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Muncie takeover sends fears to Marion

BY Carolyn Muyskens - cmuyskens@chronicle-tribune.com

Ball State University is set to take over the Muncie school district with the historic passage of HB 1315 during Monday’s special legislative session.

The unprecedented Muncie takeover has dominated most media coverage, but another provision of the bill regarding the categorization of financially distressed school districts could affect Marion Community Schools and has some worried.

The bill establishes a “fiscal and qualitative indicators committee” to analyze the financial health of Indiana school districts. The committee will identify financially distressed schools, press those schools for financial action plans and potentially add the schools to a watchlist if they fail to implement an action plan.

“On the surface it looks like Marion could be one of the schools affected,” said Bob Schultz, assistant superintendent for business affairs at MCS.

Schultz laid out the criteria the committee will use in making the “financial distress” determination: declining enrollment, expenditures that are greater than the school corporation’s revenue and the ratio between the school corporation’s debt and its assessed valuation.

Schultz said that although MCS appears to meet all of these criteria, which would designate it as financially distressed and in need of a corrective action plan, Schultz is not concerned that the legislation will negatively affect MCS.

Although the school’s expenditures have exceeded revenue, Schultz said the school has been using cash on hand from MCS’s cash reserves for those excess expenditures and is working to close the gap between expenditures and revenue. Schultz also said the declining enrollment and stagnating assessed valuation of the school corporation could be attributed to broader trends in Grant County.

“We can demonstrate, even though we meet those criteria, that we are taking steps,” Schultz said. “If you are obviously making steps towards addressing those concerns, (the committee) would look at that favorably.”

Scott Simpson, the president of the Marion Teachers Association, could not be reached for comment Monday. But at last Tuesday’s school board meeting he spoke out against the legislation, saying that school officials should be concerned about the precedent the bill sets.

“If legislators can take away one community’s board, what’s to stop them taking away another’s?” Simpson said.

Schultz and Scott Deetz, superintendent of Madison-Grant schools, shared these concerns about the Muncie takeover. “A big concern that I have, should worse things happen here, is that the legislators are taking a monumental philosophical step to takeover a school district with an outside entity,” said Schultz.

“That is a grave concern,” said Deetz about precedent-setting. “[The bill] has the opportunity to affect any and all school corporations.”

The new financial distress designations aren’t an immediate worry for Madison-Grant because the corporation has good fiscal management practices in place, according to Deetz. “We’re financially stable, we manage our money quite well. We are watchful but not overly concerned at this point,” he said.

State Rep. Kevin Mahan, R-Hartford City, voted in favor of the bill. He doesn’t believe it will affect Marion Community Schools because MCS has been financially proactive throughout its period of declining enrollment.

“Marion has been out ahead of the curve here. Marion has also been losing hundreds and hundreds of students but they’ve made tough decisions, have closed schools.”

He said he couldn’t say that there wouldn’t be more school takeovers in the future but he argued that the establishment of the fiscal and qualitative indicators committee is designed to prevent more school takeovers.

“The main intent here is really to try to make certain that all these different folks are on the same page, working proactively with these school corporations,” Mahan said.

For him it was an easy voting decision for the most part, aside from the bill’s $12 million loan to the Muncie school district. “We’re rewarding Muncie for decades of bad behavior,” he said of the loan.

Schultz is confident about the short term: “I don’t see any dramatic ramifications to Marion Community Schoools.” But the bill “certainly opens the door” for decreased local control of schools, Schultz said.

HB 1315, which passed the House 63-30 and the Senate 34-14 Monday, now just needs Gov. Eric Holcomb’s signature to become law. Holcomb has publicly backed the bill.