LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
200 W. Washington, Suite 301
Indianapolis, IN 46204
(317) 233-0696
iga.in.gov
FISCAL IMPACT STATEMENT
LS 7226 NOTE PREPARED: Jan 11, 2021
BILL NUMBER: HB 1299 BILL AMENDED:
SUBJECT: Gary Community School Corporation Debt.
FIRST AUTHOR: Rep. Smith V BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL IMPACT: State & Local
X DEDICATED
FEDERAL
Summary of Legislation: This bill appropriates from the state General Fund the amount needed to pay
advances made to the Gary Community School Corporation (GCSC) from the Common School Fund that
are outstanding as of June 30, 2021, regardless of the due dates for the payments.
Effective Date: July 1, 2021.
Explanation of State Expenditures: Common School Fund Loan Forgiveness: The bill appropriates from
the General Fund the amount necessary to pay all of GCSC’s outstanding Common School Fund loans in FY
2022, estimated to be approximately $36.0 M at the end of FY 2021.
Additional Information: As of the end of FY 2020, GCSC had a total of $37.1 M in outstanding Common
School Fund loans. Of the $37.1 M, approximately $11.2 M are for construction loans which have a 4%
annual interest rate. Under current law, school corporations’ monthly state tuition support distributions are
reduced to make payments on outstanding Common School Fund loans. In FY 2021, each of GCSC’s
monthly state tuition support distributions have had $125,772 withheld to pay Common School fund loans.
At that pace, GCSC would have a remaining balance of approximately $36.0 M at the end of FY 2021.
Explanation of State Revenues: The state would realize a loss of future interest earnings on the amount
forgiven. The average yield to the General Fund from FY 2015 through FY 2019 ranged from .17% to 1.96%.
Explanation of Local Expenditures: GCSC would have its remaining Common School Fund Loans
forgiven. [See State Explanation of State Expenditures for additional details.].
HB 1299 1
Explanation of Local Revenues:
State Agencies Affected: State Treasurer.
Local Agencies Affected: Gary Community School Corporation.
Information Sources: State Treasurer, Indiana Comprehensive Annual Financial Reports, Department of
Education databases.
Fiscal Analyst: Austin Spears, 317-234-9454.
HB 1299 2