Gary taxpayers could be facing a school tax referendum next year, a school official said Thursday.
Eric Parish, a vice president with the MGT Consulting Group, said the referendum is part of a plan to reduce debt in the Gary Community School Corp., which is overseen by the state.
The amount that would be sought in the referendum was not detailed during the Distressed Unit Appeal Board meeting in Indianapolis.
Parish said research showed that success of the referendum would be bolstered if turnout was high and typically more voters show up at the polls during a presidential election year.
In 2015, voters narrowly defeated a $51.8 million referendum.
After Parish presented a rundown of the district’s debt reduction strategy, the DUAB awarded MGT Consulting Group, the district’s emergency manager, a $100,000 incentive for reducing the district’s accrued liabilities by $400,000.
Parish said the district had an operating deficit of $22 million when the emergency manager arrived in mid-2017 when the state took over the district because of its troubled finances and academics.
Today, Parish said the deficit has been cut in half to $11 million.
Parish said the district’s long-term debt stood at $91 million, down from $104 million in 2017.
It’s unclear how the projected impact of 2020 tax caps will have on the district, but it likely will create serious financial challenges.
Gary Schools Recovery LLC, a subsidiary of MGT, is managing the district under a $6.2 million three-year contract that provides for incentives of nearly $1.5 million for hitting certain financial benchmarks. Last year, the firm received $200,000 in incentives.
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