A bill that is on its way to Indiana Gov. Mitch Daniels would allow school
corporations struggling with state funding cuts to transfer money from their
property tax revenues, but the amount of the fund transfers would be tied to
limits on employee raises.
The bill, H.B. 1367, would allow schools to transfer up to 10 percent of
funds from their Capital Projects Fund for school operating expenses if they
do not give employees a raise for the 2010-11 school year. Schools could
transfer up to 5 percent if employee raises are granted.
Duneland Superintendent Dirk Baer said it’s his understanding that the bill
refers to all school corporation employees, including teachers, and that
school corporations that would want to transfer more than 5 percent from
their CPF would essentially have to freeze teacher contracts if they include
But, although some clarification on the bill is needed, Baer also said the
bill language suggests that school corporations would also be able to
transfer money from other school funds. If so, Duneland would likely attempt
to transfer funds from its transportation fund.
The bill states that the fund transfers could not be used toward the
incremental pay increases for teachers.
Baer said it’s his understanding that the annual incremental pay hikes are
not considered a general wage increase, and would not be affected by the
restrictions on how much money could be transferred from the CPF.
Baer had mixed reactions to the bill. “I’m glad it gives us some
flexibility,” he said, citing the ability for schools to offset state losses
for their general funds. Duneland this year is losing about $1.6 million in
state funding that it expected to receive.
On the other hand, Baer said that the CPF is needed for various building
projects, but that it appears to be a “catch all” fund that keeps being
relied upon for other school needs. And now that school general funds have
been removed from property taxes and now paid for by state revenues, the CPF
is now the largest school fund that comes from local property taxes for many
school corporations, Baer noted.
In a statement, State Rep. Ed Soliday, R-Valparaiso, lauded the bill for
giving school corporations much-needed flexibility as they deal with state
“Our schools needed to be given the tools to help deal with the result of
declining state revenues,” Soliday said. “I felt that allowing school
corporations to make decisions at a local level was the best avenue to help
alleviate the effects of the cuts. We were able to reach a compromise that
ensures students and teachers alike will benefit. It certainly is not
perfect, but considering all factors it was the best outcome achievable.”
The bill passed the House 97-0. The bill also passed the Senate, 50-0.
The bill now advances to the governor’s desk for final approval.