Board gets primer on SEA1

State legislation passed this year is going to impact tax funding for local government units in the coming years.

What has been missing is a clear picture of the depth and breadth of that impact.

Jay School Corporation now has a better idea of what to expect.

Jay School Board heard a presentation from Brent Habegger of financial consulting firm Baker Tilly on Monday about the expected impact of Senate Enrolled Act 1, with superintendent Jeremy Gulley saying he expects difficult decisions are ahead.

The board also gave business manager Shannon Current permission to advertise the 2026 budget and approved a renewal of its health insurance plan for employees with Physicians Health Plan of Northeast Indiana at a 5.4% increase.

Habegger outlined the following changes to tax revenue as a result of SEA1:

•Overall homestead tax deductions will increase over the next five years.

•Homestead tax credits will increase beginning in 2026.

•Property tax deductions and credits will increase over the next five years for agricultural land.

•The business personal property minimum for taxes will increase to $2 million in 2027, up from $80,000.

•Local income tax distributions to schools will end in 2028.

“A lot of moving parts with the new legislative impacts from 2025,” said Habegger.

He advised the board to expect minimal increases in money for the education fund, and that any new revenue for the operations fund could be offset by tax credits and sunsetting taxes. He said the loss of local income tax distributions will cost the school corporation more than $500,000 annually.

Habegger added that new per-student funding will likely not keep up with inflation. He noted that curricular materials, which were previously funded separately, have now been rolled into the per-student funding.

He recommended developing short-, medium- and long-term plans for addressing the projected fiscal changes.

Following the presentation, Gulley expressed concern about the financial outlook and said raises for staff will likely become more difficult. He noted that five teaching positions were already eliminated for the 2025-26 school year.

“The good news is, five or six years of fiscal conservatism and good choices — what’s your cash balance? Strong,” he said. Cash balances are projected at $8.21 million for the education fund and $6.41 million for the operations fund at the end of 2025. “We built it for a reason — to weather storms, to buy time to make adjustments. And I think what you’re hearing tonight is you have time, but you don’t have all the time.”

He referred to the Barton Coe Villamaa building capacity study shared in January — it is required by state law — that showed the elementary schools and the percentage of their capacity in use:

•Bloomfield: 375 capacity, 73.9% utilized

•East: 486 capacity, 81.9% utilized

•East Jay: 859 capacity, 62.4% utilized

•Redkey: 362 capacity, 50.8% utilized

•West Jay: 387 capacity, 57.4% utilized

Gulley said the school corporation will likely need to seriously examine its elementary schools with a focus on efficiency.

“I don’t think it’s a good idea to talk about the R word — referendum — until we can demonstrate to folks that we, in this community, our school district, is the most efficient we can be,” he said. “I think we better answer that question first before that’s even brought up.”

Board members Ron Laux, Donna Geesaman, Marcie Vormohr, Chip Phillips, Jon Eads, Chad Towell and Aaron Clark also approved advertising the 2026 budget at $42.65 million, up 2.8% from the $41.49 million budget for this year.

The budget includes $23.9 million in the education fund, $11.64 million in the operations fund, $7 million in the debt service fund and $20,000 in the rainy day fund. (The pension debt service fund that previously appeared in the budget has been removed because the debt was paid off earlier this year.)

Current projects the education and operations funds to be balanced for 2026. She noted that achieving a balanced budget required $400,000 in cuts to travel and supply expenses.

The capital projects plan, which is required as part of the budget, includes $458,000 in roof replacement projects in 2026, $330,000 in metal siding work in 2027 and $415,000 in roof replacement work in 2028. It also covers expenses such as concrete work, lighting and parking lot upgrades.

The bus replacement plan calls for the purchase of four new buses in each of the next four years.

The budget will be advertised in the newspaper this week. A public hearing is scheduled for Aug. 11, with adoption expected Sept. 15.

The board also approved its insurance committee’s recommendation to renew with Physicians Health Plan at a total increase of $224,000. (Dental insurance through Delta Dental was renewed at an increase of 45 cents per pay period for individuals and $1.48 for families. Vision insurance is under a five-year rate freeze.) The original proposal was for an $777,000 increase (about 18%), but adjustments to deductibles and other plan details reduced the rate increase.

Ryan Abel of LHD Consultants explained that Jay School Corporation continues to see increases due to an “extreme” level of high claimants. He noted that high claimants accounted for $1.3 million in claims two years ago, $2.9 million last year, and $2.1 million in the first eight months of the current year.

The board also approved increasing the school corporation’s contribution for support staff insurance plans by $800, bringing the total to $8,000 for single plans and $17,200 for family plans. Any changes for certified staff must be made through collective bargaining.

In other business, the board:

•Held its hearing on collective bargaining with Jay Classroom Teachers Association. There were no comments from the public.

•Approved the following: a $189,000, three-year agreement with CENTEGIX for its crisis alert system; its meeting dates through 2026, with meetings typically at 5 p.m. on the third Monday of each month; a supplemental stipend of $5,000 to incentivize fully licensed teachers; a leave of absence for junior-senior high special education teacher Michelle Bennett; extracurricular assignments including assistant boys basketball coach Zach Fullenkamp and assistant wrestling coaches Gaven Hare and Chad Chowning; the teacher evaluation plan, with no changes from the previous version; an update to junior-senior high student fees; and Business U Curriculum for grades seven through 12.

•Heard an update from Gulley on the back-to-school process, which included a new teacher orientation on Monday. A staff breakfast was held Tuesday, following by a staff meeting. Jay Schools will start classes for students on Thursday.

•OK’d the hiring of various new staff members, including East Jay Elementary School fourth grade teacher Kyle Francis.

•Accepted the resignations of East Jay fourth grade teacher Olivia Good, Bloomfield and East elementary school physical education instructor Katie Robbins and instructional assistants Samantha Nunez and Amy Hawbaker.

•Reviewed a summary of federal grants the school corporation receives. The school corporation expects to see reductions in grant amounts in Title II, Title III and Title IV.

•Accepted donations of $1,000 each from Fisher Packing and Portland Forge for projects related to the pool at the junior-senior high school.