In the face of legislative changes that are likely to limit funds for local governments all over the state, Clay Community Schools will continue its current approach to finances.

That was the message from Director of Financial Affairs John Szabo when he addressed the Clay Community School Board during its recent meeting.

“We have to continue to manage our finances in a very fiduciarily responsible way, as we’ve done in the past,” Szabo said, noting the school corporation has to be as responsible as possible, keep the budget trimmed.

But as cities, towns, counties and schools around the state scramble to deal with changes enacted by Gov. Mike Braun and the Indiana General Assembly, local school officials are relatively calm, confident that the corporation has put itself in a good position.

Szabo said Braun had “a very, very aggressive plan” for property tax cuts coming into the 2025 session, and while the house and senate scaled back the initial proposal, limits on local entities are set to be phased in over the next several years.

For example, Szabo said that by 2031, there will no longer be a standard deduction on property tax bills, but it will be replaced by a supplemental homestead deduction that will deduct two-thirds of a home’s value from what can actually be collected.

To put numbers to it, Szabo said that the average home value in Clay County is $250,000 but with current deductions, the net assessed value is only $125,000, meaning that taxes are only collected on half of the value. Under the new plan, the net assessed value would be reduced to $80,000.

Additionally, residential non-homestead properties, long-term care facilities and agricultural land will have a phased-in deduction that will be 33.4% by 2031.

“The amount of tax we can collect for that will be capped,” Szabo said.

Beginning in 2028, school corporations will no longer receive local income tax distributions.

“These are all things that on the surface are positives for many in our community, but on the whole cause some problems for us,” Szabo said.

He did note, however, that revenue will continue to grow, just not at the rate it has previously.

“It’s not like they’re going to take money away from us,” Szabo said.

He presented a chart that noted that the current tax levy is $10,236,962, a number that would have been expected to grow to $11,545,191 by 2028 under the old plan. Under the new system, the amount would be estimated at $10,735,181 in 2028.

Szabo noted that general obligation (GO) bonds remain a way to work outside the operating fund, so the school’s recent bond issuance was excellent timing.

School officials will also have to look closely at bus replacement and the operating fund each year.

“We don’t generally spend what we budget in the operating fund,” Szabo saide.

While Szabo offered a generally positive picture in the face of challenges, School Board President Tom Reberger said he did not go far enough.

“You beat around the bushes on how good shape we are in,” Reberger said. “I believe we were named the No. 1 school corporation in the state of Indiana as far as financial condition.”

Reberger was referring to a recent study, noted in a June 3 article in The Brazil Times, in which Clay County was ranked top in the state of Indiana for “school value index,” indicating getting the most out of schools relative to property tax rate.

Szabo refused to tax sole credit for any of this.

“That didn’t happen overnight, and that was something we probably should have been honored for before I came into this position,” Szabo said. “There are many school corporations in the state that are very envious of the position we’re in.”

The study by SmartAsset also ranked Clay County as the top county in the state for property tax value.

“When I read the article, I was thrilled,” Reberger said.

Supt. Tim Rayle joined in the praise of Szabo.

“John does a great job. He doesn’t take any credit, but 100% it’s John,” Rayle said. “In my office, I’m always saying, ‘We can’t afford that, we can’t afford that.’ And John is always saying, ‘Hold on, there might be a way that we can afford that.’”

“We use the terms wants vs. needs,” Szabo replied. “I don’t think there’s much that we need that we aren’t striving to get.”

In terms of those needs, Szabo offered a status update on the bond issuance.

He noted the corporation should receive bids for bonds at the end of September and then secure and accept proceeds by the end of October.

No payments will be due until June 2026, with a six-year repayment term.

The first construction bid package will also go out in September. It will include high-priority projects such as chiller at Forest Park Elementary, Clay City Elementary and Clay City Junior/Senior High School.

There will also be replacement of a chiller pump at Van Buren Elementary, a new boiler at North Clay Middle School and beginning to do phases of roof replacement at Jackson Township Elementary.

“There’s no shortage of things we can do to make our schools better,” Szabo said.