INDIANAPOLIS —
Legislation that would let financially strapped local governments and school districts in Indiana call in an emergency manager to impose tough fiscal controls may be one step closer to becoming law.
Senate Bill 105, dubbed the “bankruptcy bill” for its provision that would allow insolvent local units of government to file for Chapter 9 bankruptcy, was approved by the House judiciary committee Monday. It’s already passed the Senate.
Rep. Ralph Foley, a Martinsville Republican who chairs the committee that heard the bill, described it as “a way out of chaos” for communities and schools that can no longer pay their bills.
The bill, though, would require local officials to admit they needed that “way out” and be willing to let a state-appointed manager step in to take over financial decision-making. “Itss like they’d be waving a white flag, saying ‘ give up’,” said Cris Johnston, the state public finance director who helped craft the bill. “I can’t imagine too many people doing that.”
The original bill allowed major creditors of a financially distressed local unit of government to petition the state to appoint an emergency manager to take over the powers of the local executive and the fiscal branch of that government unit.
The emergency manager could impose what Johnston has called “tough love” — “stringent cost-cutting that include layoffs and contract re-negotiations.”
That provision has been removed. Under the current bill, the request for help has to come from local leaders, such as a mayor and a city council, or a school superintendent and a school board. They’d have to meet one of eight financial conditions to be eligible for the help. Those conditions include missing two payrolls in a row, or defaulting on a bond payment.
The bill comes at a time when local governments and school districts are struggling with reduced revenues brought on by the recession, property tax caps and cuts in state funding.
Indiana currently doesn’t have a law that would allow a local unit of government to declare bankruptcy.
Under the bill, a local unit of government would have to allow an emergency manager to come in an attempt to resolve the fiscal crisis before it could ask the state for permission to file bankruptcy.
Johnston, who sits on the state’s Financial Distressed Units Board that would evaluate the requests for help, explained the value of an emergency manager by citing his experience with the City of Gary.
For the past three years, Gary has had to ask the state’s permission for a waiver to collect more in revenues than it’s allowed to collect under the property-tax cap. In reviewing those requests, Johnston said he found contracts that had been entered into by the city that should have been renegotiated by city officials there to save money. But the mayor of Gary, up for re-election this year, has gone on record saying he won’t ask the state to appoint an emergency manager if the bill passes.
Rep. Dan Leonard, a Republican from Huntington, voted against the bill in committee, saying he opposed giving local governments the option to file for bankruptcy, because it puts the interest of secured creditors, like banks and bondholders, ahead of small business owners who are often unsecured creditors. Leonard said it would allow for “total irresponsibility of people handling taxpayer dollars.”
The bill now moves to the Senate for debate and vote.
Maureen Hayden is statehouse bureau chief for the Tribune-Star. She can be reached at maureen.hayden@indianamediagroup.com.
Indiana Legislature
‘Bankruptcy bill’ proposed to give local governments ‘a way out of chaos’
- Indiana Legislature
-
-
Legislature approves Indiana sentencing laws overhaul
INDIANAPOLIS — An overhaul of Indiana’s criminal sentencing laws aimed at sending fewer nonviolent offenders to prison has been approved by the Legislature.
-
Budget deal calls for 5 percent income tax cut
INDIANAPOLIS — Indiana taxpayers will see their personal income tax rate reduced by 5 percent over the next four years under a budget plan agreed to by state lawmakers.
-
Revoked charters could be forgiven $12M in loans
INDIANAPOLIS — Indiana lawmakers are considering forgiving $12 million in loans that “failing” charter schools accepted from the state.
-
Indiana House set to vote on school safety grant plan
INDIANAPOLIS — A stripped-down proposal that would start a state grant program toward helping school districts hire police officers and buy safety equipment is set to be voted on by Indiana legislators.
-
Indiana Senate approves minimal voucher expansion
INDIANAPOLIS — The Indiana Senate is signing off on a limited expansion of the state’s school voucher program.
-
Group, bill promote natural gas fueling stations
INDIANAPOLIS — Natural gas advocates want to create incentives for building fueling stations across the state in hopes that more people will operate vehicles using alternative fuels.
-
Senate OKs smaller tax cut than Pence wants
Indiana Gov. Mike Pence appears to be holding firm to his demand for a 10-percent income tax cut, despite some movement from Senate Republicans who are willing to give him a smaller slice of what he wants.
-
Pence: Indiana Senate GOP income tax cut not enough
INDIANAPOLIS — Gov. Mike Pence says an income tax cut in the Indiana Senate’s proposed budget is a start but he’ll still push for the $500 million cut he has proposed.
-
Indiana Senate leader against school guns mandate
INDIANAPOLIS — The leader of the Indiana Senate has come out against a proposal that would require all public schools in the state to have an employee armed with a loaded gun.
-
House panel approves HIP expansion, strips grants
INDIANAPOLIS — An Indiana House panel has altered a plan that would use the state’s Healthy Indiana Plan to expand Medicaid coverage in the state.
-
Bill seeks in-state tuition for some immigrants
INDIANAPOLIS — Indiana lawmakers are considering rolling back the state’s two-year-old immigration law so that illegal immigrants who were attending public colleges then would again be eligible for in-state tuition rates.
-
Bill for tougher Indiana abortion pill law advances
INDIANAPOLIS — A legislative committee has endorsed a proposal that would make Indiana clinics that provide only abortion drugs face the same requirements as clinics that perform surgical abortions.
-
Bill to ban Indiana teacher union deductions advances
INDIANAPOLIS — Indiana public schools would be prohibited from handling paycheck deductions for teachers union dues under a proposal endorsed by a Republican-led legislative committee.
