A Citizen's Guide to Indiana

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My thoughts on transgender athletes and school teams

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Idea: I have opinions and the Internet needs to know about them.

So, yesterday, I had a post talking about the Indiana General Assembly’s requirement that schools expressly designate their teams as male, female, or co-ed; prohibiting people born biologically male from participating on teams designated as female regardless of that person’s gender; and requiring a grievance procedure. I later updated the post to reflect that IPS is under an injunction preventing it from complying with the statutory requirement because the Southern District of Indiana has ruled that doing so would likely violate a student’s Title IX rights. (My present — not thoroughly researched — view is that, until the Seventh Circuit finishes its review of the District Court opinion, schools are in a bit of a pick-your-poison situation.)

Not that anyone asked, but what’s my personal view on transgender athlete participation in sports consistent with the athlete’s gender? Don’t the physical effects of testosterone give an advantage to a person born biologically male who is gendered female? (And, my apologies if I’m getting the language wrong here. The discussions around this subject have been fluid, and I’m sure I haven’t kept up.) Isn’t that unfair to the girls born biologically female who didn’t have as much testosterone dumping into their body?

Maybe.

But: a) I think the concern is more theoretical than real; b) In this context, I care a lot more about the rank and file athletes than the tippy-top elite athletes; and c) This would be just one more accident of birth that contributes to athletic ability. Ultimately, I think the costs of excluding transgender athletes outweigh the benefits.

My perspective is that of an average athlete with step-brothers and, for that matter, a step-family who are insanely good athletes. Growing up, I wasn’t exactly bad at sports. I was too skinny, but I had good reflexes and, as I got older, decent coordination. However, my step-dad and his sons were really, really good at sports. I also went to a big high school where only the really good athletes made varsity. So, by comparison, I thought I wasn’t very good. But I liked playing. I still remember first grade, Charles Elementary School, always last picked at kickball. Then one day I caught a kicked ball and got the player out. Brant, one of the very athletic kids, gave me a high five, and I don’t recall being picked last after that. It was glorious. Also, being skinny and having good reflexes made me a pretty fair dodge ball player. I still remember a pretty inspired set of dodges during gym in Mrs. Busick’s fifth grade class … but I digress.

When I became a father, my kids were in a similar position athletically, and we played a lot of rec soccer over the years. We didn’t travel, and they didn’t play varsity. All of this is to say that, when I think sports, I’m thinking more of the mid-level athletes. The junior varsity. The support players. The teams who never win sectionals. The people who find value in sports even if they aren’t grand-champions of the world. Sports are about team, camaraderie, competition, working toward a goal, discipline, joyful movement, anticipation of an outcome, the thrill of success, coping with defeat, and a lot more.

So, in that context, how much good are we doing by excluding a person from competing with members of their own gender due an accident of them being born with a biology inconsistent with that gender? And I know this just sounds like so much mealy-mouthed bullshit to people who think that if you’re born with a penis you’re a male and if you’re born without one, you’re a female, and that’s that. I know because there was a time when I thought like that. Turns out life is more complicated.

I think we’re doing more harm than good. First of all, I think the number of people born biologically male and compete for championships in female sports is going to be a very, very small number. Certainly not a big enough number to justify the moral panic on the issue. The idea that cisgender boys are going to pretend to be girls in order to win championships in girls’ sports strikes me as far fetched. And if we’re not talking about championships; if we’re talking about routine day-to-day competition, I think any biological advantages from testosterone or whatnot is going to be just one of a lot of biological accidents that contribute to athletic success. Even among people born biologically female, there is going to be a difference in testosterone, height, speed, strength and so forth that aren’t governed by “merit” like hard work, training, and studying the sport. Short girls who want to play volleyball still have to deal with the fact that some girls have tall parents, become tall themselves, and end up with an athletic advantage.

My personal experience with transgender kids isn’t extensive or necessarily drawn from a representative sample, but — not to put too fine a point on it, most of the kids I know who fit in this category don’t strike me as gifted athletes.  They’re going to get waxed by most of the other kids who play against them regardless of gender. So, if they want to play sports, what are we gaining by excluding them from athletic teams consistent with their gender? Nothing. We’re doing very real harm. Maybe we’re doing it in service of excluding those transgender kids who are gifted athletes, but like I said, that’s going to be a small number (because overall, transgender or not, the number of gifted athletes is limited.) And I don’t know that, in most cases, the advantages conveyed by having more testosterone at birth are different in principle from other accidents of birth, not related to one’s sex, that contribute athletic advantages.

So, there you have my two cents.

 

 

Indiana General Assembly Requiring Schools to Adopt Anti-Trans Athletic Policies

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The General Assembly adopted HB 1041 which was vetoed by Governor Holcomb and then subsequently adopted over his veto. It enacted IC 20-33-13 which, among other things, requires schools to adopt anti-trans athletic policies. Specifically, the law requires schools to designate an athletic team as one of: boys, girls, or co-ed. It then prohibits a child who was born biologically male at birth from competing on a team designated as a girls’ team.

