State throws struggling Gary schools a very short lifeline
INDIANAPOLIS — The Gary Community School Corp. may be allowed to draw on a limited state financial backstop if it is unable to continue managing its $8.6 million operating deficit and $103 million debt burden on its own.
The Indiana Distressed Unit Appeals Board voted 5-0 Friday to recommend the State Board of Finance authorize a $3.75 million loan from the Common School Fund if needed to pay Gary teachers and critical vendors through the end of March.
However, DUAB Chairman Micah Vincent insisted that distribution of the borrowed state funds be subject to numerous conditions, including a requirement that the school corporation first try to obtain loans from banks, or other private funding sources, if spending outpaces revenue.
Earlier this month, the district was forced to take out a short-term loan from First Internet Bank to meet its $1.5 million biweekly payroll.
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