Purdue Cooperative Extension Service

On Local Government

Recession, Recovery, and Indiana Government Budgets

Larry DeBoer Department of Agricultural Economics

Purdue University

December 16, 2009

For more information DeBoer’s Indiana Local Government Information website:

www.agecon.purdue.edu/crd/Localgov

1

ECONOMIC OUTLOOK

Economic Rules of Thumb

• U.S. Real GDP must rise 3% to keep the unemployment rate from rising

• U.S. Real GDP must rise 4.5% to bring the unemployment rate down 1% during a year

• If the unemployment rate is more than 5%, the inflation rate tends to fall

• If the unemployment rate is more than 6% higher than the inflation rate, the Federal

Reserve won’t increase interest rates

Implications of the Rules of Thumb

• U.S. Real GDP must rise 3% to keep the unemployment rate from rising

– If the expansion starts off slowly, the unemployment rate will keep increasing

• U.S. Real GDP must rise 4.5% to bring the unemployment rate down 1% during a year

– About the best we can hope for is a 1% drop in unemployment during 2010

– It will take at least five years to get the unemployment rate back down to 5%,

where it was before the recession

• If the unemployment rate is more than 5%, the inflation rate tends to fall

– There will be downward pressure on inflation for some time to come

– There’s no big inflation threat any time soon, though oil prices are always a wild

card

• If the unemployment rate is more than 6% higher than the inflation rate, the Federal

Reserve won’t increase interest rates

– A 10% unemployment rate and a 1% inflation rate mean Fed will keep the federal

funds rate near zero during 2010

Summary

• The unemployment rate will stay above 9% in 2010, and may increase a little

• The unemployment rate won’t get back down to 5% until the end of 2014, at the earliest

• There’s no big inflation threat any time soon, and the inflation rate may go down

• The Federal Reserve won’t increase its interest rate in 2010

2

3

4

5

INDIANA’S STATE BUDGET

6

Ind

ian

a S

tate

Bu

dg

et S

um

ma

ry, F

Y 2

00

0-2

01

1(m

illion

s of d

olla

rs, up

da

ted

thro

ug

h D

ece

mb

er 2

00

9 re

ven

ue fo

reca

st)