On top of dictating the legislature’s policy on school sports, it requires schools to establish a grievance procedure for a student or student’s parent if they want to complain about another student’s biology. Specifically, the legislation provides:

  Sec. 5. (a) A student or parent of a student may submit a grievance to a school corporation, public school, nonpublic school, or association for a violation of section 4 [the section forbidding children born biologically male from participating on a girls’ team] of this chapter.

(b) Each school corporation, public school, nonpublic school, and association described in section 4 of this chapter shall:

(1) establish and maintain a grievance procedure; or

(2) maintain a grievance or protest procedure that the school corporation, public school, nonpublic school, or association established before July 1, 2022;

for the resolution of a grievance submitted under this section.

(emphasis added). If a school violates the chapter — either permitting the child to participate on a forbidden team or failing to adopt a grievance procedure — the school is on the hook for attorneys fees, actual damages, and an extra $1,000 in liquidated damages. Honestly, the attorney’s fees are the big ticket item for something like this. These kind of fees really have a way of adding up quickly when someone other than a client is footing the bill.

The reason I was prompted to write this post is because the West Lafayette school board introduced a policy that would prohibit what the statute requires the school to prohibit and would implement the required grievance procedure. The Lafayette Journal and Courier ran a story that was pretty clear about the State mandating that the school do this. Nevertheless, the comment section (why do I go to the comment section?) reflected a sense by at least a couple of readers that the School was pursuing the policy on its own initiative. That’s simply not the case.

Edited to add: The Southern District of Indiana has issued an injunction at least to one particular case in Indianapolis. I guess I’m not entirely sure where that leaves schools on a statewide basis.

Eighteen Years

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Still pounding out pixels after all these years.

Masson’s Blog is old enough to vote. It’s tough to decide how much has changed since 2004 or remember exactly what that was. One cultural benchmark I like to use is the Dazed and Confused measurement. That movie was released in 1993 and depicted a day in 1976. The cultural shifts between 1976 and 1993 were enormous. It might be due to my age, but the differences between 2004 and 2022 don’t seem anywhere near as pronounced. 1976-1993 gets you from Gerald Ford to Bill Clinton. 2004 to 2022 gets you from George W. Bush to Joe Biden. 1976-1993 gets you from no computers basically anywhere to desktops in a lot of homes. 2004-2022 gets you from flip phones to smart phones. What do we have in the latter time period that even compares to Evel Knievel, Muhammad Ali, and KISS? Probably something, actually. Back in the late 70s, I was a little kid, finely attuned to all of the pop culture phenomena. Now I’m a middle aged dad, probably not far from AARP solicitations. I’m oblivious.

I started this blog in the last days of a Democratic governor. Joe Kernan had just lost an election to Mitch Daniels. There hasn’t been a Democratic governor in Indiana since. Now we’re so far gone from purple to red that Indiana was the only state to elect an election denier to Secretary of State. And not just by a little, resoundingly. They did so in spite of the candidate’s poor past job performance, questions about personal enrichment from campaign funds, questions about whether he complied with residency requirements in past races, and a very qualified Democratic candidate. Back then, Democrats and Republicans battled it out for control of the House of Representatives. That ended following the 2010 election where the Republicans enjoyed massive gains and then leveraged those gains through favorable electoral maps.

Republicans might not have needed those maps to maintain their majorities however. Another thing that changed has been the media landscape. Blogs were in their infancy and traditional media was still relatively strong. Over the years, blogs rose briefly and then fell as Facebook and Twitter became ascendant, algorithms directed attention, Google Reader was killed, and RSS feeds became unused relics. Meanwhile, traditional media was consolidated and hollowed out. More emphasis was placed on cheap wire feeds and opinion pieces rather than local reporting. Those feeds and opinions – along with the classified ads – were easily co-opted by non-local sources. People’s attention is fractured and, to the extent they get news, its usually national in scope and often biased toward the reader’s tribe. I don’t know if the average citizen ever had a lot of patience for detail and nuance, but if they did, they no longer do. Create, like or share a nostalgic meme complaining about kids these days and call it good.

I stopped posting as frequently over the years. I’m probably as guilty as anyone about jumping over to social media. A quick hit on Twitter or Facebook largely scratched whatever itch got me blogging. And those quick hits usually got a lot more attention than the detailed stuff I post here. Even here, I learned that a quick post about Daylight Saving Time got a lot more attention than some nuanced explanation of tax legislation or whatever. As people who have stuck with me this long know, my subject matter has become painfully focused on education issues generally and West Lafayette schools in particular. My kids are nearing the end of their days there, however, and I wouldn’t be surprised if my focus changes. I think schools are extremely important for communities, whether you happen to have kids in them or not, but I can’t imagine I will fee that as acutely when those public schools are no longer part of my family’s day-to-day life.

And I guess that brings up some more big changes. When I started this blog, I was in my early 30s. I had a very young family. I was only a few years removed from working with the Legislative Services Agency and a good deal of my day-job was tied up doing collections. Now, I am in my early 50s and am nearly an empty-nester. I have not done collections work for a decade, and my main focus is municipal law as county attorney for Tippecanoe County. When I started blogging, I was a relative newcomer to the area and, in fact, lived up in Monticello. Now, I’ve lived in West Lafayette for over a decade and feel deeply tied to the County and the city.

