Indiana Statehouse

Inside the Indiana House of Representatives chamber.

Doug Ross, The Times

INDIANAPOLIS — The Indiana House voted 77-19 Thursday to transfer financial and academic control of the Gary Community School Corp. from the elected trustees to a state-appointed emergency manager.

State Rep. Tim Brown, R-Crawfordsville, explained that the extraordinary remedy in Senate Bill 567, which also applies to Muncie Community Schools, is needed to address Gary's multimillion dollar annual operating deficit and more than $100 million debt burden.

"Gary has the highest per-student dollars in the state of Indiana: $7,866," Brown said. "So the continued financial problems are not a revenue issue ... rather it's an issue of failing to align facilities and staff costs to the observed 50-year trend."

State Rep. Vernon Smith, D-Gary, strongly disagreed with that assessment.

He claimed recent policies enacted by the General Assembly, including property tax caps, expanded charter school options and changes in the school funding formula, have taken from Gary schools the resources needed to provide a comprehensive education.

Smith argued to no avail that Gary schools need more money — not a state takeover.

"You ask for bread and you're given a scorpion," Smith said. "I don't believe, from the bottom of my heart, that the desire is really to help us, but more to control us."

Under the plan, the emergency manager would be empowered to act unilaterally to reduce district expenses and alter its academic program with an overriding goal of achieving a balanced budget and paying off debt.

A chief financial officer and a chief academic officer selected by the emergency manager, along with the district's superintendent, would help decide what cuts to make.

In addition, a four-person fiscal management board, consisting of one member each appointed by the school board, mayor, state superintendent of public instruction and state board of education, also could weigh in on the manager's decisions in a strictly advisory capacity.

The measure specifies that only the state's Distressed Unit Appeals Board would have the authority to override a decision made by the emergency manager.

The legislation is likely to go next week to a conference committee for lawmakers to decide whether to limit the state takeover to financial matters, as the Senate preferred, or to also include academics, as the House-approved measure does.

"I personally don't believe the academic part of the bill should be included," said state Sen. Eddie Melton, D-Merrillville, a sponsor. "I think how we had it originally, in terms of the finance aspect, is most needed."

Any compromise proposal must be re-approved by both chambers before the end of the month to advance to the governor for his signature or veto.

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Dan is Statehouse Bureau Chief for The Times. Since 2009, he's reported on Indiana government and politics — and how both impact the Region — from the state capital in Indianapolis. He originally is from Orland Park, Ill.