EDITORIAL: Intervention beats government bankruptcy

Indiana state Sen. Ed Charbonneau's legislation to allow local governments, including school districts, to seek emergency state assistance with making ends meet should be approved.

Charbonneau filed similar legislation last year. This year, it would apply to school districts as well.

Gary gained fame, or perhaps notoriety, for being the only city to receive help from the Distressed Unit Appeals Board when that agency was created. That move prompted the start of painful cuts necessary to bring down the cost of government in Gary.

Charbonneau, sponsor of Senate Bill 355, said schools are just as likely as other units of local government to need an emergency manager to be appointed to make tough decisions necessary to make local government live within its means.

"The taxpayers of Indiana are all best served by allowing someone to come in there and get things fixed," Charbonneau said.

Not everyone agrees with this idea. Some would say using emergency intervention overrules the decision voters made in electing officials to make those decisions.

But the results could be disastrous if those elected officials fail to make the right decisions.

The specter of a municipal bankruptcy should scare not just the residents of that community but also others throughout the state.

A municipal or school district bankruptcy could damage the credit ratings of other units of local government in Indiana, affecting the cost of borrowing money for new schools, city halls or even making payroll until property taxes arrive.

Charbonneau's SB 355 is a reasonable alternative.