-- State-appointed emergency managers would take control of financially
troubled school districts in Gary and Muncie under a bill advancing in the
Indiana Legislature, which creates a blueprint that could be used to take
over other distressed districts in the future.
with both districts have been well documented, though officials for Muncie
Community Schools joined lawmakers from the area to plead unsuccessfully for
a reprieve during a Monday hearing.
“There is consensus
in Muncie that we would request an opportunity to turn this ship around
ourselves,” said Democratic Sen. Tim Lanane of Anderson. “It’s much better
for the community if they are able to do this themselves. Given time, this
can be done.”
The House Ways and
Means committee was unmoved and voted 18-3 to advance the bill to the full
House for a vote.
experts say the two districts are just the tip of the iceberg. A handful
more districts are prime candidates in the coming years.
A perfect storm of
declining enrollments, decreased property values, voter-approved property
tax caps and legislative changes to school funding has cut into many
districts’ ability to stay afloat. In some cases, voters have rejected
referendums to increase property taxes, or the measures haven’t raised
enough money. In others, a history of fiscal mismanagement has turned a bad
“I have concerns
about a whole lot of other school corporations,” said House Ways and Means
committee Chairman Tim Brown, a Republican from Crawfordsville.
Under the measure,
an emergency manager would have the power to control and reduce spending,
sell property, renegotiate contracts, lay off staff and privatize services.
But the bill would also help underwater districts secure no-interest loans
and other state assistance.
Democrats, argue many districts’ financial troubles are rooted in tax and
fiscal policies pushed by Republicans over the past decade. For example, the
state’s per-pupil allotment follows the student to wherever they attend,
including charter and private voucher schools. And the voter-approved
property tax caps championed by former Republican Gov. Mitch Daniels
diminished schools’ ability to raise local revenues without going to the
control the Legislature said troubled districts need to do a better job
adjusting to a new reality, downsizing or consolidating.
Some factors are
beyond anyone’s control. The decline of manufacturing has led to a sharp
drop in property values, as tax-generating businesses and people have moved
production cratered in Gary, shedding jobs and residents by the thousands,
the schools took a hit. Gary Community School Corporation is now drowning in
debt and has had trouble paying its bills, though state audits have revealed
questionable spending and mismanagement.
“That vacancy rate
has plagued us over the last 20 years and has resulted in our inability to
collect property taxes at the rate that it has been collected in other parts
of the state,” Mayor Karen Freeman-Wilson testified during a February
hearing. “The school corporation has borne the brunt of that.”
Senate Bill 567 can
be found at