August 20, 2018

Gary Schools Emergency Manager Chips Away At Deficit

A yard sign to promote Gary Community School District - Eric Weddle/WFYI News

A yard sign to promote Gary Community School District

Eric Weddle/WFYI News

The state-appointed manager of the Gary Community School Corporation told state officials Monday the district faces less of a deficit than it did a year ago.

The annual operating deficit is  $15 million -- that’s $7 million less than the original deficit when state lawmakers approved the takeover. Eliminating the deficit by the end of 2019 remains the manager’s goal.

Yet the district remains in debt by $98 million, much of that coming from outstanding bonds and loans from banks and the state.

Since becoming the first emergency manager to run a public school district in Indiana, Peggy Hinckley closed a school and cut staff to reduce spending. She also created the Gary Middle School by reconfiguring grades at the district’s nine schools.

Read More: Can Gary Schools Be Saved By A State Takeover?

She hopes the middle school will attract new families to the district. Enrollment has dropped by nearly 40 percent since 2013 as families decide to attend districts in neighboring cities or area charter schools.

Hinckley wants enrollment to remain around 5,000 students in grades K-12 for the 2018-19 school year. So far, around 3,500 students have enrolled since classes began last week. Fewer students would cause the district’s deficit to grow.

Hinckley’s team is planning to ask voters to approve a property tax increase referendum in November 2019, according to a report released to the Distressed Unit Appeal Board, or DUAB, on Monday.

Holding the referendum then, the report says, would give the Gary Community School Corp. more time to promote positive changes at the district.

Also during Monday’s meeting, the board voted unanimously to approve two $100,000 performance incentives to Gary Schools Recovery, the company hired by the state to manage the district.

The $6.2 million state contract for the emergency manager includes an additional nearly $1.5 million in financial incentives for making financial and academic benchmarks.

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