I guess I don’t have any big thoughts about What It All Means. The Internet is awash in hot takes, so I suppose it can do without one more for the moment. I’ll keep blogging when the mood strikes.

School Corporations Lose Round In Charter School Takings Lawsuit

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The Indiana Court of Appeals has ruled in favor of the State of Indiana and against several school corporations, Lake Ridge School Corporation, School City of Hammond, and West Lafayette, in their suit against the State. The suit challenges a statutory provision requiring them to sell school property not used for class room purposes to charter schools for $1. The Court of Appeals held that schools can’t sue the state for taking without just compensation because municipalities are just divisions of the State. Under this rationale, the State is just taking from itself.

The Court of Appeals opinion did not discuss the fact that these buildings were built with local tax dollars. In West Lafayette’s case, the citizens of the community invested in what has recently been appraised as a $6 million asset. Under this opinion, there is no recourse if the State commandeers that asset for the benefit of the State generally. The Court of Appeals only considered federal opinions that held that there was no claim under the Fifth and Fourteenth Amendments by a municipality against state government. It declined to conduct a separate analysis under the takings clause in the State Constitution: Article 1, section 21. The opinion does not grapple with Board of Commissioners of Tippecanoe County v. Lucas, 93 U.S. 108 (1876) ( “the legislature of a state possesses the power to direct a restitution to taxpayers of a county or other municipal corporation of property exacted from them by taxation, into whatever form the property may be changed, so long as it remains in possession of the municipality.” (emphasis added)

If there is no recourse under either takings clause, my position has been that this is a violation of Art. 10, §1 of the Indiana Constitution which provides requires the General Assembly provide a “uniform and equal rate of property assessment and taxation.” Happy Hollow was paid for by property taxes that were not “uniform” to those that you would find in, say, unincorporated Tippecanoe County. That non-uniform taxation is appropriate insofar as it is used to benefit the school district. It is inappropriate to use taxes peculiar to the District to benefit the State at large.  See City of Richmond v. Scott, 48 Ind. 568, 572-73 (Ind. 1874) (determining that unequal rates of municipal taxation do not violate Art. 10, §1 because “taxes for corporate purposes cannot be equal. The wants and necessities of towns and cities cannot be equal. Some require a higher and some a lower rate of taxation.) I don’t know that this issue was raised to the court. I assume this will be appealed to the Indiana Supreme Court. If the Justices say that there is no recourse under the takings clause because the State is merely taking from itself (because municipalities are merely subdivisions of the State), then perhaps subsequent litigation could challenge the $1 sale requirement based on the uniform taxation requirement.

Statewide: Voters Reject Three School Operating Referendums

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Eric Weddle, writing for WFYI, reports that voters rejected three operating fund referendums in the state: Delphi schools in Carroll County; Brown County Schools; and Medora Schools in Jackson County. State legislators are increasingly putting their thumbs on the scales against these local school funding referendums by requiring confusing or misleading ballot language:

Education leaders and advocates had warned new language required on the ballot could give voters the wrong idea of how much property-tax they could face. Last year, a law was enacted that requires the ballot question to include the estimated average percentage of property tax increase paid to the school district if the levy is approved.

Local government finance and your property tax bill is something the average citizen doesn’t understand very well. If the supporters of the school system don’t have the resources or know-how to engage in some serious voter education prior to these votes, your average voter is just going to see “should we raise your taxes by BIG PERCENTAGE for your local schools?” As ever, my focus is on West Lafayette Schools. I believe we have to renew our referendum in the 2024 election. I suppose I can count myself lucky that my kids will have graduated by the time that funding source is as risk. But I think schools are of critical importance to the community, not just the families who currently have kids in the system. As long as the State inadequately funds our schools but allows local communities to choose to provide adequate funding to their schools, communities should take advantage of that option. It’s a shame they have to navigate State imposed procedural hurdles designed to trip them up. (I haven’t researched the language, but I assume that – just to keep our existing referendum rate in place, we’ll have to put language on the ballot that pretends the rate is not in place, insinuating that voters will see their taxes increase from present rates if the referendum is approved.)

It’s not all doom and gloom though, four communities voted “yes,” to operating referendums: Monroe County Community School Corp., MSD of Southwest Allen County, Southern Wells Community Schools, and Westfield Washington Schools.

 

Pro-tip: Don’t take a homestead deduction in one district and run for office in another.

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I’ve been so focused on West Lafayette school board stuff, that I’ve neglected to follow up on the state’s Secretary of State race. As I’ve said before, you should absolutely vote for Destiny Wells and against Diego Morales. This is not primarily a partisan thing. You’ll notice any number of D v. R races where I’m not going out of my way to publicize a particular opinion. I know plenty of Republicans who think that Morales will particularly be bad for this position. James Briggs, writing for the Indianapolis Star, has a column noting the rumors and the evidence that Morales — running for the top election spot — did not actually live in the district where he was running in 2018.

