Chrissy Alspaugh, The Republic

     Local educators said a bill passed Friday by Indiana General Assembly that aimed to provide relief to cash-strapped school districts will have little or no impact for many corporations. 

    State lawmakers worked until nearly midnight trying to agree on the bill that will allow districts to transfer money from Capital Projects Fund into General Fund, to help make up for the state’s funding shortfall. 

    Gov. Mitch Daniels in December announced public school cuts of $300 million, which will reduce General Fund budgets by 3.5 percent. 

    The bill will allow corporations to move up to 5 percent of their CPF budget into General Fund with no strings attached, or up to 10 percent if the district and teachers can agree to salary freezes. 

    State Rep. Milo Smith, R- Columbus, said the bill applies only to the 2010-11 school year, and districts will be able to transfer no more than what they lost in General Fund due to the cuts. 

    Gov. Mitch Daniels intends to sign the measure into law when it reaches his desk, said Press Secretary Jane Jankowski. 

    “It was a tough debate, but I think we came out with the best bill we could, under the current economic circumstances,” Smith said. 

    He said legislators aimed to help corporations avoid teacher layoffs.

Schools: Little impact 

    Local educators said school districts using Rainy Day Funds already were allowed to transfer money into savings and then into other funds for emergencies. 

    Moreover, they said the Rainy Day Fund allows them to transfer more money, and without strings. 

    “(The new bill is) not really going to do us any good,” said Brownstown Community School Corp. Superintendent Roger Bane. 

    Tonight he will recommend to the School Board whether to cut more than $1 million from the district’s General Fund budget by closing Freetown Elementary or making drastic, districtwide cuts. 

    Bane said his district already has a Rainy Day Fund, which saves unexpended funds for emergencies. 

    The transfer bill would result in the freeing up of about $65,000, he said. 

    Vaughn Sylva, assistant superintendent of financial services in Bartholomew Consolidated School Corp., said the bill also seems to hold “nothing new for us.” 

    However, he said administrators will research the bill’s implications and discuss whether it could provide any assistance to BCSC. 

    Sylva said that assuming the bill introduces no new restrictions on Rainy Day Fund, “we’ll likely still be in the same mode as before.”

Helping when possible 

    Smith said the bill contains no changes for Rainy Day Fund but simply provides a fund-transfer mechanism for districts without such an emergency savings fund.
 
    Flat Rock-Hawcreek Schools, for example, until now has had no way of transferring surpluses between funds, said Superintendent Philip Deardorff. 

    FRHC’s budget this year reflects $300,000 in state funding cuts, and officials are in the midst of coming up with a budget-reduction proposal. 

    Deardorff said the bill would free up about $60,000 from CPF for General Fund. 

    “There’s a possibility that it would help,” he said. “We’ll just need to see if there are too many strings attached.” 

    Smith said he fears public schools will face further cuts as the state continues losing funds. 

    “The state is collecting almost $3 million less per day than when we set our budget for this year. Common sense tells me we’re naïve to think these cuts are the last,” he said. 

    Daniels also on Monday said public schools will face an “extraordinarily difficult” state budget next year unless the national economy shows significant improvement. 

    He said so far, Indiana has “nicked” school funding instead of “gouging” it like other states. 

    Daniels said the state’s priorities will be to maintain fiscal solvency and its AAA credit rating over the next 10 months before lawmakers begin writing a new state budget.

Other bill highlights 

    Smith said the final version of the education bill also:

  • Urges school districts to consider joining the state health care plan if their insurance contribution costs more than the state’s, about $13,000 for a family plan. 

        He said some districts pay up to $24,000 per family plan. 

        BCSC teachers and administrators have two insurance plan options for which the district annually contributes $6,312 or $6,332 for an individual and $15,714 or $15,607 for a family. 

  • Ask districts to give priority in their resource allocation to struggling readers in kindergarten through third grade. 

        Legislators eliminated previous language that would have required districts to hold students back if they fail to read on grade level in third grade.)
  • Excludes a previous proposal to delay the first day of school until after Labor Day.