MICHIGAN CITY | School officials in Michigan City are now staring at tough decisions after voters Tuesday in Michigan City and Pine Township in Porter County defeated a request for a property tax increase to close a more than $4 million budget deficit.

"We have our job now cut out for us," said school board member Beryle Burgwald.

The school board at its next regular session Tuesday may start discussing what to do.

There were strong indications about eliminating teachers and closing schools during the campaign but there are other options like redistricting to save on costs and borrowing money to close the budget hole.

"I don't know what's going to transpire," said school board vice president Jim Kintzele.

By a 57 to 43-percent margin, residents voted against a tax increase that would have meant a more than $50 increase in the annual property tax bill for average homeowners.

The money generated would have closed the deficit still remaining after more than $7 million in cuts had been made over the past two years by eliminating 100 teaching, administrative and non-teaching positions.

The school corporation has $91 million in outstanding debt mostly from construction projects.

Burgwald said the district has exceeded its state bonding capacity limit but could still borrow by creating a holding corporation to secure a note to get around the law. But Burgwald said he frowns on the idea of going deeper into debt.

He said another referendum next year is another option but wonders if that would be successful given the trouncing by voters despite the efforts of a public relations firm to help build enough public support.

Burgwald said closing schools might not be enough due to the costs associated with still having to maintain those buildings.

He did say redistricting the elementary schools to fill empty seats at Pine and Lake Hills elementaries could make a large dent given the over $200,000 saved last year by redistricting the three middle schools.

Burgwald said going in he felt the referendum would either suffer a large defeat or a narrow victory.

"A majority of voters in effect said, 'I guess that education don't mean nothing.'"

Other ideas expressed previously by some board members also include doing away with all student athletics.

"We're facing some real dilemmas," said Kintzele.

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