State takeover of MCS advances

INDIANAPOLIS — The chairman of the House Ways and Means Committee on Monday set in motion legislation for a state takeover of finances and academics at Muncie Community Schools.

Rep. Tim Brown, R-Crawfordsville, who chairs the committee, compared financially unstable MCS to the cash-strapped Gary Community Schools.

He pushed through amendment #21 to Senate Bill 567, which designates the Gary school district as "distressed," to include Muncie, saying "I added Muncie because of State Board of Accounts findings."

Muncie School Board members and legislators representing Muncie were not permitted to testify until after the committee voted 17-5 to approve the amendment.

"There are a lot of school corporations that concern me greatly," Brown said at a committee hearing. "These include Clinton Central and Wabash County, which has a $3.5 million unfunded liability self-insurance account, so if a person gets sick in that corporation, the question is, is the money in that account to pay for the illness?"

But Muncie and Gary "concern me the most, because by far and away their cash balance according to the State Board of Accounts …  Gary School Corporation has a deficit of all funds of $19,968,828 and 60 cents, and Muncie school corporation has a negative deficit cash fund of all their funds of $18,686,859 and 72 cents," Brown said. "By far and away these two corporations exceed the threshold that I feel uncomfortable with in continuing such a negative deficit fund balance. And that's why I included Muncie school corporation."

After the amendment was approved, Brown allowed MCS board President Debbie Feick, Superintendent Steven Baule, state Sen. Tim Lanane (D-Anderson), state Rep. Sue Errington (D-Muncie) and state Rep. Melanie Wright (D-Yorktown) to testify against the amendment. Following their testimony, the committee voted 19-3 to approve the amended bill. It will be sent to the House floor for action on Tuesday or Wednesday.

Lanane, who represents Muncie, thanked Brown for his concern but said, "I believe I can say fairly that there is a consensus in Muncie that we would request an opportunity to turn this ship around ourselves." To outsiders, including potential businesses and residents, it will look a lot better if the community solves the problem itself rather than having the state take over, he said.

"Wonderful people" and "community-minded organizations" like the Muncie-Delaware Chamber of Commerce, Ball State University, Meridian Health Services and local foundations, plus "a plethora of others," are willing to help solve MCS's problems, Lanane added.

Minority members of the committee criticized the amendment. To Rep. Gregory Porter (D-Indianapolis), it seems like the Legislature "has become a quasi-board of education" in the past six to eight years. Muncie is different than Gary because Gary asked for help, he said, adding, "Now we're going to say, 'Muncie thou shall … '"

Rep. Terry Goodin (D-Crothersville) accused the GOP-controlled committee of "meddling in their business," speaking of MCS. And Sheila Klinker (D-Lafayette) criticized Brown for not allowing testimony from the Muncie contingent before voting.

Pat Kennedy, president of Muncie Teachers Association, couldn't attend the hearing. But she issued a statement to The Star Press: "The inclusion of Muncie schools in this bill originally written for Gary schools seems premature, particularly in light of the fact finder's report released late Friday night. Gary has long-running financial and academic issues to solve. Muncie’s current  financial situation is solvable with a total community effort.

"There are no Muncie schools in academic trouble at this time. The problems plaguing the two school systems are not comparable. Although at the outset the bill may look inviting as a 'cure'  to have the state insert control by putting 'outsiders' in charge of MCS, I believe the consequences of the bill would have long-term negative consequences for the entire community.

"…  Now that the fact finding decision has been released, it would be prudent and responsible for the state to allow the community to come together collaboratively to relieve the accumulated debt. It is possible to reduce the debt load in Muncie without destroying the school system or the community. It will take some time. The school board in Muncie and the community should be given the opportunity to implement changes that make sense for this community."

If the bill becomes law, a state-appointed emergency manager would be granted "full responsibility and authority related to the financial and academic matters of the school corporation." The emergency manager could act without the approval of the school board and without the approval of a new, four-member fiscal management board named by the mayor, the school board, the superintendent of public instruction and the state board of education. A member of the school board would not be allowed to serve on the fiscal management board.

The school board would not be allowed to meet more than once a month. The school superintendent would work with and serve as a resource to the emergency manager, who would hire a chief financial officer and a chief academic officer. The emergency manager would adopt the school district's annual budget, a "significant part" of which must be dedicated to eliminating outstanding financial obligations.

The emergency manager's other duties would include conducting audits and developing a financial plan to achieve the stability of the school corporation.

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Contact Seth Slabaugh at (765) 213-5834.