Actu

al

Actu

al

Actu

al

Actu

al

Actu

al

Actu

al

Actu

al

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al

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al

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al

Bu

dg

et

Bu

dg

et

Av

g. A

nn

. Ch

an

ge

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

00

-09

20

09

-11

Sta

rt of Y

ear B

ala

nce

s1,9

91

1,6

38

910

534

720

533

750

1,0

89

1,2

86

1,4

13

1,4

19

667

Re

ve

nu

es

Sale

s Tax

3,6

51

3,6

87

3,7

61

4,1

72

4,7

21

4,9

60

5,2

26

5,3

79

5,6

86

6,1

53

5,9

32

6,1

69

6.0

%0.1

%

Indiv

idual In

com

e T

ax

3,7

53

3,7

80

3,5

41

3,6

44

3,8

08

4,2

13

4,3

22

4,6

16

4,8

38

4,3

14

3,7

76

4,1

21

1.6

%-2

.3%

Corp

ora

te In

com

e T

ax

985

855

709

729

645

825

925

987

910

839

547

733

-1

.8%

-6.5

%

Gam

ing

-

-

-

431

602

585

590

625

583

621

672

697

5.9

%

All O

ther

810

801

784

1,0

72

1,1

43

905

1,3

70

1,0

96

1,1

87

1,1

25

1,1

94

1,0

62

3.7

%-2

.8%

Tota

l9,2

00

9,1

23

8,7

96

10,0

49

10,9

18

11,4

89

12,4

34

12,7

03

13,2

03

13,0

52

12,1

21

12,7

81

4.0

%-1

.0%

Ap

pro

pria

tion

s

K-1

2 E

ducatio

n3,9

05

4,1

82

4,1

85

4,3

80

4,2

47

4,5

12

4,5

82

4,6

47

4,8

30

6,1

69

7,5

84

7,6

69

5.2

%11.5

%

Hig

her E

ducatio

n1,3

31

1,3

90

1,4

11

1,4

40

1,4

74

1,5

28

1,5

44

1,5

88

1,6

54

1,7

44

1,7

26

1,7

56

3.0

%0.3

%

Medic

aid

1,0

42

1,1

44

1,1

71

1,2

49

1,2

66

1,3

83

1,4

55

1,5

25

1,5

87

1,6

64

1,8

21

1,8

74

5.3

%6.1

%

Pro

perty

Tax R

elie

f1,0

57

1,1

54

1,1

80

1,1

57

2,0

97

2,1

43

2,1

53

2,1

89

2,3

08

1,6

99

90

-

5.4

%-1

00.0

%

Health

& S

ocia

l Serv

ices

757

774

858

855

767

768

836

860

943

1,2

37

1,3

54

1,3

54

5.6

%4.6

%

Public

Safe

ty621

623

678

681

695

697

718

718

721

801

781

796

2.9

%-0

.3%

All O

ther

1,0

05

923

824

1,1

36

763

719

787

831

943

1,1

22

1,1

22

1,0

64

1.2

%-2

.6%

Tota

l9,7

18

10,1

90

10,3

07

10,8

98

11,3

10

11,7

50

12,0

75

12,3

59

12,9

86

14,4

36

14,4

78

14,5

12

4.5

%0.3

%

Cu

rren

t Ye

ar S

urp

lus/D

efic

it(5

18)

(1

,067)

(1

,511)

(8

50)

(3

92)

(2

62)

359

345

217

(1

,385)

(2

,357)

(1

,731)

AR

RA

Medic

aid

405

549

289

AR

RA

Fisc

al S

tabiliza

tion

587

276

221

AR

RA

Tota

l992

825

510

Tra

nsfe

rs from

(to) O

ther F

unds

30

236

617

376

138

257

12

70

19

73

16

20

Reversio

ns

134

103

145

323

63

222

125

119

133

357

763

450

Paym

ent D

ela

ys (R

eversa

ls)-

-

374

337

3

-

(1

56)

(3

37)

(2

41)

(3

1)

-

-

Tota

l Adju

stments

165

339

1,1

35

1,0

36

204

479

(2

0)

(1

48)

(8

9)

399

779

470

En

d o

f Ye

ar B

ala

nce

s

Genera

l Fund

833

19

0

137

0

119

411

537

593

55

(4

82)

(9

48)

Tuitio

n R

ese

rve

265

265

265

305

291

291

317

317

400

942

721

425

Medic

aid

Rese

rve

-

100

-

-

-

24

34

88

58

58

58

58

Rain

y D

ay F

und

540

526

269

279

242

317

328

344

363

365

371

382

Tota

l1,6

38

910

534

720

533

750

1,0

89

1,2

86

1,4

13

1,4

19

667

(8

4)

To

tal B

ala

nce

s %

of R

ev

en

ue

17.8

%10.0

%6.1

%7.2

%4.9

%6.5

%8.8

%10.1

%10.7

%10.9

%5.5

%-0

.7%

Paym

ent D

ela

y L

iability

-

-

372

711

712

726

622

286

31

-

-

-

Reversio

ns fo

r 2010 a

nd 2

011 b

ase

d o

n Ju

ly 2

009 c

lose

out d

ocum

ent, a

nd th

e G

overn

or's p

ress re

lease

s from

Nov. 6

, Dec. 4

and D

ec. 1

5, 2

009.

Pre

pare

d b

y L

arry

DeB

oer, D

epartm

ent o

f Agric

ultu

ral E

conom

ics, P

urd

ue U

niv

ersity

and P

urd

ue C

oopera

tive E

xte

nsio

n S

erv

ice, D

ecem

ber 2

009.