This struck me because it touched on a running joke in my family. Back in 2018, the kids were on YouTube pretty actively. They were getting absolutely hammered with Fourth District primary campaign ads. Someone who opposed Morales was running ads pretty heavily on that platform such that my kids started joking about it. “Dishonest Diego Morales: He Doesn’t Even Live in Our District.” So, the “doesn’t even live in our district” tagline somehow worked itself into our family’s catalogue of inside jokes. When he became the Republican nominee, I sent a news article  to our family group text. The response was immediate.

Basically what Briggs notes is that Morales was running in the primary for the Fourth District which does not include Marion County where he was taking his homestead deduction. Per Briggs column:

Morales’ record suggests he committed a Level 6 felony by voting in a precinct where he did not live, said Luis Fuentes-Rohwer, an Indiana University law professor who specializes in election issues and provided analysis for me based on available information.

Morales’ version is that he lived in a condo in Plainfield rather than the 4,000 square foot home in Marion County that he and his wife owned. The column is worth a read. Regardless of that, Destiny Wells is the better choice.

West Lafayette School Board: Campaign Finance Reports

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Candidates in Indiana are required to file campaign finance reports at various times of the year. One of them, the “pre-election” report was filed on or before October 20, 2022. I went ahead and compiled the reports for the West Lafayette School Board candidates. Before I offer any commentary, I’ll go ahead and remind everyone that I’ve already recommended that West Lafayette voters would be well-served voting for Karen Springer, Rachel Witt, and George Lyle for the reasons I articulated an in an earlier blog post.

Click for West Lafayette School Board Candidate 2022 pre-election campaign finance reports.

It’s public record, but I’ve redacted the street addresses and phone numbers for the individuals involved who show up on the reports. Some observations:

  • Rachel Witt did not have to file a CFA-4 because her receipts and expenditures were less than $500 — a limitation she imposed on herself at the beginning of the campaign. She had posted a summary of expenditures which I went ahead and included for completeness. She made “Proud of our WL Schools” signs (in the hopes they could serve a non-campaign function in the future) and cut up other old signs and painted them (she’s an artist!) with “Rachel Witt” sign toppers.

 

  • Laurence Wang is the “big” spender (in the context of this race) with expenditures of $3,047.78. The problem is that his report is opaque. I think he maybe didn’t understand the form? As written, it looks like he’s paying himself and no one else which I’m pretty sure is not the case. Unless he’s making campaign signs in his garage, he’d be paying third party vendors who he does not list in his report. The donations and debts also don’t line up with the expenditures. On the income side, he has $400 in donations and $1,189.37 owed to himself (for $1,589.37) but $3,047.78 in spending. It’s the kind of thing that could result in audit findings!

 

  • Karen Springer has spent $2,156.66 on signs, campaign flyers, web design, and web hosting. I’m not sure if I neglected to copy a page or if there were no receipts or debts submitted. If it’s the latter, that would be an error. My presumption is that this is self-funded. If that’s the case, I think candidates are either supposed to list themselves as donating to their campaign or as their campaign being indebted to themselves individually. Also, you’ll see Sumy Designs as the web designer. Long-time readers of this blog will recognize that name from the bottom of my page – my wife is a web designer and also a supporter of Karen, Rachel, and George. (Members of the community will perhaps recognize the name as being splattered on marching band t-shirts and GLRSA soccer teams which Sumy Designs has also supported over the years.)

 

Station break/[Baseball announcer voice]: This blog post is brought to you by Sumy Designs. Sumy Designs, creators of great web sites since 2006. And now, back to our blog post.

  • Dacia Mumford has raised and spent $1,416.64. She lists her donors anonymously as 36 local residents who have contributed $40 or less. (Contributions of less than $100 need not be disclosed). Her sign expenditures (as well as those of Angie Janes) would be less than other candidates because they presumably would have already had signs on hand from their 2020 campaign efforts.

 

  • Angie Janes lists $1,352 in contributions and receipts: $733 in itemized receipts and $619 in un-itemized receipts; along with $733 in debts owed by the committee. The debts say “personal loan from candidate.” Given the specific number, I assume the $733 debt is the same thing as the contribution.The expenditures list $589 in itemized expenses (Angie and Dacia use the same sign vendor and printing company – AGE Graphics out of Little Hocking, Ohio and GotPrint out of Burbank, California) and $149 in un-itemized expenses, leaving $614 cash on hand and that $733 debt.

 

  • George Lyle lists $2,853 in donations and $2,318.48 in expenditures, leaving cash on hand in the amount of $535.27. He lists his small dollar donors (you’ll notice my wife as an in-kind donor of web design services and a $50 contributor) and larger donors alike. His big expenditure was signs, not having them on hand prior to the election, with that expense coming in at $1,647.80.

Given the nature of Indiana’s campaign finance reporting, I think that’s the last peak we’ll get into the candidates’ receipts and expenditures until after the election.

