Cuts mulled after East Chicago schools referendum fails

Superintendent Paige McNulty said Thursday that she and the school board plan to meet in executive session in the next few weeks to "regroup and see where we go moving forward," she said.

The goal is to keep "cuts as far away from kids as possible," McNulty said.

While referendums in Munster and Lake Station passed Tuesday, East Chicago voters rejected its operating referendum by a nearly 4-1 margin: 78.18 percent to 21.82 percent.

East Chicago had proposed an increase of 30 cents per $100 of assessed valuation to raise about $41 million over a seven-year period. It's estimated a home valued at $80,000 would be assessed an additional $68 a year in property taxes.

"We've been operating in a crisis mode, it's very difficult," said school board member Jesse Gomez. "I just fear that things will get much tougher before it will get better.

In retrospect, he said proponents could have better conveyed the board's efforts to cut the budget in recent years. "Maybe our message wasn't as clear as it should have been," he said

Critics of the referendum said they felt there was a lack of transparency in the process and not enough information on where the money would be specifically spent, criticizing administrator pay when other programs were in danger of being cut.

"I think the message was sent that includes the community," said East Chicago Councilwoman Gilda Orange, D-6th. "You cannot disregard people when you are asking them to pay."

McNulty on Friday said the process was transparent and the school board voted in favor of putting the referendum on the ballot.

"It seemed to me (some opponents) spoke without knowing where we had come from to get a solid financial footing," said Gomez, adding, "I don't get the logic of people who kept moving the target" with administrator pay criticisms. "I think we've been very transparent," he said, noting their budget is available online and that school board meetings are open to the public.

Prior to the vote, officials listed potential cuts that could result from failure to pass the referendum, including closing two elementary schools and cutting up to 70 jobs, with teaching, security, support and maintenance positions at risk; increasing class sizes; cutting college-level classes, athletic programs and after-school tutoring; and reducing transportation.

McNulty said no firm decisions had yet been made on any cuts. No decision had been made on whether it will seek another referendum at a future date.

"I do not see much of that happening," East Chicago Federation of Teachers Local 511 head Reginald Tisdale said of teacher layoffs. He said it was more likely nonlicensed teachers would first face cuts.

"The referendum was a big disappointment," he said. "Residents maybe for several reasons felt they weren't ready for it."

In Indiana, there is a one-year waiting period before a school district can seek an additional referendum.

The East Chicago district faces twin financial challenges heading toward 2020: How to cope long term with its enrollment drop due to the city's lead crisis, and the end of exemptions to state-mandated property tax caps.

That year, Lake County will feel the full impact of the tax caps approved by voters in 2010. Because the debt load was so high in Lake and St. Joseph counties, the state allowed the caps to be phased in over 10 years.

The school district has absorbed a nearly $4 million loss since the city ordered the relocation of residents from the West Calumet housing complex last year. School officials shuttered the neighborhood's Carrie Gosch Elementary School and took out a $2.8 million state loan to renovate a former middle school and relocate students there.

The district is scheduled to begin repaying that loan in January 2018, McNulty said earlier. It still owes $2.2 million on the shuttered building, which has drawn interest but no buyers yet.