7

T

ab

le 1

. Ind

ian

a B

ud

get S

um

ma

ry, 2

00

9-1

1T

ab

le 2

. Ind

ian

a B

ud

get S

um

ma

ry, 2

00

9-1

1T

ab

le 3

. Ind

ian

a B

ud

get S

um

ma

ry, 2

00

9-1

1

Ma

y 2

00

9 re

ven

ue fo

reca

stD

ec. 2

00

9 re

ven

ue fo

reca

st, Go

vern

or's re

versio

ns

Dec. 2

00

9 re

ven

ue fo

reca

st, 5%

Ba

lan

ces

Actu

al

Bu

dg

et

Bu

dg

et

Actu

al

Bu

dg

et

Bu

dg

et

Actu

al

Bu

dg

et

Bu

dg

et

20

09

20

10

20

11

20

09

20

10

20

11

20

09

20

10

20

11

Sta

rt of Y

ear B

ala

nce

s1,4

13

1,4

19

1,3

34

S

tart o

f Ye

ar B

ala

nce

s1,4

13

1,4

19

667

S

tart o

f Ye

ar B

ala

nce

s1,4

13

1,4

19

874

Re

ve

nu

es

Re

ve

nu

es

Re

ve

nu

es

Sale

s Tax

6,1

53

6,1

32

6,4

38

S

ale

s Tax

6,1

53

5

,93

2

6,1

69

S

ale

s Tax

6,1

53

5

,93

2

6,1

69

Indiv

idual In

com

e T

ax

4,3

14

4,2

89

4,5

47

In

div

idual In

com

e T

ax

4,3

14

3

,77

6

4,1

21

In

div

idual In

com

e T

ax

4,3

14

3

,77

6

4,1

21

Corp

ora

te In

com

e T

ax

839

800

819

C

orp

ora

te In

com

e T

ax

839

5

47

7

33

C

orp

ora

te In

com

e T

ax

839

5

47

7

33

Gam

ing

621

646

661

G

am

ing

621

6

72

6

97

G

am

ing

621

6

72

6

97

All O

ther

1,1

25

1,3

22

1,1

40

A

ll Oth

er

1,1

25

1

,19

4

1,0

62

A

ll Oth

er

1,1

25

1

,19

4

1,0

62

Tota

l13,0

52

13,1

89

13,6

06

T

ota

l13,0

52

1

2,1

21

1

2,7

81

T

ota

l13,0

52

1

2,1

21

1

2,7

81

Ap

pro

pria

tion

sA

pp

rop

riatio

ns

Ap

pro

pria

tion

s

K-1

2 E

ducatio

n6,1

69

7,5

84

7,6

69

K

-12 E

ducatio

n6,1

69

7,5

84

7,6

69

K

-12 E

ducatio

n6,1

69

7,5

84

7,6

69

Hig

her E

ducatio

n1,7

44

1,7

26

1,7

56

H

igher E

ducatio

n1,7

44

1,7

26

1,7

56

H

igher E

ducatio

n1,7

44

1,7

26

1,7

56

Medic

aid

1,6

64

1,8

21

1,8

74

M

edic

aid

1,6

64

1,8

21

1,8

74

M

edic

aid

1,6

64

1,8

21

1,8

74

Pro

perty

Tax R

elie

f1,6

99

90

-

P

roperty

Tax R

elie

f1,6

99

90

-

P

roperty

Tax R

elie

f1,6

99

90

-

Health

& S

ocia

l Serv

ices

1,2

37

1,3

54

1,3

54

H

ealth

& S

ocia

l Serv

ices

1,2

37

1,3

54

1,3

54

H

ealth

& S

ocia

l Serv

ices

1,2

37

1,3

54

1,3

54

Public

Safe

ty801

781

796

P

ublic

Safe

ty801

781

796

P

ublic

Safe

ty801

781

796

All O

ther

1,1

22

1,1

22

1,0

64

A

ll Oth

er

1,1

22

1,1

22

1,0

64

A

ll Oth

er

1,1

22

1,1

22

1,0

64

Tota

l14,4

36

14,4

78

14,5

12

T

ota

l14,4

36

14,4

78

14,5

12

T

ota

l14,4

36

14,4

78

14,5

12

Cu

rren

t Ye

ar S

urp

lus/D

efic

it(1

,385)