School Referendums, Real Estate Taxes, and Tax Caps

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Idea: Write increasingly obscure and dry posts on local government finance until readers abandon the blog altogether.

This one will probably be a snoozer. But in the course of school board elections, I’ve seen some people get things wrong about the interaction of real estate taxes, tax caps, and the school referendum rate. And, even as I write that, I want everyone to take this explanation with a grain of salt, because I might get things wrong. Here’s your big NOT LEGAL ADVICE disclaimer. I’m going to take West Lafayette as my point of reference, but a lot of this would be applicable anywhere.

Tax Caps

In most cases, Article 10, section 1 limits a taxpayer’s tax liability on residential property to 1% of the gross assessed value of the real estate. However property taxes approved by referendum are not subject to that tax cap. That means, for example, a residential property with an assessed value of $240,000 can’t have a tax bill of more than $2,400 for the year plus additional taxes approved by referendum.

Non-Referendum Property Taxes and Circuit Breakers

A resident in the West Lafayette school district is also in the City of West Lafayette, Wabash Township, Tippecanoe County, the West Lafayette Public Library District, and the Tippecanoe County Solid Waste Management District. Each of these districts has different rates. According to the tax statement I’m looking at for the 2022 tax bill on a property assessed just over $240,000, the taxing units rates are:

  • County – 0.4281
  • Township – 0.0028
  • School – 1.2725
  • City – 0.9120
  • Library – 0.1880
  • Special District – 0.0523 (I think this is the Solid Waste Management District)

All of that adds up to $2.8557 per $100 of assessed value. Now, it’s not as easy as ($240,000 / $100) * $2.8557 = $6,856.80. The $240,000 is your gross assessed value. You have to find the net assessed value to get your tax bill.

The State of Indiana takes a homestead deduction of $45,000 and a “supplemental standard” deduction of 35% (for homes under $600,000 which, in this case is $68,530) off the top of the AV to give homeowners a break. (Some taxpayers will get further deductions for various things, the most common of which would be a mortgage deduction.) In the case of our $240,000 home, those standard deductions give us a net assessed value of $126,470. Multiply that by our $2.8557 and we get $3,611.60. But we’re not to the final tax amount yet! Tippecanoe County has devoted a portion of its income tax to property tax reduction, lowering this particular bill by $314.36, so now we’re at $3,297.24. Compare that to the 1% tax cap of $2,400, and you get a “Circuit Breaker” credit of $897.24, reducing the tax bill to $2,400 (plus any referendum rates.) That “Circuit Breaker” gets allocated to the varying taxing units pro rata based on their tax rates, reducing the tax revenue they would otherwise expect to receive. So, that $897.24 “circuit breaker” credit gets allocated between the School, City, County, Library, etc.

At present, the debt service component of the school’s tax rate is $0.5375 (see below). An issue in the West Lafayette school board race has been the contention that the facilities improvement projects were too expensive. So, for kicks, let’s reduce that a dime to $0.4375 (lower than it’s been since before my college freshman started at Cumberland) and see what happens to our hypothetical tax bill in light of the tax caps and the circuit breaker credits.  Our combined $2.8557 now becomes $2.7557 multiplied times our net assessed value of $126,470 gives us $3,485.13 then reduced by the $314.36 (for the income tax reduction) which takes the bill down to $3,170.77. But, we’re still above the circuit breaker, so the taxpayer’s bill remains $2,400 (plus any referendum rates). The Circuit Breaker Credit has been reduced from $897.24 down to $770.77. What that means is that, because the School’s debt service rate has been reduced, the other taxing units collectively experience a smaller hit from the circuit breaker. The City, County, Library, Township, etc. will get slightly more money even though the taxpayer’s bill remains the same.

Keep in mind that I have been using $240,000 residence as my example. People with expensive homes (and therefore a higher 1% cap), landlords (2% cap), and owners of non-rental commercial properties (3% cap) are going to have a higher tax burden and are more likely to have cause for complaint.

Referendum Rates

As it turns out, West Side’s overall school property tax rate of $1.2725 *does* include a referendum rate. So, let’s look a little closer at the school’s $1.2725 rate. That itself consists of three components. First is the debt service rate which, as I mentioned in a previous post, has more or less stayed steady for that last dozen years at $0.5375 per $100 of assessed value (it got down as low as $0.4913 in 2013). Second is the operations rate which, as it turns out, is $0.365. And, third is the referendum rate of $0.370, most recently approved by the voters in 2017. Because it’s a referendum rate, that last $0.370 isn’t subject to the tax cap, so on our $240,000 home with a $126,470 net assessed value, that rate generates $467.94 in taxes. You add that to the 1% cap and end up with a tax bill of $2,867.94.

The school’s debt service rate can only be used to pay for long term debt obligations. In West Lafayette’s case, that means bonds issued for its buildings. It cannot be used for operations or personal services such as teacher’s salaries. The operations fund is a consolidation of some older funds such as the transportation fund, capital projects fund, bus replacement fund, and a couple of smaller items. It is mainly used for non-classroom expenditures that support school functions. That rate seems to be based on a combination of historical rates which increase based on something called the assessed value growth quotient, an explanation of which is beyond the scope of this particular post. The referendum rate is based on whatever the voters approved. It can be used for any lawful school expense. In the case of West Lafayette, it is not being used for debt service.

