Indiana schools could lose millions

INDIANAPOLIS - Indiana schools stand to lose more than $150 million in 2010 because of proposed caps on property taxes, with urban school districts being hit the hardest, leading Senate Democrats said Monday as they called for the state to make up for the shortfall.\nSen. John Broden, D-South Bend, wants to amend a bill so that a school district losing revenue because of the caps would get state general fund money to make up for the reduction. \n“While we are all for property tax relief, we do not want that property tax relief to come at the expense of a quality education for our school children,” Broden said.\nThe Senate is considering a bill that would phase in property tax caps called “circuit breakers.” By 2010, property tax bills would be limited for homeowners to 1 percent of their home’s assessed value, with a 2 percent cap for rental property and a 3 percent limit for businesses.\nThe caps are projected to reduce property taxes by about $600 million in 2010 — but that is $600 million less in what local governments and schools otherwise would be able to collect.\nLocal governments can increase local income taxes to help raise additional money, but senators said schools don’t collect any of that revenue, leaving them with no way to make up for the shortfall.\nSome large urban school districts stand to lose millions under the caps. Indianapolis Public Schools would lose $14.7 million in 2010, while Hammond Public Schools would lose $13.6 million and East Chicago Public Schools $11.7 million, according to estimates by the Legislative Services Agency.\nSome school leaders said the lost revenue could mean larger class sizes or cuts to programs for students.\n“Students are in line to suffer, especially poor and disadvantaged students in urban areas,” Indianapolis Superintendent Eugene White said.\nSen. Earline Rogers, D-Gary, said students in poor areas need educational programs to help them succeed and break the link between poverty and low achievement.\n“If we’re going to take away some of the money that’s needed in order for us to have special programs for these young people, then you’re going to see a drop in the achievement rate, which I don’t think anyone in this state wants to see,” Rogers said.