(4

64)

(3

97)

C

urre

nt Y

ear S

urp

lus/D

efic

it(1

,385)

(2

,35

7)

(1

,73

1)

C

urre

nt Y

ear S

urp

lus/D

efic

it(1

,385)

(2

,35

7)

(1

,73

1)

AR

RA

Medic

aid

405

549

289

A

RR

A M

edic

aid

405

549

289

A

RR

A M

edic

aid

405

549

289

AR

RA

Fisc

al S

tabiliza

tion

587

276

221

A

RR

A F

iscal S

tabiliza

tion

587

276

221

A

RR

A F

iscal S

tabiliza

tion

587

276

221

AR

RA

Tota

l992

825

510

A

RR

A T

ota

l992

825

510

A

RR

A T

ota

l992

825

510

Tra

nsfe

rs from

(to) O

ther F

unds

73

16

20

T

ransfe

rs from

(to) O

ther F

unds

73

16

20

T

ransfe

rs from

(to) O

ther F

unds

73

16

20

Reversio

ns

357

363

50

R

eversio

ns

357

7

63

4

50

R

eversio

ns

357

9

70

9

70

Paym

ent D

ela

ys (R

eversa

ls)(3

1)

-

-

P

aym

ent D

ela

ys (R

eversa

ls)(3

1)

-

-

P

aym

ent D

ela

ys (R

eversa

ls)(3

1)

-

-

Tota

l Adju

stments

399

379

70

T

ota

l Adju

stments

399

779

470

T

ota

l Adju

stments

399

986

990

En

d o

f Ye

ar B

ala

nce

sE

nd

of Y

ear B

ala

nce

sE

nd

of Y

ear B

ala

nce

s

Genera

l Fund

55

185

144

G

enera

l Fund

55

(4

82)

(9

48)

G

enera

l Fund

55

(2

75)

(2

21)

Tuitio

n R

ese

rve

942

721

425

T

uitio

n R

ese

rve

942

721

425

T

uitio

n R

ese

rve

942

721

425

Medic

aid

Rese

rve

58

58

58

M

edic

aid

Rese

rve

58

58

58

M

edic

aid

Rese

rve

58

58

58

Rain

y D

ay F

und

365

371

382

R

ain

y D

ay F

und

365

371

382

R

ain

y D

ay F

und

365

371

382

Tota

l1,4

19

1,3

34

1,0

08

T

ota

l1,4

19

6

67

(8

4)

T

ota

l1,4

19

8

74

6

43

To

tal B

ala

nce

s %

of R

ev

en

ue

10.9

%10.1

%7.4

%T

ota

l Bala

nce

s %

of R

ev

en

ue

10.9

%5

.5%

-0.7

%T

ota

l Bala

nce

s %

of R

ev

en

ue

10.9

%7

.2%

5.0

%

8

0%

5%

10%

15%

20%

25%

30%

1976 1980 1984 1988 1992 1996 2000 2004 2008

Indiana State Fund Balances as Share of Operating Revenues, FY 1976-2009 and Three Results for 2010-11

Prudent Range

Rule-of-Thumb Minimum

End of FY '09

1

2

3

9

PROPERTY TAXES, 2009

Counties where homestead owners saw tax reductions in 2009

• Counties where the school general fund or county welfare funds were a large share of the

levy in 2008

• Counties that had lower state PTRC or state homestead credit rates in 2008

– Those with more debt service levies

• Counties that adopted local option income taxes for 2009

10

11

12

13

14

Ad

op

tion

s of th

e N

ew

Lo

ca

l Op

tion

Inco

me T

axes

Distrib

utio

n o

f Tax R

elie

fT

ota

l T

ota

lT

ota

l

Decisio

nF

irst Tax

Levy

Pro

perty

Tax

All

Hom

este

ads/

Public

Added

LO

IT

County

Body

Year

Fre

eze

Relie

fT

axpayers

Hom

este

ads

Renta

lsS

afe

tyR

ate

Rate

Bento

nC

ounty

Council (C

AG

IT)

