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School leaders in three Lake County communities are asking voters to dig a little deeper into their pockets to pay more money to support the school districts.

The School Town of Munster, the School City of East Chicago and the Lake Station Community Schools all will pose a question on the ballot in special referendum votes May 2.

Since 2008, the operating budget for Indiana schools is no longer funded by property taxes but instead is funded by a portion of state sales taxes. If schools want to raise more money, they must go to voters and ask them to pay more in property taxes.

Each of the school districts is telling voters that if the referendum does not pass, there will be deep cuts including teachers and programs. In East Chicago and Lake Station, school leaders also have said they may have to close an elementary school.

School Town of Munster

It's no secret Munster schools are having financial problems. The school district had an $8 million deficit, but Superintendent Jeff Hendrix said under the new School Board and administration leadership since 2014, the school corporation’s debt has been reduced by more than $3.5 million through cost reductions, debt refinancing and energy savings projects.

Hendrix said the additional tax dollars from the general fund referendum approved in 2013 has supported the salaries of 38 teachers since then.

"Without those referendum dollars, our schools would have eliminated programs and possibly most of those 38 positions," he said. "The two new referenda, if passed, will replace the 2013 operating referendum."

Munster is asking voters to approve a general fund referendum to support the operating budget, and a construction referendum to renovate buildings.

Hendrix said the new operating referendum would increase the current 2013 operating referendum of 19 cents per $100 of assessed valuation, to 42 cents per $100 of assessed valuation. This would raise $6.9 million for seven years to support student programs, retain and attract quality teachers/staff and establish reasonable fund balances.

Munster is asking voters for an additional $48 million construction referendum to repair and renovate all the school buildings. That requires property owners to pay an additional 43 cents per $100 of assessed valuation to fund those projects.

The superintendent said if the referendums do not pass, the district will have to make "tough decisions" in May about how to further reduce expenditures by $1 million to $1.5 million a year for the next three years.

He said those could include reducing or eliminating extracurricular offerings (athletic and nonathletic), continuing the salary freeze, reducing the administrative staff, increasing class sizes, in some cases to 40 students in a class, losing high quality teachers and staff and reducing elective courses.

SBOA Munster schools investigation

Munster residents have asked school leaders during community meetings why they should pay additional tax dollars when two former administrators have not repaid the corporation regarding an overpayment in compensation. 

Almost a year ago, the Indiana State Board of Accounts released a special investigation of two previous school superintendents — William Pfister and Richard Sopko. The report said the two were compensated more than $800,000 over what they were entitled to.

The audit asked Pfister to reimburse the district a total of $463,922, and Sopko $377,475 for overpayments to their annuity, salary and stipend, and other items.

The cost of the audit was $10,053, which the SBOA asked the two former administrators also to pay for. The report was forwarded to the Lake County prosecutor's office and the Indiana state attorney general's office. Attempts to reach Pfister and Sopko on Saturday were unsuccessful.

Hendrix said Tuesday the School Board has had no further contact with the Indiana state attorney general’s office, Lake County prosecutor or any other entity on that situation.

He said Munster School Board President Ron Ostojic has issued the following statement addressing the public’s concerns at every community meeting about the two former administrators:

“Two and a half years ago Melissa Higgason and Dr. Hendrix came on board at Munster. I came on board two years ago in January of 2015. They noticed and brought to my attention inconsistencies and irregularities in the spending within the district by past administrators. When the entire board became aware of what appeared to be inconsistent and irregular spending habits, we determined what our obligation and duties were at that time. Pursuant to I.C. 5-11-1-27, we self-reported these inconsistencies to the Indiana State Board of Accounts, who audits all state spending of tax dollars.

"The State Board of Accounts had a duty to investigate and to make a report. Once their findings were turned over to the Indiana State Attorney General, who begins his own investigation along with other law enforcement agencies, they are not required to keep us updated or to report to us on the status of their investigations. This corporation has fully cooperated in those investigations.”

