MAY
2016

 

By
Larry DeBoer
 
Professor of
Agricultural Economics
Purdue University

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05-26-16

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What's Been Happening with Indiana School Referenda?


Indiana got pretty excited about the primary election earlier this month. We played a role in the presidential sweepstakes, and the election result in November might affect our lives someday.  But in 10 school districts the election results will affect the lives of students, teachers, parents and taxpayers right away. Ten school districts voted on tax and capital projects referenda.

We’ve had 138 school referenda since November 2008, and 76 have passed. That’s 55 percent.  November 2008 was the first election when the state required referenda to approve borrowing for big capital projects. There have been 61 capital projects referenda since then, and 49 percent have passed. We’ve also seen 77 tax referenda, which raise taxes and revenue for general purposes. Sixty percent of those have passed. 

This May, eight of 10 referenda passed, which continued a trend. More referenda have passed lately. From November 2008 to November 2010, 24 of 60 referenda passed, just 40 percent.  Since then, 52 of 78 have passed, which is 67 percent. 

Why has the passing rate increased? It might be the improved economy. Referenda are more likely to pass in school districts with higher incomes, higher home values and more business assessed value. Higher incomes mean voters have a greater ability to pay higher taxes. Higher home values indicate higher wealth, another measure of ability to pay. People are more likely to vote yes if they can afford it. A lot of business property is owned by people who live outside the school district. They pay the higher taxes, but they can’t vote in the referendum.

The recession reduced all of these economic measures, and may have kept some referenda from passing.  The recovery has been slow, but incomes, home values and business assessments have all increased.  That has probably made people more willing to vote yes. 

There may be another reason referenda are passing more frequently. School leaders have gotten better at referenda strategy. Since November 2011 there have been 78 referenda in the five May and five November elections. Almost three-quarters of those referenda have been in May, and 74 percent have passed. In November only 45 percent have passed. School leaders are scheduling more referenda in May, when they are more likely to win.

Why are passing rates lower in November? Maybe because people turn out to vote in the statewide and national elections. They see a school referendum on the ballot that asks, “Do you want your taxes raised?” They vote no. In May, those voters don’t show up, and the parents rule.

Of course, this May there was a lot of excitement about national elections, so I wondered whether the results would be more like November. Nope.

There may be another reason for that, though. This May, seven of the 10 school districts had proposed referenda before. They had experience with referenda campaigns. All seven passed.  Two of the three “rookies” lost. Six of the repeat winners were asking for reauthorizations of tax referenda that had been passed in 2009 or 2010. Maybe their voters either liked what the schools did with the money the first time or recognized that this wasn’t a tax increase from current tax rates.

Districts that won before came back and won again. But since November 2008, 14 school districts have proposed referenda after having lost before, and eight have won. Several have won more than once. That’s a 57 percent passing rate for districts that were 0-for-their-first-try.  Campaign practice appears to make perfect.

There was one referendum result that surprised me. The Argos district in Marshall County lost 59 percent to 41 percent. Argos has a very small enrollment, just 611 students. School districts with enrollments under 1,000 have proposed 12 referenda since 2008, and 11 have won. Argos was the first to lose.

The wins in really small school districts are exceptions, though. Rural districts have had less success than urban districts in general. By one rural/urban classification, 64 percent of referenda in urban counties have passed, compared with 45 percent in mixed or rural counties. Rural districts usually have lower incomes, lower home values and less business assessed value, all factors that work against passage.  

Will all these trends hold up in the future? Come November, we’ll test them again.

 

 

Writer: Larry DeBoer
Editor: Keith Robinson