What lawmakers said about MCS finances

MUNCIE, Ind. — The Indiana House voted 77-19 on Thursday for a bill that places deficit-ridden Gary and Muncie schools under the control of a state-appointed emergency manager.

The legislation next goes to a four-member House-Senate conference committee that will try to resolve differences between the House and Senate versions of the bill.

Highlights of Thursday's debate from the House floor:

• Rep. Tim Brown, R-Crawfordsville, chairman of the House Ways and Means Committee, who estimated Muncie's budget deficit at $18.7 million:

" … it's also reported in the Muncie Star Press that they have a ($10.7 million) capital bond they got in 2014, a capital-project-fund bond, that they used for operations … it's also allegedly reported that in December 2016, in a tax warrant they had, that they wrote a check on Dec. 29, put it in the U.S.Postal Service snail mail while they were awaiting their electronic transfer of money into their account to cover the check. Kiting.

"They have delayed maintenance of buildings. There have been two temporary outages of heating this winter where Muncie had to actually close down for the day. They have vendors … allegedly not being paid on time. They only get paid if they come to the business office and make a complaint …  They have potential payroll problems this summer … They were making plans to come … to ask for state money going forward."

• Rep. Scott Pelath, D-Michigan City:

"We have to admit that the reason a lot of our school corporations are in financial difficulty is because of policies we made here in this very chamber … It's not just Gary; it's not just Muncie. There are school districts throughout Indiana that have been struggling to keep up with these wholesale changes in education … The best thing we can do for them is correct some of our school policies, correct some of our school funding mechanisms. Stop with the wholesale changes in policy and regulations! Let these school districts adapt and not have new bills every single session that they have to catch up to."

• Rep. Gregory Porter, D-Indianapolis:

"I'd say this is the tip of the iceberg … We all know there are other school corporations that are going to be in the same situation … Even Carmel, the school that's one of the fastest-growing school corporations … right now is asking for a referendum to generate $14.2 million by next semester … They say if they don't get it that they are going to have to lay off 260 teachers."

• Rep. Jim Lucas, R-Seymour:

"There's an old saying going around if you've got a million dollars in debt you have a problem. If you've got $18 million in debt your banker has a problem. They (Gary and Muncie) either got that much debt in one year, which is a horrible sign that the state needs to come in and do something, or they got that much in debt over a period of time, which shows a consistency of making bad decisions, which means the state needs to come in and do something."

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•  Ed Delaney, D-Indianapolis:

"They may have made mistakes in Muncie or Gary, but the mistakes that occur from now on are going to be on our shoulders … Where is the upside? Where is the hope? We don't have any provisions in here to give them grants or debt relief. We can loan them money, which is their problem, so that's not going to solve their problem. We have no provision allowing them to go bankrupt, so I project that at least in the case of Gary and potentially in the case of Muncie, we will be back here in a year or two talking about the fact that we haven't been able to solve the problem … Their income is fixed by property taxes and fixed by what we send them per capita … Their debts are locked in and they can't go bankrupt, so I don't know where this leads."

•  Rep. Vernon Smith, D-Gary:

" … we are asking for help as a child of the state, to ask big daddy, 'Help us, help us.' … you ask for bread and you are given a scorpion. That's written somewhere. I don't believe there is a desire to help us but more to control us … I think there are people waiting on Gary to go down in flames."

• Rep. Todd Huston, R-Fishers:

"Help isn't a blank check."

Rep. Tim Brown again, citing a study published by Ball State University economist Michael Hicks:

"Gary has the highest per student dollars in the state of Indiana: $7,866 per student. The highest in the state. So the continued financial problems are not a revenue issue on a per-student basis. They are highly funded, and Muncie is the highest-funded in East Central Indiana. Rather, it's an issue of failing to align facilities and staff costs to the … observed 50-year trend (of enrollment decline). That's what we are trying to do, correct that and align it to the trend and to the revenues we have available. Revenues don't grow on trees."

Contact Seth Slabaugh at (765) 213-5834.