referendum renewal. This fall, the city’s redevelopment commission had also donated $50,000 to the school district to help reinstate the elementary student council, the DECA business program, elementary science bowl competitions, and elementary and yearbook publications.
Lake Station won’t get to retain all the dollars generated from the referendum this time, though. Lake County is one of four counties under SEA 391-2023 where public school districts must share post-May 2023 referenda funding with charter schools within the district’s boundaries.
A portion of the Lake Station referenda revenue will now be shared with Discovery Charter School and New Vistas High School, both of which some Lake Station students attend. The district estimates it would pay out a total of $27,845 to the charter schools that enroll students who live in Lake Station.
Breaking Down the Losses
In its first ask for a levy increase, Twin Lakes Schools needed the funds to supplement losses over declining enrollment.
Because of its shrinking enrollment, the district is already set to close two elementary schools as part of a consolidation strategy. Over the past decade, enrollment has dropped by almost 11%, with the district reporting 2,183 students last year.
This decrease in student numbers has led to a reduction in state funding, resulting in early career teachers and those with 20 years of experience earning $3,500 to $5,000 less than their counterparts in nearby districts.
To address these financial challenges, the district proposed a levy that would add $3.5 million annually to its general fund . . . and warned ahead of the election that if the referendum failed, it would lead to staff layoffs.
An organized opposition to the referendum formed quickly on social media – a Facebook page titled “Vote NO to Twin Lakes Referendum.” On that forum, organizers in posts and comments ask how the school can ask for more money from families who are already struggling financially.
“In a community where an average of 43% of your students qualify for free or reduced meals, which used to include book/classroom fees, you think it’s prudent to ask for more money?” one post on the page reads.
Posters on the medium also take issue with the Twin Lakes district’s performance, pointing to falling IREAD-3 and ILEARN scores and calling for more accountability for school leadership. One post on the page asserts, “I firmly believe it wise to reject the proposal and reconsider at a later date with enhanced understanding, more accountability, and transparency.”
The property tax increase ask from Kokomo would have generated $6 million annually for the district. The measure was defeated by more than a two-to-one margin, with more than 10,000 votes cast against it.
The referendum sought to raise $6.16 million each year for eight years by imposing a tax of 26 cents per $100 of assessed property value. For homeowners, this would have translated to an additional $165.75 per year, or approximately $13.81 per month, based on a home valued at $150,000. The funds were intended to support teacher and staff salaries, as well as elementary literacy programs and high school offerings.
Superintendent Mike Sargent shares with the Kokomo Tribune gratitude to supporters, and acknowledges the outcome was not
what they had hoped for. He notes that the tax proposal emerged from community discussions and comparisons with other districts that had successfully passed referendums.
Superintendent Sargent reassures the community that the failure of the referendum will not lead to staff reductions or funding cuts, stating that the district would continue its current operations without significant changes.
Spencer Durham of the Tribune speculates that the ballot’s wording may have contributed to the defeat, a common complaint we’ve heard over the last few cycles from the losing district since the 2021 legislative changes requiring the average tax rate increase for residential and business properties to be disclosed. For this referendum, the average increases were reported as 31% for residences and 24% for businesses, which could have alarmed voters, Durham writes.
In preparation for the election, Kokomo schools provided an online calculator for residents to estimate their potential tax increases based on their property values.
Here’s your full breakdown of referenda results this general election:
Kokomo School Corporation
Type: Operating
Rate: $0.26 per $100 of assessed property value for eight years
Annual revenue: $6.6 million
Spending plan: Retention, attracting teachers, staff and professional development; academic, educational programs; updates to technology infrastructure
Result: FAILED
Lake Station Community School Corporation
Type: Operating renewal
Rate: $0.54 per $100 of assessed property value for eight years
Annual revenue: $1.4 million
Spending plan: School bus transportation; retention, attraction of teachers and staff; academic, educational programs; student safety, school security; other education needs; required distribution to charter schools: Neighbors’ New Vistas High School, Discovery Charter School and 21st Century Charter School of Gary
Result: PASSED
Twin Lakes School Corporation
Type: Operating
Rate: $0.25 per $100 of assessed property value for eight years
Annual revenue: $3.5 million
Spending plan: Retention, attraction of teachers and staff; academic, educational programs; student safety, school security
Result: FAILED
A Sign of the Times?
