The financial situation in the Gary Community School District has been dire. It is racking up debt and struggling to meet basic financial responsibilities, like payroll. The district currently has $100 million in debt and an operating deficit of $8.6 million.
A bipartisan bill in the legislature this session aims to improve the situation by creating a new position in the district. Sen. Eddie Melton (D-Merrillville) co-authored the bill with Sen. Luke Kenley (R-Noblesville).
Melton says there are four reasons Gary Schools are in a tough spot. First, Gary’s population is declining. This means fewer students, and fewer students means less state money.
In the 2010-2011 school year, almost 10,000 students enrolled. This year, 5,823 student enrolled -almost half of those students are gone.
A second reason the district is struggling financially, and this is a problem school districts all over the state are struggling with: the property tax caps that went into place in 2008. Higher property values meant more funding for schools.
The third challenge is school choice. More students are leaving traditional public schools to attend charter and private schools in the area. This school year, about 5,000 students enrolled at charter schools in Gary.
There are also 590 students living within the district boundaries using private school vouchers.
While those three factors contribute to the district’s financial trouble, Melton says there is a fourth factor the district can control. The last contributor, he says, is a mismanagement of funds, and this is what his bill addresses.
“Just day to day fiscal management processes, and checks and balances,” Melton says.
The bill creates a new position, an emergency manager, that would take over the fiscal decisions for the district. The emergency manager will work with the school district and a fiscal management board (a board of financial experts appointed by school, state and local officials).
Melton says this manager will also work with city leaders, like the mayor, and with state officials.
“We have to look at this as more of a collaborative approach,” Melton says. “We can’t sit back and watch this process happen. Everyone has to be heavily engaged and make sure this is successful.”
Currently, the Department of Education assigned a financial specialist to work with the school district, but this person serves as a consultant. The emergency manager would be able to make financial decisions on their own, not just consult.
The bill would also dictate the district hires a Chief Financial Officer, which they are currently without.
The bill passed out of the Senate unanimously, and is now being heard in the House.