Brown treasurer outlines tax changes in forecast

James Carman, treasurer of Brown Local Schools, presented the district’s five-year forecast at the Feb. 17 school board meeting and said the district should expect significant changes due to new real estate tax reforms.

Carman reviewed property valuation changes in Carroll County from 2016 to 2025, noting a 38.6% increase from 2024 to 2025 — about a $90 million jump. He said that increase exceeded the growth seen in reappraisal years 2019 and 2022, which had increases of 18.3% and 19.4%, respectively. Because the school fiscal year runs from July through June, Carman said the full impact of the most recent valuation will not be reflected in district finances until 2027.

Carman said that, without the new legislation, the valuation increase would have generated about $1.6 million in additional property tax revenue and state reimbursements. With House Bills 129, 186, 335 and 96, he said those increases are projected to total $209,128.

“We can’t tax people out of their homes. That’s not appropriate,” Carman said. “But [the state] didn’t do it as part of a bigger picture.”

Carman said House Bill 186 is central to the discussion because it introduces an Inflation Cap Credit intended to prevent school property tax funding from growing faster than inflation. He said the bill will affect Brown Local differently because of its interaction with House Bill 129. Beginning in 2030, Carman said the district will no longer be eligible for the Inflation Cap Credit after the 2028-29 reappraisals.

Carman said state funding will not make up for reduced local revenue because the State Share Index — the percentage of education funding the state provides per student — has not been adjusted. Under the index, districts in counties with higher property values generally receive a smaller state share because they can raise more through local property taxes.

Because of the 38.6% increase in valuation, Carman said Brown Local is projected to receive about 17 cents for every dollar the state allocates to the district, down from 28 cents projected for 2026. The balance must come from local taxes, which Carman said are reduced under the new legislation.

Carman said the district is not allowed to fall below a minimum level of state aid. Beginning in 2027, he said Brown Local will receive Formula Transition Supplement funding to meet that threshold.

He also discussed how the state guarantee affects the district’s participation in the free lunch program. In the past, Carman said the district received more in food service funding than it spent, leaving additional money for other areas. Under the guarantee, he said the district will receive the same state amount whether or not it participates, meaning the program will not have the same financial benefit.

“I did build into the forecast that we keep free lunch going, but we have to keep subsidizing it,” Carman said. “It’s just not getting the same financial impact it did before.”

Carman recommended continuing to offer free lunches for at least another year, citing the board’s community focus and the fact that state funding projections may change.