A spokeswoman in the Lake County prosecutor's office said no charges have been filed.

Corey Elliot, spokesman in the Indiana attorney general's office, issued an email Thursday saying,  "We have been, and continue to, diligently pursue this file through all available options to the office."

School City of East Chicago

The School City of East Chicago is asking taxpayers to pay an additional 30 cents per $100 of assessed valuation to raise nearly $41 million over seven years.

East Chicago Superintendent Paige McNulty said the average homeowner with a home valued at $80,000 would pay an estimated $4 per month, or $50 per year, more in taxes.

School leaders say they've taken many steps to maintain a balanced budget, but the issue regarding lead in the West Calumet area created some unexpected problems this school year.

McNulty closed Carrie Gosch Elementary School a week before school was scheduled to start in August as a result of the lead problems in the West Calumet Housing Complex. Those students were moved to the former West Side Middle School, which was renamed the new Carrie Gosch.

Because of the lead problems, the district lost about 300 students.

McNulty said she hopes a measure to hold harmless the school district will be approved in the Legislature. That means the district would receive state funding as though Carrie Gosch were operating at full enrollment.

The hold harmless for School City of East Chicago is in the Senate version of House Bill 1001, the two-year state budget. It would use the district's 2015-16 student count for 2016-17 (this year) and 2017-18.

McNulty was in Indianapolis again April 10 meeting with legislators about a $2.8 million disaster relief loan from the state education department.

"This is a one time-only request. I've stressed to legislators that we've been financially solvent, and we've been paying our bills on time," she said by cellphone.

She said the district is doing everything it can to help itself financially, and the referendum is in full swing.

"We've been active. We've been knocking on doors and talking to homeowners. We've met with business owners. I believe we have a positive outlook for the referendum," she said.

"We're doing this so that we can continue to provide positive programming for our students. We've bought new curriculum for our students in the last 18 months. We've bought all new math, new reading and new special education curriculum. We've started an after-school sports program at the elementary and middle schools and bought our students new uniforms," McNulty said. 

East Chicago School Board member Joel Rodriguez said he's seen some division in the community, but he thinks it's because people don't understand the components of a referendum.  

"People are afraid of an increase," he said. "I've talked to more than 300 families myself, and I'm explaining to them and helping them to understand what it means. What we're doing is for the kids. We've been making sure that accountability is met."

The superintendent also continues to market the old Carrie Gosch school building at 455 E. 148th St. in hopes of selling it. She said the U.S. Environmental Protection Agency has leased the first floor.

A couple of community organizations, including the Northwest Indiana Information Sharing and Security Alliance (NIISSA), a public-private partnership, is lobbying the General Assembly and East Chicago school officials to take over the Carrie Gosch building to convert it to a crime intelligence and public safety communications center.

Lake Station Community Schools

The Lake Station Community Schools is asking voters to support a tax increase of 54 cents per $100 of assessed valuation to raise a little more than $800,000 per year for seven years, or about $5.6 million.

For a home with an average value of $80,000, the homeowner with all of the exemptions will pay about $9 more per month, or $108 per year.

Lake Station Superintendent Tom Cripliver said they have been meeting with several community groups including the chamber of commerce, the Lions Club, the precinct committee members and all of the parent-teacher organizations.

He said he also has hosted a town hall-style meeting with the community to respond to questions.

"People are asking good questions, and we're getting good support," Cripliver said.

"I'm very hopeful the referendum will pass because we desperately need it to pass. If it doesn't pass, we may have to close an elementary school building, and the layoffs will be much deeper. We could lose our bus transportation in January of 2020. We'd also have to look at reducing extracurricular activities, clubs, organizations, the sports program, the nursing and cafeteria staff."

Cripliver said referendums are becoming more common across the state. "Schools have to come up with other ways to generate funding. You have to go to your local voters and ask for extra funding because the state simply is not adequately funding schools," he said.