The question about how much this referendum money is going to the classroom or to non-classroom expenditures is more complicated for reasons having to do with legislation the State passed in 2019 regulating the Education Fund. The money in the Education Fund comes from the State via statewide sales taxes and is the primary means of paying for teachers. Prior to 2020, I think it was more evident that referendum money was going to funding classroom activities and extra-curriculars. However, the State threw up some road blocks when it comes to transferring more than 15% out of the Education Fund into a school’s Operations Fund. To meet the 85% target on the Education Fund, West Lafayette took some of the Education Fund money that used to go to the Operations Fund (supporting school functions) and left it in the Education Fund for classroom expenditures. It then swapped out some of the Referendum money that used to be used for classroom expenditures and shifted it into the operations fund.

And … now I’m pretty far afield from my original project.  But, hopefully that helps illuminate more than it obscures.

West Lafayette School Board: My Recommendations – Springer, Witt, and Lyle

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Three school board seats are up for election.

I have not been mysterious about who I support in the West Lafayette School Board race. If you live in the district and read this blog, there is a fantastic chance you already know. But I’ll go ahead and be clear that I would recommend folks vote for Karen Springer, Rachel Witt, and George Lyle. There are three seats at issue, and they are all “at large.” So, everyone in the District gets three votes. Karen and Rachel are both incumbents, running for re-election. Alan Karpick, the third incumbent who would otherwise be up for election has decided not to run again. George would be a good choice to fill his vacancy.

I have personal connections with Karen and Rachel. I count them as friends. But a lot of those personal connections started with the School Board. So, it’s not so much that I think they’ll do a good job on the board because they’re my friends. In a real sense, they became my friends because they were already doing a good job on the board. (With Rachel, there are other connections as well — our kids were in the marching band together. More on that in a bit.)

Aside from the personal connection, however, there remains the fact that West Lafayette has the best school district in the state. Let me repeat that: West Lafayette has the best school district in the state. As the man said, “dance with who brung ya.” That’d be Karen and Rachel. New blood and fresh eyes are a good thing, and from that perspective, I think George would be a good choice. He has young kids in the district, a quick mind, an even keel, and no agenda other than a general willingness and desire to do right by the community.

George Lyle

Let’s start with George. I don’t know him as well as I do Karen and Rachel. What I have seen has all been good. Professionally, he’s a lawyer and an works with Purdue’s IT security team. He is a father to young kids with a future at West Side. He is sharp and willing to work with others. He’s got a great sense of humor, a laid back demeanor, and seems able to get along with anyone. With George, I sense a guy who will seek to learn fast but recognizes what we have in West Lafayette and will proceed with caution in those areas where he is still learning. George would bring a fresh and different viewpoint to the board. As a white guy, I can’t talk much about race without getting it wrong, but representation does matter. There was so much discussion around diversity back during the 2020 election that it’s a little odd that George’s background and perspective hasn’t received more attention. As a friend put it, “he has a diverse educational and experiential background, cares for the community and for students, and I think he’d be an asset to the board.” On his website, George emphasizes that “every student should have the opportunity to see where their talents can take them, no matter what those talents might be.” That’s a valuable point of emphasis for a place like West Lafayette which has a reputation for being rough on students who don’t fit a particular mold.

Karen Springer

I know Karen quite a bit better. She has been on the board for a long time now, serving from 1996 – 2004 and 2006 to the present. I started getting to know her when I was briefly on the Board in 2015 and 2016. Karen has helped West Lafayette navigate a lot of ups and downs: the backlash to decisions about remodeling the junior-senior high school, the firing of Stella Batagiannis and her subsequent lawsuits against the school, the State’s takeover of school funding, the State’s subsequent slashing of public education funding in 2010 in the wake of the Great Recession, two school referendums, the rise of vouchers and charter schools, the pandemic, and so forth.  West Side’s present strength owes a great deal to Karen. I helped out with a policy review committee over the course of several years where we did a decennial review of all of the School Corporation’s policies and put them online. Karen’s institutional knowledge, consistent preparation, and attention to detail is remarkable. She is a pleasure to work with. She volunteers for the community in any number of ways: Global Fest, Food Finders, the Tippecanoe County Public Library, and Music Boosters, among other things. Finally, she received the 2022 Outstanding Boardsmanship Award from the Indiana School Board Association indicating an extraordinary level of respect on the state level. She is a real asset for the school and our community.