2008

1.0

0%

100%

1.0

0%

2.2

90%

Bro

wn

County

Council (C

AG

IT)

2008

0.2

0%

0.5

0%

100%

0.2

5%

0.9

5%

2.2

00%

Carro

llC

ounty

Council (C

AG

IT)

2009

0.2

0%

0.2

0%

100%

0.4

0%

1.5

50%

Cla

yC

ounty

Council (C

AG

IT)

2010

0.7

5%

100%

0.2

5%

1.0

0%

2.2

50%

Clin

ton

County

Council (C

AG

IT)

2010

0.2

5%

100%

0.2

5%

0.5

0%

2.0

00%

Fayette

Connersv

ille C

ity (C

OIT

)2008

1.0

0%

100%

1.0

0%

2.3

70%

Fulto

nC

ounty

Council (C

AG

IT)

2009

0.2

5%

100%

0.2

5%

0.5

0%

1.9

30%

Gra

nt

Multip

le U

nits (C

OIT

)2010

1.0

0%

10%

90%

1.0

0%

2.2

50%

How

ard

Kokom

o C

ity (C

OIT

)2008

0.5

0%

100%

0.5

0%

1.6

00%

Huntin

gto

nC

ounty

Council (C

AG

IT)

2009

0.2

5%

100%

0.1

0%

0.3

5%

1.6

00%

Jasp

er

County

Council (C

AG

IT)

2008

0.3

0%

1.0

0%

100%

0.2

5%

1.5

5%

3.0

50%

Jay

County

Council (C

AG

IT)

2008

0.4

0%

0.5

0%

100%

0.0

5%

0.9

5%

2.4

50%

Law

rence

County

Council (C

AG

IT)

2010

0.5

0%

100%

0.2

5%

0.7

5%

1.7

50%

Mario

nC

ity/C

ounty

Council (C

OIT

)2008

0.2

7%

0.3

5%

0.5

2%

1.6

20%

Mia

mi

County

Council (C

OIT

)2009

1.0

0%

50%

30%

20%

0.2

5%

1.2

5%

2.5

40%

Montg

om

ery

Multip

le U

nits (C

OIT

)2008

1.0

0%

20%

80%

1.0

0%

2.1

00%

Morg

an

County

Council (C

AG

IT)

2008

0.2

0%

1.0

0%

100%

0.2

5%

1.4

5%

2.7

20%

Park

eC

ounty

Council (C

AG

IT)

2008

0.3

0%

0.2

5%

100%

0.2

5%

0.8

0%

2.3

00%

Pula

ski

County

Council (C

AG

IT)

2008

0.4

0%

1.0

0%

100%

1.4

0%

3.1

30%

St. Jo

seph

Multip

le U

nits (C

OIT

)2010

0.5

0%

100%

0.2

5%

0.7

5%

1.7

50%

Ste

uben

County

Council (C

AG

IT)

2009

0.2

5%

100%

0.2

5%

0.5

0%

1.7

90%

Wabash

County

Council (C

AG

IT)

2008

0.4

0%

1.0

0%

50%

50%

1.4

0%

2.9

00%

Warre

nC

ounty

Council (C

AG

IT)

2008

0.3

0%

0.2

5%

100%

0.2

5%

0.8

0%

2.1

20%

Wells

County

Council (C

AG

IT)

