Gary Community School Corp. officials said Monday it has reached the fiscal promised land — a budget surplus — after years of nagging deficits that threatened its existence.
“It’s a milestone many thought wouldn’t happen, we’re now in position for the next phase of the turnaround,” said Eric Parish, vice president of Florida-based MGT Consulting LLC, which has been running the district since its 2017 state takeover.
Parish delivered his remarks to the state Distressed Unit Appeal Board, the governmental body that oversees its spending and academics.
Parish said the district’s books reflected a $2 million surplus in December, down from a $21.5 million deficit in 2017 when the state eliminated Gary’s superintendent and elected school board in favor of an emergency manager with wide-ranging authority.
“The hardship goes back more than a decade,” Parish said. “They were barely staying afloat, two referendums were voted down, and the average loss was 700 students a year for decades.”
DUAB chairman Justin McAdam called it a “monumental achievement,” and while the purpose of the district is to educate students, it’s hard to do that without a solid stable foundation, he said.
McAdam credited MGT for its cost reduction effort and also Gary voters who approved a 2020 $72.1 million referendum.
“When we set out on this task in 2017, I don’t know if anyone thought we could accomplish financial solvency at that point. The picture was grim and picture was daunting,” he said.
Parish said it took several difficult cost-cutting decisions to reduce the deficit.
MGT officials said the district had 56 administrators in 2017 who accounted for more than $4 million in payroll. A district spokeswoman said 23 administrators had their jobs terminated.
Others lost jobs, too, including custodians, media/library specialists and clerks and secretaries.
MGT officials the district also opened bidding on many contracts that led to vendor competition and more affordable options.
The district’s long-term debt stood at $104 million in 2017 and is about $71 million today. About half that amount is owed to the state for loans.
When the referendum passed, teachers received a raise for the first time in a decade. Gary’s teacher union supported the referendum campaign.
The district was also the recipient of an unexpected pot of money in federal relief funding during the coronavirus pandemic.
Three federal rounds of money provided $72.5 million.
Carole Carlson is a freelance reporter for the Post-Tribune.
