House Ways and Means Committee Considers Bill to Help Local Districts

Today, in House Ways and Means, the committee considered HB 1110, authored by Rep. Wendy McNamara (R-Mount Vernon) which would extend for another 2 years, a school district’s ability to use a portion of funds in its Capital Projects Fund to pay for utilities and liability insurance costs.  This issue is extremely important to every school district.  It amounts to $200 million statewide.  Without this extension, districts would have to divert (to the tune of $200 million statewide) general operating funds for these expenditures, which would cut into existing program and staff obligations.  As was brought out in testimony, this bit of flexibility in funds has been in operation since 2001.  We all agree that general fund monies to the degree possible need to be preserved to directly benefit services to children. 

There was a second concept in Rep. McNamara’s introduced bill on which she has offered an amendment to delete.  This second concept would enable local school districts to transfer money among all of the funds.  The bill included a prohibition that any funds transferred could not be used to bargain salaries and benefits or to provide increases to school employee salaries and benefits.  Again, Rep. McNamara is proposing to remove this from the bill to keep HB 1110 clean.

This second concept generated considerable conversation among committee members about how schools are currently funded—based upon separate “funding silos” (ie. General Funds, Capital Projects Funds, Debt Service Funds, Transportation Funds, Rainy Day Funds, etc…) and whether there was need for a change.  ISTA took the opportunity to talk a bit with committee members about how anecdotally some districts transfer some general fund monies to rainy day funds and/or into accumulated cash balance accounts.  ISTA hopes to share some updated information with committee members as the session progresses.  The LSA fiscal note on the bill highlighted the balances in the various school funds as of Dec 2011. 

ISTA thanked Rep. McNamara for bringing the utility/liability insurance extension forward in HB 1110.

TAKE ACTION:  Please send an email to Rep. Wendy McNamara (h76@in.gov) thanking her for bringing HB 1110 before the committee to assist every school district in this state and for removing the second concept from her bill in an effort to keep it as “clean” as possible and so that more discussion on separating school funds, etc… can occur on its own merit.