2008

0.4

0%

0.2

0%

100%

0.0

5%

0.6

5%

2.1

00%

Sourc

es: L

egisla

tive S

erv

ices A

gency; S

tate

Budget A

gency; A

ssocia

tion o

f India

na C

ountie

s: Update

d D

ecem

ber 2

009

15

Local Option Income Taxes

Total counties with LOITs: 24

New adoptions for 2010: 5

Total New for 2010

Levy Freeze 11 0

Property Tax Relief 23 5

Public Safety 16 4

Property Tax Relief 23

Homesteads 5

Homesteads & Rentals 6

All Property 17

Provides property tax credits to property owners

• Average Homestead Rate: 25%

• Average Other Residential Rate: 15%

• Average PTRC (all property) Rate: 13%

16

SCHOOL REFERENDA

School Referenda

• 25 referenda since November 2008

• 9 have passed, 16 have not passed

• 20 capital referenda—6 passed, 14 did not pass

• 5 tax referenda– 3 passed, 2 did not pass

17

Ind

ian

a S

ch

oo

l Co

rpo

ratio

n C

ap

ital P

roje

cts

an

d T

ax

Re

fere

nd

a R

es

ults

, 20

08

-20

09

(Shaded e

ntrie

s p

assed; u

nshaded e

ntrie

s fa

iled)

