The Gary School Board agreed Thursday to dip into its cash reserves to cover more than $5 million in unexpected expenses not included in its 2025 budget..
After a public hearing, the board voted to add $2 million into its operations fund; $2.5 million into the education fund and $548,244 into the debt service fund.
Chief Financial Officer Linda Zaborowski said the district needed approval to spend more money than originally appropriated in its budget last year, per the Indiana Department of Local Government Finance.
Zaborowski attributed the shortfall to unexpected expenses, including a new teacher bargaining agreement and repairs at the Frankie Woods McCullough Academy after a March 19 tornado ripped the roof off the gym.
“I would have never imagined a tornado, but we had one,” she said. The district had to pay $450,000 from its operations fund for repairs at the school. Zaborowski said the district’s insurance company will reimburse it, but the bill needed to be paid in November.
“I just can’t overspend,” she said of the need for the additional appropriation action. “We do have cash in our cash balance to support what I’m requesting.”
The education fund needed more money because an agreement reached with the Gary Teachers Union gave teachers a raise and some received stipends. Administrators and other staff also got raises.
In addition, Zaborowski said the state mandated districts to adopt the science of reading for its literacy curriculum and the district had to purchase about $650,000 in new curriculum materials and provide professional development for teachers.
A weak property tax collection rate of 52%, which is reduced further by a new revenue sharing law with the city’s eight charter schools, led to a transfer out of operations to debt service to support common school fund loans, Zaborowski said.
Also, Zaborowski said for years the district didn’t align its debt payments within the budget period. She realigned the payments in June and December to be paid within the budget cycle.
During the public hearing, Gary attorney and parent Tracy Coleman asked why the district used a cash-based accounting method instead an accrual method, which matches income with related costs, unlike cash accounting which records revenue when money is received. She said the accrual method would be easier for taxpayers to understand.
“The budget hearings put us at a disadvantage. We’re at the mercy of the CFO and what numbers she wants to give us. I ask we look at the way we budget.”
Zaborowski said districts throughout Indiana use the cash accounting method and changing would make it difficult for Gary to compare its finances with other districts.
Coleman complained the district has failed to address the non-functioning swimming pool at the West Side Leadership Academy, the lone pool in the district. The pool has been closed for years because the district couldn’t afford to repair it.
She said it’s important for children to learn to swim given the proximity to Lake Michigan.
Zaborowski said a pool expert from Detroit recently examined the pool and she’s waiting to hear his findings.
Carole Carlson is a freelance reporter for the Post-Tribune.
https://www.chicagotribune.com/2025/12/22/cash-reserves-rescue-gary-school-budget-shortfall/
