Rising assessed values help Carmel Clay Schools offset inflation, drop in state funding

The jump in assessed value of Carmel homes – and thus increased total tax bills – is set to help Carmel Clay Schools offset a decrease in state funding caused by declining enrollment and increased costs in several areas impacted by inflation and other factors.

The Carmel school board on Nov. 27 voted 3-0 to authorize the district to advertise a public hearing set for Dec. 18 regarding the appropriation of nearly $3.9 million, with $2 million of that total a result of property taxes rising beyond what CCS expected to collect when the school board approved the 2023 budget.

“Our assessed value went up considerably for 2023. When we built the budget 18 months ago, we assumed a 5 percent increase, but it turned out (to be) about 13 percent,” CCS Associate Superintendent Roger McMichael said at the meeting. “We needed that money, because we also had a shortfall in our education fund due to declining enrollment.”

Before increasing by 36 students this school year, the CCS student enrollment dropped by approximately 190 students a year the previous three years. During that time, CCS cut approximately 20 classroom teaching positions through attrition.

A 2018 demographic forecast projected the student population to decline by 629 students between 2020 and 2029.

“The gradual decline is earlier than expected, but the forecast did not anticipate a pandemic, the increase in home values and the escalating mortgage interest costs,” McMichael stated in an email.

Without the unexpected increase in property taxes, CCS would have been forced to cut $2 million elsewhere, McMichael said.

Of the $3.9 million proposed to be appropriated, CCS administrators are proposing $1.8 million for the operating referendum fund to cover instructional salaries and benefits; $300,000 for the safety referendum fund to cover school resource officer salary and benefits; $1.3 million for the operations fund to cover repair, facilities and other costs that were higher than expected because of inflation; and $487,167 for the debt service fund, as the 2023 bond was settled after the 2023 budget was completed and debt service payments were not appropriated during the budget process.

The public hearing is set to take place during the Dec. 18 school board meeting, which begins at 6 p.m. at the Educational Services Center, 5201 E. Main St. in Carmel.