Dissolution decision on table for Gary schools; other nearby districts concerned

With a $75 million debt, the Gary Community School Corp. is asking residents to approve a tax increase of 47.5 cents per each $100 of assessed valuation.

That amount could yield $8.7 million a year with 75 percent collection rates, allowing the corporation to pay its debt and eventually become solvent, according to state Sen. Earline Rogers, of Gary.

If the referendum fails, the school corporation could be dissolved or merged into another district, and its approximately 5,000 students could be sent to several school corporations, Rogers said.

It would be the first school corporation of its size in the state to be dissolved.

"I do think it could happen," Rogers said.

She said the corporation's finances are a going concern, and Jack Martin, the district's state-appointed financial manager, told the Indiana Distressed Unit Board in September that consolidation or dissolution would have to be looked at if the referendum doesn't pass.

"I took him at his word," Rogers said.

She said passing the referendum would not only make the district solvent but also show the state that the residents support the school corporation. She said that could make a difference in whether the state will forgive the debt.

If it doesn't pass, it will send a message to the state, and I don't know how the state would respond," she said.

What is not known, according to Rogers and two area school superintendents, is how the mechanics of either action would work.

"This is unchartered territory. I don' t know if there are any answers," said Tom Cripliver, superintendent of the Lake Station School Corp., one of several surrounding districts that could end up taking in some Gary students.

He said Lake Station is an open school corporation, meaning it takes in some students from outside the district at a cost of $400 per child per year, and it could take in a couple of hundred more.

"If you're talking 1,000, that's a different scenario," Cripliver said.

Dr. Sharon Johnson Shirley, superintendent of Lake Ridge School Corp., called the possibility a what-if scenario.

"This is just speculation, and it's not fair to us or Gary," she said. "We just can't accept kids without space or money."

Also unknown is where the Gary school tax money would go if the corporation is dissolved — to the various school districts or to pay off the Gary Community School Corp.'s debt first.

The Indiana State Board of Education did not respond to several email and phone requests made over one week for comment.

Cripliver said school funding from the state is based on the number of students attending school so an influx of students from Gary would bring in more state money for education purposes. Taxes pay for additional costs like transportation and school improvements.

"If we don't get additional money, it would put a strain on an already strained budget," Cripliver said.

In addition to neighboring school districts including Lake Station, Lake Ridge, Merrillville and Hobart, Rogers said, Gary's growing number of charter schools also could enroll the city's students.

"Now that the state has passed a state charter board, it's very easy to shorten the process for charter schools," she said.