LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington St., Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 6691 NOTE PREPARED: Dec 27, 2021
BILL NUMBER: HB 1187 BILL AMENDED:
SUBJECT: Gary Community Schools.
FIRST AUTHOR: Rep. Brown T BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill establishes procedures to appoint members to the governing body of the
Gary Community School Corporation. It establishes procedures for transferring responsibility of financial
and academic matters from the Emergency Manager to the governing body. It provides that the Gary
Community School Corporation is not subject to collective bargaining. It removes obsolete provisions and
makes conforming amendments. It provides that, before October 31, 2024, and before each October 31
thereafter, the governing body must submit a report to the Distressed Unit Appeal Board summarizing the
financial position and operations of the school corporation for the previous state fiscal year. It also repeals
provisions relating to the election of Advisory Board members for the Gary Community School Corporation.
Effective Date: Upon passage; July 1, 2022.
Explanation of State Expenditures: This bill replaces the Advisory Board and the Fiscal Management
Board for the Gary Community School Corporation (GCSC) with a new governing body. The new GCSC
governing body must appoint the Emergency Manager to serve as the GCSC superintendent for the first year
after the GCSC’s status as a distressed political subdivision is terminated. Currently, the DUAB is required
to pay the fees for the Emergency Manager only until the GCSC is no longer a distressed political
subdivision, but this bill requires the DUAB to continue paying the Emergency Manager for one additional
year to serve as the school corporation’s superintendent. The DUAB’s contracted amount with the
Emergency Manager, MGT of America LLC, totaled $3.07 M and $3.35 M in FY 2021 and FY 2022,
respectively. Contracting with the Emergency Manager for an additional year will increase the DUAB’s
expenditures by as estimated $3.0 M to $4.0 M.
The governing body created in this bill is comprised of seven members. Five members are to be appointed
HB 1187 1 by the Secretary of Education, and the remaining two members are also appointed by the Secretary of
Education, with one being selected from a pool of three candidates recommended by the Mayor of Gary and
the other being selected from a pool of three candidates recommended by the Gary City Council. All
members must be appointed by July 1, 2022. These requirements are within the Department of Education’s
routine administrative functions and should be able to be implemented with no additional appropriations,
assuming near customary agency staffing and resource levels.
Explanation of State Revenues:
Explanation of Local Expenditures: This bill creates a new governing body for the GCSC to replace the
existing Advisory Board and Fiscal Management Board, and it sets parameters, membership requirements,
and duties for the governing body. Members of the existing Advisory Board and Fiscal Management Board
do not receive a salary or per diem for being members. However, members of the governing body, by
resolution, have the power to pay each member of the governing body a salary of up to $2,000 per year, as
well as a per diem amount to be approved by the Secretary of State. This may represent an increase in
expenditures for the GCSC of up to $14,000 per year plus the cost of member per diem.
This bill excludes the GCSC from collective bargaining for school employees as prescribed in the bill.
Expenses related to school employees will be determined by the school corporation. This bill also modifies
the definition of “deficit financing” for the GCSC.
Any fiscal impact to GCSC resulting from these provision will ultimately depend on local action.
Additional Information: The new GCSC governing body will serve only in an advisory capacity to the DUAB
and the Emergency Manager until the later of either July 1, 2023, or the date that the GCSC's status as a
distressed political subdivision is terminated. Beginning in 2024, the governing body must submit to the
DUAB an annual report on GCSC’s finances and operations.
The governing body may not meet more often than once per month unless requested to do so by either the
DUAB or the Emergency Manager/superintendent.
The terms for members of GCSC’s current Advisory Board and Fiscal Management Board expire upon
passage of this bill.
Explanation of Local Revenues:
State Agencies Affected: Department of Education; Distressed Unit Appeal Board.
Local Agencies Affected: Gary Community School Corporation.
Information Sources: State of Indiana Public Contract Search.
Fiscal Analyst: Jason Barrett, 317-232-9809.
HB 1187 2