As we’ve been alluding to, the lack of voter support for the two districts requesting referenda for the first time, along with just how few referenda were on ballots statewide this year compared to the last several November elections could be a sign of the times.
Alarms seem to be sounding from all sectors in Indiana over rap[idly rising assessed valuations and attendant property taxes. The topic was a highlight of the campaigns of Governor-elect Mike Braun (R) and former state superintendent of public instruction Jennifer McCormick (D), who both outlined property tax relief plans in their platforms. We also know the General Assembly is taking a hard look at the state’s tax system, especially property taxes and how to find relief for Hoosiers without placing the burden on schools and other units of local government.
With homeowners already paying more in property taxes and with heightened awareness on the issue, does that play a role in how willing people are to vote in favor of increasing their taxes right now? Seems likely . . . and you also have to keep in mind that most people feel like they’re generally paying more for everything now.
School districts (save, perhaps, those affluent districts who believe they can keep going to the well with their voters, who are willing to fund higher salaries, non-core programs, and fancier facilities) already view pursuing a referendum as a last-resort option for funding most of the time anyway, and it’s probably safe to assume that heightened scrutiny on rising property taxes and calls for property tax relief make corporations even more reluctant to place a measure on ballots. Hence, why there maybe were just three on ballots this general election. For comparison, in November 2023 and 2022 we saw nearly a dozen school referenda on ballots.
We will point out that the last presidential election in 2020 saw just four operating referenda on ballots . . . and 2020 was an abnormal election cycle given the Covid-19 pandemic. In 2016, seven operating referenda and four construction referenda were on ballots in November.
Still, many school districts continue to rely on referenda to fund critical expenses, from transportation to teacher compensation – as seen in Lake Station where the referendum dollars fund half of the district’s operating expenses. We saw the effect potentially losing those funds had on the district too, cutting jobs and services for students.
Looking ahead, though we don’t have a crystal ball, that reliance could increase more, depending on how state funding shakes out in what fiscal leaders warn is going to be a tight budget next year, and also depending on how lawmakers plan to address property tax relief in general next session.
Potential Changes Ahead for Referenda
Keep in mind as we transition to the Braun Administration that the governor-elect’s tax reform plan could bring significant changes to school referenda, as early as next year. Braun himself is a former local public school board member who served on the House Committee on Ways and Mean during his brief State House tenure.
You may recall a part of the property tax plan Braun’s campaign released in July poses mandating referenda to be placed on ballots only during general elections in even years – when voter turnout is generally higher. Referenda would also be subject to tax bill growth caps.
The argument that referenda shouldn’t be placed on ballots during elections with historically lower turnout sounds familiar. We heard that same point from House Committee on Education Chair Bob Behning (R) of Indianapolis during the last legislative session when he attempted to pass a bill doing exactly what Braun proposes – restricting all referenda to even-year general elections.
From our reporting over the years on school referenda outcomes, we know May primary ballot measures tend to fare better, with a total of around 70% that have passed between 2009 and 2024, compared to the latest November total passing rate of roughly 64 percent. That’s perhaps due to lower turnout, ensuring that less casual voters (which can be the least informed).
Rep. Behning failed to get his measure through, as it was met with significant pushback from all education stakeholder groups, who argue that boxing schools that want to pass a referendum into a specific election time frame takes away budget flexibility.
Given that we know lawmakers already have some interest in making such changes to when schools can pose referenda, we expect that measure will return in 2025 with much more momentum now that it will have the backing of the governor.
Also, the incoming governor in his referenda reform plans vows to amend ballot language requirements to make the wording less “misleading” to voters. The Braun plan would require a referendum to propose a total levy, giving the example of some language stating, “Shall the school raise $5 million to replace the school’s bus fleet?” A referendum would also have to include data on its impact on a median home’s property tax bill.
This proposal, from our understanding, could change the long-winded and often indecipherable ballot questions as they stand now.
Schools for the past three years have complained about ballot language being “misleading” and confusing to voters in particular since lawmakers changed referendum language requirements in 2021, requiring the average percentage of taxes to be paid to the schools to be placed on the question.
The concern – as mentioned in Kokomo’s situation this election – has been that voters likely see that percentage and think their individual taxes will increase by a lot more than what is actually being proposed. Many districts that lost their referendum bids since 2021 blamed the required question wording on contributing to the loss.
The takeaway here is that you should expect more to come next year in the realm of referenda.