-
Bill advances shifting Indiana voucher oversight
INDIANAPOLIS — A Republican-controlled legislative committee has approved a proposal to shift administration of Indiana’s private school voucher program away from the new Democratic state schools superintendent.
-
Indiana school voucher expansion scaled back
INDIANAPOLIS — Republican lawmakers have scaled back a large proposed expansion of Indiana’s private school voucher system.
-
Pence unhappy with GOP budget, Dems seek tax vote
INDIANAPOLIS — Gov. Mike Pence is deriding House Republicans’ state budget plan that would replace his proposed tax cut with more spending on roads and education.
-
Grants proposed to add police at Indiana schools
INDIANAPOLIS — Indiana lawmakers say they hope to improve security at schools around the state by offering grants toward hiring police officers and buying safety equipment.
-
Indiana Sunday alcohol sales ban likely to remain
INDIANAPOLIS — Indiana’s longtime ban on Sunday retail alcohol sales will likely continue for at least another year as a vote isn’t being scheduled on a bill to lift it.
-
Indiana bill targets undercover video ‘vigilantes’
INDIANAPOLIS — A Senate panel has approved a bill that would make it a crime to take photographs or shoot footage at Indiana’s farms and businesses without the owner’s permission.
-
Bill would give high-performing schools more flexibility
After focusing on failing schools in recent legislative sessions, some Indiana lawmakers say it’s time to reward high-performing schools with more money and more flexibility.
-
Indiana Senate approves right to hunt, farm proposal
INDIANAPOLIS — Indiana voters would decide in next year’s election whether to add the right to hunt, fish and farm to the state constitution under a proposal approved by state senators.
-
Indiana lawmakers push for Sunday alcohol sales
INDIANAPOLIS — Indiana lawmakers hoping to allow stores to sell alcohol on Sunday are facing opposition from liquor store owners, who worry the policy could put them out of business.
-
Bill advances to loosen Indiana superintendent rules
INDIANAPOLIS — School superintendents would no longer have to hold an Indiana superintendent’s or teacher’s license under a bill endorsed today by an Indiana House committee.
-
Bill aims to tighten Indiana laws over ‘bath salts’
INDIANAPOLIS — Indiana legislators are again trying to toughen state laws that prohibit businesses from selling synthetic drugs known as “bath salts” and other nicknames.
-
Cold medicines could face tighter Indiana limits
INDIANAPOLIS — An Indiana Senate committee has backed tougher limits on quantities consumers may buy of cold medications that can be used to make methamphetamine.
-
Indiana senators seek new social networking ban
INDIANAPOLIS — Two Republican lawmakers are looking for a new way to keep registered sex offenders off social media one week after a federal appeals court found a previous ban unconstitutional.
-
Indiana House OKs looser rules on selling old schools
INDIANAPOLIS — The Indiana House has approved a bill that would shorten the time that school districts must hold onto vacant buildings in case a charter school operator wanted to move into the building.
-
Indiana lawmakers don sneakers for anti-cancer effort
INDIANAPOLIS — Numerous Indiana lawmakers and staff members are wearing sneakers around the Statehouse as part of the Coaches vs. Cancer activity sponsored by the American Cancer Society.
-
UPDATE: Indiana lawmakers consider protecting right to hunt
INDIANAPOLIS — Indiana lawmakers have delayed action on a proposed state constitutional amendment that would guarantee the right of residents to hunt, fish and farm.
-
Top Indiana senator seeks gas plant contract review
A top Indiana senator is calling for a review of Indiana’s plans to subsidize a proposed coal-gasification plant.
- More Indiana Legislature Headlines
-
Legislature approves Indiana sentencing laws overhaul
Fatal Hot Air Balloon Accident in Turkey
Tornadoes, Storms Strike Midwest
Raw: Accused US Spy Reportedly Leaves Russia
Raw: Fierce Bombing in Qusair, Syria
'Babyland': Camp Lejeune's Toxic Legacy?
Raw: Swarm of Tornadoes Slams Plains
Raw: Heavy Tornado Damage in Shawnee, Okla
AP CEO: Records Seizure 'Unconstitutional'
RAW: TV Staff Take Cover From Tornado
Raw: Tornadoes Spotted in Kansas
Today in History for May 20th
Probe Begins After Conn. Commuter Trains Crash
Coffee Run Leads to Hatchet Hitchhiker Arrest
Obama Exhorts Good Deeds by Morehouse Graduates
Raw: Gun Scare Mars Cannes Film Festival
Today in History for May 19th
Raw: Driver Ejected From Truck, Over Bridge
Commuters Face Delays After Conn. Train Accident
NTSB Begins Investigation Into Conn. Train Crash
Could Tobacco Be the Next Biofuel?
Raw: Tornado on the Ground in Oklahoma
RAW: Russian dash cam catches car 20 feet in the air
Couple Argues As Woman's Lover Crawls Out Window
RAW: Brad Paisley Forgets Lyrics To His Own Song
Justin Bieber Gets Booed
New 'Anchorman 2' Trailer, Drake Joins List of Rumored Cameos
Eva Longoria's Wardrobe Malfunction
Heat Star Dwyane Wade Surprises Coral Gables Teen At Prom
Steak n' Shake waitress scores huge tip
Singer Miguel Accidentally Lands on Fan At Billboard Music Awards
Celebs Celebrate the Rise of the Side Butt
Grizzly bear gets up close and personal with camera
Justin Bieber Gets Booed After Winning at the Billboard Awards
Singer forgets lyrics, makes up words to National Anthem
Who is $600M Powerball winner in Fla.?
Top 5 Plays of the Day
Sailor Surprises His Mom At Her CU Denver Graduation Ceremony
Twiggy, the Waterskiing Squirrel
