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What You Need To Know About Muncie Schools’ Financial Troubles

Muncie Central. (Kyle Stokes/StateImpact Indiana)

Muncie Central. (Kyle Stokes/StateImpact Indiana)

As Muncie Community Schools battles a $15 million budget deficit, school leaders could turn to school closures, emergency loans or forgoing building repairs to help the ailing district.

The news of the district’s financial troubles comes weeks after the districts’ top financial official resigned.

As Fox59 reports:

Muncie Community Schools CFO Bruce Perry resigned Tuesday just two months after he was hired. The announcement came just days after he announced more than $9 million budgeted for building repairs is not actually in the bank.

“It sort of feels like the Muncie financial crisis is like a game of hot potato,” parent Josh Holowell said.

The central Indiana school district of about 5,700 students has seen enrollment drop dramatically in the past five years. Since 2012, district enrollment has gone down by more than 1,000 students.

Far fewer students in the district means far less school funding from the state reaching the district. In Indiana, districts are funded based on per-pupil headcounts taken twice a year. Muncie students carry about $5,000 of state funds to the district with them.

And the change in enrollment has led to a number of factors.

1. There’s a big deficit.

It’s $15 million big – almost half of what the school district receives in state funding for an entire year. So now, the district is hoping to get a $5 million loan from the Distressed Unit Appeals Board.

2. Money for repairs… is gone.

Due to bad accounting, the district diverted funds that were meant for repairs, according to Fox59.

The funds were acquired through a bond in 2014 and meant specifically for repairs at several schools. District leaders say the money was used to cover cash flow problems over the years.

The issues at some aging buildings became clear last year when East Washington Academy was forced to temporarily close because of a broken heater. Classroom temperatures were down to 62 degrees. The heater was eventually fixed with help from the city.

Officials say the deficit could lead to cuts in teacher salaries and benefits.

3. Schools could close.

Consolidating some schools could be in the district’s future. Building closures are likely according to the district superintendent, as WISHTV8 reports.

According to the superintendent, building closures are likely and Northside Middle School could be first.

Nothing has been finalized yet, but district leaders say if closures happen, the school could sit empty or even be torn down.

Northside Middle School was built in 1969 and previously served as the district’s high school. Right now about 640 students attend Northside. That is only about 60 percent of the building’s capacity.

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