Rachel Witt

Of the candidates, I know Rachel best. We have kids of a similar age with similar interests, and our paths have crossed in any number of ways over the past decade.  With respect to her service as a school board member, I’ll observe that knowledge of state and federal education law, municipal finance, and all of the rest of the bureaucracy that goes into running a school is not something you are born with. Serving since 2014, Rachel has diligently built up that foundation to complement what I already regarded as her strength in terms of knowing the ins and outs of how the school looks to parents and students on the ground. She has brought several children up through the ranks of West Side with abilities, interests, and needs that — from what I can tell — have run the spectrum. In a community that’s chock-a-block with professors, it’s good to have Rachel’s perspective as a single mom who is the art programming coordinator at Westminster. My experience is that Rachel often sees issues and concerns for students and parents of which I am, frankly, oblivious (until she points them out.) That’s the type of synergy that complementary perspectives create. It’s not something you get by combining similar or antagonistic perspectives. A few weeks ago when I recommended “voting for the builders,” Rachel is one of the people I had in mind. This is true literally — she was a key driver in the design and construction of a 20 foot tall horse for the Sound of West Side’s State Fair marching competition. But it’s also true in the metaphorical sense — she is always contributing to the schools, helping with seemingly every play, involvement with marchathons, turning lockers doors into book spines, etc. etc.

The remaining candidates

As for the other candidates, I don’t see a need to go on at length or in public about my reservations. I’ve already mentioned my concern about Laurence Wang supporting charter schools and the Indiana General Assembly’s proposals that teachers post curriculum a full year in advance and restricting teacher’s ability to teach “divisive concepts.” From what I’ve heard at public forums, he also seems to be making more of a set of SBOA audit findings than the circumstances warrant. I think Mumford and Janes have overstated their claims about the school’s financial state, and while speaking about “transparency,” they have been coy about their use of a Facebook group, ostensibly a “community forum,” and related web page as campaign tools. The Facebook group, in particular, has been corrosive.

If your mind is made up or you are friends with someone I’m not recommending, go ahead and disregard this. But, if you’re still persuadable, I definitely think West Lafayette Schools will be well served if you vote for Springer, Witt, and Lyle. Also, tell your friends. This election is important.

West Lafayette School Board: About that Audit Report

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Is all of our money gone? No. No it’s not.

“Ok Doug, ” says the voice in my head, “you told me not to panic about the bonds used to finance school improvements. But what about that State Board of Accounts Audit? An audit is pretty bad, right? $7 million off the books?? Lack of internal controls??? School board members are just stuffing wads of bills into their pockets, right?!?!”

Fine, that last one is a complete straw man that I made up. But people are spooked. The short answer is that nobody likes audit findings and there were things that needed to be fixed, but there is no indication that there was any substantive harm to the school because of the issues that needed to be corrected.

The School was audited because every political subdivision is audited all the time.

So, why was the school audited in the first place? Because all political subdivisions are routinely required to be audited. I looked at the SBOA’s audit database and it looks like they issued 43 audit reports for various political subdivisions in the state over the course of two days in October. Point being that every unit of government is being audited by the State pretty much all the time.

$7 million of the total bond proceeds were put into a School construction account; the remaining bond proceeds were put into a Building Corporation construction account. All of the money was used for construction. The School construction account should have been reflected on the School financial statements rather than the Building Corporation financial statements.

What happened to that $7 million? Nothing. It was put in a construction account just like the rest of the bond money in 2017. For reasons I’ll explain in more depth later, $7 million was put in a school construction account and the remainder was put in a building corporation construction account. This was proper. However, the school had the mistaken belief that the $7 million school construction account should show up on the Building Corporation financial statement along with the reset of the bond money. So, disclosure here: I’m getting out in front of my skis a bit. I’m reading the school’s response to the audit report (included in the document linked above) and my own experience with municipal bond issues. I have not talked to anyone at the school about this, and I am not an accountant. Also, this requires some background, so bear with me.

Back in 1836 (not a typo, and yes I’m serious), Indiana adopted the Mammoth Improvement Act. The young State got in way over its head borrowing money for roads, canals, and railroads. Andrew Jackson’s fight with the Bank of the United States helped trigger the Panic of 1837 which wiped out a lot of the economy. Indiana got hit particularly hard. The Mammoth Improvement initiative fell apart, and the finances of Indiana were strained for a generation. The Constitution of 1851 restricted the ability of Indiana to take on debt. However, there was a need to take on debt to build capital assets, so by at least 1920 an artifice had arisen by which the political subdivision itself did not take on the debt. Rather, a municipal building corporation would be created to receive the money and guarantee payment to bond holders. The municipal corporation would own the improvements built with the bond money, and the unit of local government leases the improvements from the municipal corporation. The lease amount is enough to cover the bond payments. The lease payments are funded with real estate taxes. I have no idea if this was considered financial chicanery 100 years ago, but it is absolutely standard operating procedure in Indiana — codified and blessed by the Indiana General Assembly. When the bonds are paid off, the lease agreement concludes and the land and improvements are transferred to the unit of local government.

“Thanks for the history lesson, Poindexter. Do we have any information about the $7 million in our future?” I’m getting there.

