CHICAGO — The Gary school district is warning that Indiana’s refusal to allow the district to levy a new tax for debt service payments will lead to teacher layoffs and other classroom cuts.

The district, officially called the Gary Community Schools Corp., appealed to the Indiana tax court over the recent decision by the state’s Department of Local Government Finance denying the school’s request for a new property tax levy to generate roughly $3 million a year to cover debt service payments for a 2004 bond issue.

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