LAKEVILLE -- Union-North United School Corp. is going to Indiana Tax Court again, only this time it’s not a petition by a taxpayer.
The school corporation has appealed to the tax court over a final determination of the Indiana Department of Local Government Finance to cut the 2011 expense budget by $1.8 million.
The DLGF is a state agency responsible for ensuring property tax assessment and local government budgeting are carried out in accordance with Indiana law.
In December, Superintendent Terry Barker announced the DLGF had requested the cut from the corporation’s proposed $8 million general fund budget.
The proposed budget was $33,000 less than requested in 2010 and followed $1.4 million in cuts which included 22 teachers and non-certified staff.
However, the DLGF disallowed payments for General Obligation Bonds in 2010 for the purpose of financing certain operating deficits.
The corporation’s petition says the levy was needed to service the payment of principal and interest on the General Obligation Bond and submitted an appeal for reconsideration of the adjustments.
“Otherwise we'll have class sizes of a hundred," said Barker back in December.
However, on appeal, the DLGF stuck with its decision.
“Basically because the projected revenues (or tax base) were insufficient to fund the adopted budget submitted to the department,” said DLGF communications director, Mary Jane Michalak.
With the $1.8 million budget decrease, DLGF adjustments include increasing the temporary loan obligation from zero to nearly $1.25 million and decreasing the corporation’s estimated expenditure from the debt service fund by $435,030.
Union-North’s petition to the tax court says the adjustments are contrary to the DLGF’s statutory obligation to ensure that the corporation has sufficient levies and appropriations to pay its debt service obligations and even if the DLGF did have such authority, it would be erroneous as a matter of law.
At the executive session school board meeting the litigation was discussed in closed session, however the superintendent and trustees declined to discuss it in public.
“We’re working our way through it and when it’s an appropriate time we’ll comment,” said Barker. “For now we don’t want to talk outside our attorneys who are working to resolve it.”
The corporation will be represented in tax court by Barnes and Thornburg of Indianapolis. The DLGF is represented by Attorney General Greg Zoeller.
Marion County was elected for evidentiary hearings.
Staff writer Virginia Ransbottom: email@example.com 574-235-6344
For a court document in the case of Union-North United School Corp. vs. the Indiana Department of Local Government Finance, click here.