Crack down on school official severance payouts amendment advances

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News release from Indiana State Senator Jim Banks:

Banks: Education committee advances amendment cracking down on school official severance payouts
Columbia City lawmaker also offers key amendment encouraging transparency of local school budgets

(STATEHOUSE, April 14, 2011) – Members of the Senate Committee on Education this week voted in favor of an amendment that would limit school administrators’ severance payouts, a move State Sen. Jim Banks said would cut down on abuses that sometimes saddle districts with hundreds of thousands of dollars in farewell costs.

Lawmakers voted 8-2 in favor of Banks’ amendment to House Bill 1369 – legislation that would link school administrator pay to performance.

“If passed, local school boards would limit administrators’ severance packages to not more than one year’s salary,” said Banks (R-Columbia City). “I respect the jobs our local superintendents do, but I also believe it’s important we find ways to stem public spending and ensure more dollars are spent directly on educating our children.”

Earlier this year, Banks said taxpayers were outraged over a media report that an Indianapolis area superintendent’s severance package exceeded $1 million.

“As public servants, one of our most important duties is to be good stewards of the public’s money,” Banks said. “During these difficult economic times, we cannot afford to award excessive severance packages to public servants.”

During his State of the State address, Gov. Mitch Daniels pointed out forty-two cents of the education dollar are spent on administrative costs rather than students.

Banks hopes to explore other options for reining in administrative costs in order to reach a goal of 65 percent of education dollars being spent in the classroom.

Committee members also voted 9-1 in favor of Banks’ amendment requiring local school corporations to post their budget information to the Indiana Department of Education’s (IDOE) website. Banks said the IDOE would maintain the database listing fund balances, operating expenses, contracts, benefit packages, grants and leases.

“This marks an important step in increasing transparency among our local school corporations,” Banks said. “It is important for taxpayers to know where and how their dollars are being spent.”

A local school corporation would be required to post a link to their budget information on their districts’ website.

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