External consultant warns Carmel Central faces multi‑year revenue shortfall under tax cap

Dr. Rick Timbs, a school finance consultant retained by the Carmel Central School District, told the Board of Education on Feb. 27 that the district faces a structural revenue problem driven by repeated levies below the state’s tax‑levy cap and the imminent end of federal COVID relief dollars.

“Those three paragraphs in your audits are telling you right now, you are in big trouble financially,” Timbs said, walking trustees through the tax‑cap calculation and a series of modeled scenarios. He presented an analysis showing that, by not capturing the full allowable levy in recent years, the district left what he estimated to be more than $1 million in one year and a cumulative multi‑million dollar shortfall across several years. He emphasized the compounding effect: money not collected in one year becomes a smaller base for future levy calculations, reducing long‑term revenue capacity.

Timbs explained the mechanics of the tax cap—starting with the prior year’s levy, applying a growth factor derived from the Office of Real Property Tax Services, adding certain exclusions and subtracting capital levies—and illustrated how small differences in a single year produce large cumulative shortfalls. “You will lose this money forever. You cannot get it back,” he said, urging trustees to show voters “what they’re going to get for what they’re going to pay.”

He also reviewed district reserves, debt service and state aid trends. Timbs warned that federal relief funds (CRRSA/ARPA) that bolstered recent fund balance are expiring and that expected increases in employer retirement system contributions (ERS) and health insurance will further pressure expenditures. He recommended several immediate steps: develop a prioritized, public list of programs that would be cut at each levy level; pursue a sustained public outreach campaign to build voter support for needed levy increases; explore budget triage that minimizes direct harm to students; and consider timing capital projects to take advantage of debt drop‑offs.

During Q&A trustees pressed Timbs on timing and alternatives; he said the district has limited time to right‑size its budget and that more work is required to translate scenarios into specific personnel and program choices. Timbs concluded by offering to answer follow‑up questions and remaining available to the district.

The presentation centered on Timbs’ professional analysis and projections; the Board did not take formal fiscal action at the meeting but asked administration to return with detailed scenarios and line‑item implications at a follow‑up session.

Next steps: administration will model specific cut scenarios and discuss bargaining‑unit outreach ahead of the March meeting where trustees expect to consider levy targets and refined options.