So, West Lafayette wants to build a new school. The Building Corporation is going to own the improvements it constructs using the bond money, but until something else happens, the School owns the land underneath and existing improvements where Burtsfield is located. For reasons I can speculate on but don’t know (e.g. the Burtsfield gym was being incorporated into the new improvements?), West Lafayette is going to transfer this land to the Building Corporation so that the Building Corporation owns both the land and the improvements. So, the school gets the land appraised for $7,444,000, and when the $47 million in bond money comes in, $7.4 million of it goes into the name of the School. The rest is deposited in a Building Corporation construction account. I think both of the accounts were placed with Huntington Bank in escrow agreements that were probably identical, and the terms of both escrow accounts (at the demand of the bond issuer, I’m sure) both dictate that all of the money be used for nothing other than construction costs. Construction draws on both of these accounts were handled the same way except that, I presume, the School Board approved draws on the school construction account while the Building Corporation board members approved draws on the building corporation construction account. Ultimately, the question is, how should the $7 million be reflected on the various financial reports? State Board of Accounts said that the School got it wrong.

When responding to the State Board of Accounts audit finding, the School said that it believed that it was required to hold the $7 million in a separate account from other school funds to track it for federal tax purposes. (Municipal bonds get certain tax breaks which come with strings attached.) Because it was being held in a special account and could only be spent in the same way as other construction funds, the School mistakenly believed that these funds had to be reflected on the Building Corporation financial report and not reflected on the School’s financial reports. This caused problems with the School’s books, however, because draws on the School’s account were approved by the school board as part of the monthly Accounts Payable approval.  So, on the School’s end, you have payments approved, but the payments are coming from an account that is not, itself, listed on the School’s financial sheets. (Meanwhile, in a parallel process, the Building Corporation will have draws on its own $40 million construction account approved through its own claim approval processes. I’m guessing they had their own error – with the $7.4 million being drawn down but no corresponding claim being approved by the Building Corporation).

That’s a long way to go, but ultimately, the $7 million should have been reflected on the School’s account and not the Building Corporation account. You can say there are “two sets of books” and be technically accurate, but blame the Mammoth Improvement Act. The two sets of books are there for a reason and it’s not nefarious.

Aside from the construction account issue, the internal control finding had mostly to do with documenting training attendance.

“But you have to have internal controls, right Doug? People are going to rob the school blind without internal controls.”

I mean … yes. But, not all internal control problems are created equally.The State Board of Accounts describes controls as follows:

Control activities are the actions and tools established through policies and procedures that help to detect, prevent, or reduce the identified risks that interfere with the achievement of objectives. Detection activities are designed to identify unfavorable events in a timely manner whereas prevention activities are designed to deter the occurrence of an unfavorable event. Examples of these activities include reconciliations, authorizations, approval processes, performance reviews, and verification processes.

If you have the same person opening the envelopes, recording the deposits, writing the checks and balancing the books, sooner or later you’re going to have a bad time. But, in the case of the $7 million, the School was aware that it was approving claims being drawn on an account reflected on the Building Construction financial sheets. They just thought it was the right thing to do. So, in this case SBOA considered the error to be a problem with internal controls, but I’m not so sure. But I think it’s fair to call it a reporting error.

There was another “internal control” problem having to do with the School not retaining training records in 2019-2020 and not conducting the annual training due to COVID during 2020-2021. The State requires employees to take annual training on the school’s internal control standards. I think these days, that training consists primarily of going through a computer module every year. The School is required to submit a certification to the State that this training has happened and retain proof of the training. For the year 2019-2020, the School reports that during that year, the annual practice was for Central Office to meet with the school secretaries (who presumably handle whatever money goes through at the building level), go over the internal control and policies at the building level including cash management expectations. They have attendees sign a copy of the agenda at the meeting. In 2019-2020, the School apparently didn’t retain the signed sheets and, so, got dinged for the lack of paperwork by SBOA. In 2020-2021, COVID set in, and no such training took place. The school filed the form or checked a box in the State’s system or something saying that the training had happened, so the School got dinged again. Going forward, the School indicates that it is using training software that will track attendance.

[Edited to add: I had intended to add some links to several other SBOA audit reports that cite internal controls. Browsing around the other day, I know I found one for Purdue and think I recall seeing one for TSC. Point being that the concept of internal controls covers such a wide range of potential issues, it is not something uncommon to see. Again, you want to make them stronger. But, this report does not suggest that West Side has internal control problems that are anything like unique.]

There was a contract employee who had a contract indicating that he or she was only supposed to work eight days per month. The employee ended up working more days than that during several months. Finally, there were bookkeeping errors having to do with how certain software recorded transfers between accounts and from the School giving Form 9 (which excludes Clearing Funds) to the Auditors rather than giving the Auditor Form 13 (which includes Clearing Funds.) No, I am not familiar with those forms.

So, now I’ve written upward of 1,700 words that almost none of the voting public will read wading through the minutiae of the State Board of Accounts audit finding. That took time and effort, and the conclusion is – there is some stuff there that had to be fixed, but there’s no money missing, there were people minding the store, and anyone suggesting that the School lost millions of dollars due to poor internal controls is badly misinformed. But it’s so easy to erode trust by carelessly jamming together words like audit, millions, dollars, and internal controls while expressing grave concern. So, be careful out there!