It is no secret that public school funding is in crisis all over the country. In Muncie, Indiana, school funding has reached a critical point as the district was turned over to a team of emergency financial managers in June 2017. This quintessential American town is not alone in losing local control of its school district’s finance. Many emergency managers decide to close schools to reduce expenses, but this solution will not work in Muncie, as it has already been tried and proven to fail. Instead, the emergency managers should look at other, less common solutions to help this distressed school district find the same success that other formerly distressed districts have used.
The financial problems started when enrollment began to decline and the school financial deficit began to grow. In the 2015-2016 school year, over 220 students left the district. When students leave the district, the district loses their per-pupil state funding, which is $6000 to $6400 per student. This loss was about $1.3 million. To compensate for the losses that began in 2010, the district has depleted its fund balance that was over $4 million. Now, the district has a deficit that is thought to be around $10 million. However, there is about $10 million in bond money that is meant to be spent on facilities in the district. Since it was raised through a bond, that money cannot be added to the general fund and must be spent on facility improvement.