Hamilton Southeastern Schools is moving toward a possible early renewal of its operating referendum, with district officials saying recent changes in Indiana property tax law could significantly reduce future revenue.
At a Wednesday night work session, Chief Financial Officer Tim Brown and consultants from Policy Analytics presented the HSE Board of School Trustees with an early framework for a referendum question that could go before voters in November. The proposal includes a maximum rate of 36 cents per $100 of assessed value over an eight-year term.
District officials emphasized that the 36-cent figure would be the maximum allowed over the life of the referendum, not necessarily the rate HSE would collect each year. Under state law, the district must ask voters for the highest rate it may need during the full term. HSE officials said the actual rate would be set annually through the budget process and would begin lower.
The district’s current operating referendum rate is .1995 cents per $100 of assessed value. Consultants told the board that keeping the current rate in place would likely generate less money in future years because of Senate Enrolled Act 1, the property tax measure approved by the Indiana General Assembly earlier this year.
The Policy Analytics presentation projected that changes under SEA 1 could reduce HSE’s expected referendum revenue by an estimated $45.3 million between 2026 and 2031. The district’s net assessed value, which has grown steadily over the past decade, is projected to decline over the next several years as new homestead deductions and other property tax changes are phased in.
District officials also pointed to broader school funding concerns. According to HSE’s presentation, the district ranks 370th out of 376 Indiana school districts in tuition support per student. HSE receives $7,121 per student in tuition support. If the district received the average public school, non-charter rate of $7,490, HSE officials said it would mean more than $7.4 million in additional annual revenue.
On the operations side, HSE is projected at $1,869 per student in net levy funding, placing it in the 38th percentile. The district said reaching the state average of $1,952 per student would generate more than $1.6 million in additional revenue.
The district’s proposed referendum spending plan totals about $31.3 million. The largest share, an estimated $29 million, would support salaries and benefits for certified teaching positions, equal to roughly 275 staff members or the staffing of about five school buildings. The plan also includes about $700,000 for behavioral health therapist services, providing 13 master’s-level therapists across the district, and about $1.6 million for school safety and security, including school resource officers, the director of school safety, traffic security, after-school event security and safety equipment.
Superintendent Dr. Matt Kegley said the district has already taken steps to reduce expenses before asking the board to consider an early referendum renewal. HSE says it has identified more than $7 million in potential ongoing reductions over the past two years, including staffing changes tied to enrollment, department and operational efficiencies, salary hold decisions, contract reviews and expanded partnerships.
“These steps were important before asking the Board to consider an early referendum renewal,” Kegley said in a district news release. “Even with these cost-cutting measures, the projected loss in expected revenue due to Senate Enrolled Act 1 would make it difficult for HSE Schools to maintain the level of programming, staffing and student support our community expects.”
One point likely to draw voter attention is the potential taxpayer impact. Because state law requires the ballot language to use the maximum rate, the question would show the effect of the full 36-cent rate. For a median residence, rounded up under state rules to $400,000 in assessed value, that would show an annual tax bill increase of about $700.
However, the district and consultants said that is not the expected initial tax impact. Their models show a lower estimated rate in the first year, with the rate potentially rising over time depending on assessed value, revenue needs and annual board budget decisions. Brown says he will propose a 2027 referendum tax rate of .2275 for 2027, assuming the referendum passes. That would mean the homeowner with a median home assessed valuation would pay $3 more per month in 2027 in property taxes
The board is expected to vote June 10 on a proposed maximum referendum rate and levy. If approved, community meetings and information sessions would follow through the summer and fall. Election Day is Nov. 3.
At Wednesday’s work session, school officials emphasized the proposal for a new 8-year referendum is projected to raise slightly less revenue over the 8 years, compared to the amount of tax that would have been collected under the current referendum rate with no change in the state law governing property taxes.
If voters approve the renewal, the board would set the 2027 referendum rate as part of the annual budget process. If the measure fails, district officials have said HSE would need to consider additional reductions to staffing, programming and student supports.