Two bills being pitched by Indiana lawmakers to cover school funding may fall short due to a larger-than-expected gap this year.

Schools could be short changed by more than $22 million this year and up to $60 million next year, according to the state’s Legislative Services Agenda. The shortfall is larger than the $9 million gap that had been anticipated at the start of the year. The gap in funding comes as a result of Indiana budget officials underestimating the statewide school enrollment figure by about 6,000 students. The final enrollment counts should be completed this week ,according to the Indiana Department of Education.

Each budget cycle, Indiana schools, the Department of Education, and the Legislative Services Agency project the number of students attending public schools in the future.

William A Wirt HS in gary indiana
Indiana lawmakers are grappling with school funding issues this year.

Republican Senate Appropriations Committee chairman Ryan Mishler, R-Bremen, said the figure “seems to grow every week, which makes finding the money to fill the gap difficult.”

House and Senate versions of the school funding bills passed their respective chambers in the recently completed first half of the legislative session that would allow for an additional $25 million in school funding this year. The bills now reside in committees in the other chamber.

House Bill 1001 would allow for up to $25 million this year and another $50 million next year to be transferred from the state's tuition reserve fund to cover any gaps between funding based on projected enrollment and actual enrollment.

A Senate bill would permit up to $25 million each year from the same fund. The tuition reserve fund had nearly $350 million at the end of the past fiscal year.

If schools received no additional funding beyond what was the two-year state budget adopted in 2017, districts would lose an average of $21 per student this school year and $55 next year.

The lapse in funding comes when the state is looking to redefine its role in aiding struggling school districts.

House Bill 1315 applied to both the Muncie and Gary districts and establishes guidelines that could be used to determine future oversight of other struggling districts.

The state in a first-time action took full control of the Gary district and partial control of the Muncie district last year. Both are under the oversight of emergency managers. The state recently expanded its oversight of Muncie.

“If I were a member of an elected school board today, I’d be asking myself what’s my status?” said Rep. Edward Delaney, D-Indianapolis at the time the bill passed on Feb. 1. “If somehow we get into trouble, are we going to have the Indiana General Assembly take over our district? I’d be bothered about that.”

The bill moved to the Senate floor and a vote is expected March 6.

Both Muncie and Gary are suffering from a drop in student enrollment. Peggy Hinckley, who was appointed the emergency manager for the Gary Community School Corp. by the Distressed Unit Appeal Board in August, said this week that she intends to recommend that a high school be closed. She will also propose that the district implement a middle school for children in grades 6-8.

Hinckley said the district has some assets, including an art collection stored in Chicago and its closed buildings. The district is trying to reduce the approximately $8.5 million it owes to the IRS for a tax liability created when the school district failed to remit taxes it withheld from employee paychecks to the IRS on a quarterly basis. Hinckley said that the agency has been to Chicago to view the art collection.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.