Lake, Porter and LaPorte county referendums

Source: Center for Evaluation and Education Policy at Indiana University at Bloomington

Date of Referendum May/Nov Type of Referendum School Corp. Locale School Corporation Corp. # City* County* State Maximum Tax Rate Increase per $100 Assessed Valuation Maximum Total Amount** Outcome Percent For Percent Against Margin For-Against Notes
6/16/2009 Construction Suburb Lake Central School Corporation 4615 St. John Lake IN $0.1230 $95,000,000.00 Failed 41.4% 58.6% -17.2%
5/3/2011 May General Fund Suburb Crown Point Community School Corporation 4660 Crown Point Lake IN $0.2100 N/A Passed 60.0% 40.0% 20.0%
11/8/2011 Nov Construction Suburb Lake Central School Corporation 4615 St. John Lake IN $0.4838 $160,000,000.00 Passed 55.0% 45.0% 10.0%
5/7/2013 May General Fund Suburb School Town of Munster 4740 Munster Lake IN $0.1990 N/A Passed 65.0% 35.0% 30.0%
5/5/2015 May General Fund City Gary Community School Corporation 4690 Gary Lake IN $0.4100 N/A Failed 44.5% 55.5% -11.0% Pass/Fail percentages updated per:
5/5/2015 May General Fund Suburb Hanover Community School Corporation 4580 Cedar Lake Lake IN $0.2900 N/A Passed 53.5% 46.5% 7.1% Pass/Fail percentages updated per:
5/5/2015 May General Fund Suburb River Forest Community School Corporation 4590 Hobart Lake IN $0.4200 N/A Passed 68.9% 31.1% 37.7% Pass/Fail percentages updated per:
11/3/2015 Nov General Fund Suburb Lake Station Community Schools 4680 Lake Station Lake IN $0.6100 N/A Failed 27.9% 72.1% -44.2%
11/8/2016 Nov General Fund City Gary Community School Corporation 4690 Gary Lake IN $0.4750 N/A Failed 49.1% 50.9% -1.8%
5/19/2009 Construction City Michigan City Area Schools 4925 Michigan City LaPorte IN $0.1320 $39,500,000.00 Failed 32.2% 67.8% -35.6%
11/5/2013 Nov General Fund City Michigan City Area Schools 4925 Michigan City LaPorte IN $0.1700 N/A Failed 43.0% 57.0% -14.0%
5/3/2016 May Construction Rural New Prairie United School Corporation 4805 New Carlisle LaPorte IN $0.6155 $42,000,000.00 Passed 54.5% 45.5% 9.0%
5/19/2009 Construction Rural Porter Township School Corporation 6520 Valparaiso Porter IN $0.6102 $34,850,000.00 Failed 25.0% 74.4% -49.4%
5/8/2012 May General Fund Suburb Duneland School Corporation 6470 Chesterton Porter IN $0.2200 N/A Passed 51.0% 49.0% 2.0%
5/7/2013 May General Fund Town M.S.D. Boone Township 6460 Hebron Porter IN $0.2300 N/A Failed 49.8% 50.2% -0.4%
5/7/2013 May General Fund Rural Union Township School Corporation 6530 Valparaiso Porter IN $0.2200 N/A Passed 58.2% 41.8% 16.4%
5/6/2014 May General Fund Town M.S.D. Boone Township 6460 Hebron Porter IN $0.2100 N/A Passed 50.7% 49.3% 1.3%
5/5/2015 May Construction Suburb Valparaiso Community Schools 6560 Valparaiso Porter IN $0.6482 $150,000,000.00 Passed 63.0% 37.0% 26.0%
5/5/2015 May General Fund Suburb Valparaiso Community Schools 6560 Valparaiso Porter IN $0.2042 N/A Passed 64.0% 36.0% 28.0%

Southlake County Reporter

Carmen is an award-winning journalist who has worked at The Times newspaper for 20 years. Before that she also had stints at The Clarion-Ledger in Jackson, Miss., The Post-Tribune and The News Dispatch in Michigan City.