Pro

ject T

ota

l

Da

teU

nit

Co

un

tyP

roje

ct

Am

ou

nt (m

il)T

ax

Ra

teV

ote

s Fo

rV

ote

s Ag

nst

Pct F

or

Pct A

gn

st

11/4

/2008

Barth

olo

mew

County

School C

orp

.B

arth

olo

mew

HS

buld

g re

nnova

tion

89.0

0.1

700

17,9

81

8,4

11

68.1

%31.9

%

11/4

/2008

Eva

nsville

-Vanderb

urg

h S

chools

Vanderb

urg

hN

ew

HS

& m

id s

chool; re

nova

tion o

f build

ings

149.0

0.1

400

50,0

30

21,3

20

70.1

%29.9

%

11/4

/2008

Fla

trock-H

aw

cre

ek S

chool C

orp

.B

arth

olo

mew

H

S/M

id S

chool re

nova

tions; e

lem

constru

ctio

n18.8

0.7

800

1,5

10

809

65.1

%34.9

%

11/4

/2008

India

napolis

Public

Schools

Mario

nS

chool b

uild

ing re

nova

tions

278.0

0.2

025

70,4

92

20,1

42

77.8

%22.2

%

11/4

/2008

Ric

hla

nd B

ean B

lossom

Monro

eR

enova

tion

35.0

0.3

560

2,6

88

4,4

16

37.8

%62.2

%

1/9

/2009

Noble

sville

School C

orp

.H

am

ilton

New

ele

menta

ry s

chool, re

nova

tion o

f build

ings

59.5

0.1

506

1,7

99

1,8

80

48.9

%51.1

%

1/1

3/2

009

Kankakee V

alle

y S

chool C

orp

.Ja

sper

New

mid

dle

school, re

nova

tion o

f build

ings

60.0

0.3

000

1,1

49

476

70.7

%29.3

%

2/3

/2009

Clin

ton C

entra

l School C

orp

.C

linto

nR

enova

tion/a

dditio

ns to

school b

uild

ings

22.6

0.6

500

219

1,3

27

14.2

%85.8

%

4/1

9/2

009

Mic

hig

an C

ity S

chool C

orp

.LaP

orte

Care

er/te

ch e

d c

ente

r contru

ctio

n39.5

0.1

320

1,2

23

2,5

78

32.2

%67.8

%

4/1

9/2

009

Moore

sville

School C

orp

.M

org

an

Mid

dle

School c

onstru

ctio

n50.5

0.3

140

1,6

74

2,6

89

38.4

%61.6

%

4/1

9/2

009

Moore

sville

School C

orp

.M

org

an

Hig

h S

chool re

nova

tion

45.7

0.2

325

1,7

80

2,5

64

41.0

%59.0

%

4/1

9/2

009

Nin

eve

h-H

ensle

y-Ja

ckson

Johnson

New

ele

menta

ry s

chool, o

ther re

nova

tions

26.0

0.2

800

647

1,6

22

28.5

%71.5

%

6/1

6/2

009

Delp

hi S

chool C

orp

ora

tion

Carro

ll H

S/M

iddle

School re

nova

tion

13.1

0.2

800

400

605

39.8

%60.2

%

6/1

6/2

009

Lake C

entra

l School C

orp

.Lake

HS

renova

tion/e

xpansio

n95.0

0.1

230

3,5

32

4,9

97

41.4

%58.6

%

6/1

6/2

009

Porte

r Tow

nship

Schools

Porte

r B

oone G

rove

HS

rem

odel

34.6

0.6

102

498

1,4

48

25.6

%74.4

%

6/2

0/2

009

Maconaquah S

chools

Mia

mi

HS

/Mid

dle

School re

nova

tion

19.4

0.2

390

590

772

43.3

%56.7

%

11/3

/2009

Bate

sville

School C

orp

ora

tion

Fra

nklin

/Rip

ley

Renova

tions o

f four s

chool b

uild

ings

28.0

0.2

020

1,1

85

1,5

44

43.4

%56.6

%

11/3

/2009

Beach G

rove

School C

orp

.M

ario

nTax re

fere

ndum

0.3

500

1,3

83

861

61.6

%38.4

%

11/3

/2009

Fra

nklin

Tow

nship

School C

orp

.M

ario

nTax re

fere

ndum

--genera

l fund

0.3

333

2,1

92

4,9

30

30.8

%69.2

%

11/3

/2009

Fra

nklin

Tow

nship

School C

orp

.M

ario

nTax re

fere

ndum

--transporta

tion fu

nd

0.1

667

2,2

40

4,3

95

33.8

%66.2

%

11/3

/2009

Perry

Tow

nship

School C

orp

.M

ario

nR

enova

tion/e

xpansio

n o

f 17 fa

cilitie

s98.9

0.2

641

3,8

51

4,0

25

48.9

%51.1

%

11/3

/2009

South

ern

Wells

School C

orp

.W

ells

Tax re

fere

ndum

0.1

250

609

559

52.1

%47.9

%

11/3

/2009

South

west D

ubois

Sch. C

orp

.D

ubois

HS

/Mid

School R

enova

tion/im

pro

vem

ents

22.5

0.5

900

861

698

55.2

%44.8

%

11/3

/2009

Tell C

ity-T

roy T

ow

nship

Sch. C

orp

.P

erry

Hig

h S

chool re

nova

tion/im

pro

vem

ents

10.0

0.2

800

749

772

49.2

%50.8

%

11/1

0/2

009

Ham

ilton S

outh

easte

rn S

chool C

orp

.H

am

ilton

Tax re

fere

ndum

0.1

000

8,3

09

1,8

38

81.9

%18.1

%

Com

pile

d b

y L

arry

DeB

oer, P

urd

ue U

nive

rsity

, from

new

s re

ports

, India

na S

ecre

tary

of S

tate

, Departm

ent o

f Local G

ove

rnm

ent F

inance a

nd c

ounty

cle

rk s

ourc

es.

18

School Referenda: What Seems to Matter?

• The proposed tax rate

• The existing debt levy per pupil

• Pupils per teacher and enrollment growth

• The change in the county unemployment rate

• The complexity index ( share of pupils eligible for the school lunch program)

School Referenda: What Seems to Matter?

• The proposed tax rate

How much extra will it cost taxpayers?

– An extra ten cents per $100 AV reduces the ―yes‖ vote by 2.6%

• The existing debt levy per pupil

How often have they been to the well?

– An extra $100 per pupil decreases the ―yes‖ vote by 2.5%

• Pupils per teacher and enrollment growth

How great is the need?

– One extra pupil per teacher increases the ―yes‖ vote by 10.6%

– An extra 10% enrollment growth increases the ―yes‖ vote by 5.6%

• The change in the county unemployment rate

How’s the local economy doing?

– A 1% increase in the unemployment rate over the past year decreases the ―yes‖

vote by 4.1%

• The complexity index ( share of pupils eligible for the school lunch program)

Renters who don’t pay property taxes (directly)? Urban areas where school quality has a

greater effect on property values?

– An extra 0.1 on the index increases the yes vote by 13.1%

School Referenda: What Doesn’t Seem to Matter—Yet?

• Capital referenda vs. tax referenda

• November election vs. special election

• Measures of income or wealth

• Share of parents in the voting population

• Share of retired people in the voting population

19