Rep. Patterson Proposes School District Debt Reform
House Bill 216 to benefit struggling schools, allow debt forgiveness through consolidation
June 19, 2013
 
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State Rep. John Patterson (D-Jefferson) announced today that he introduced House Bill 216 to allow for the forgiveness of debt owed to Ohio’s Solvency Assistance Fund by an Ohio public school district.  The forgiveness of debt will only be applicable to qualifying school districts that are willing to be consolidated with an adjacent district.


“This bill will allow schools that have no other recourse to find a path to solvency that will benefit the families and communities they serve,” said Rep. Patterson. “My chief concern in crafting this bill is to help Ohio’s poorest school districts– ones that are crippled by debt and have had trouble passing even the most modest levy -in order to become solvent. We are simply creating a pathway to better education.”


According to the legislation, in order for a school district to qualify for debt forgiveness, the district must be voluntarily dissolved and transferred to a contiguous school district. The district must already owe at least 33 percent of their operating budget for the current fiscal year to the Solvency Assistance Fund, up to $10 million, and have remained in a state of fiscal emergency during the previous two fiscal years.


Additionally, the acquiring school district must provide the state with a five year solvency plan in order to absorb the transferring school district.


“The provision requiring the school district that is absorbing the failing district to present a five year solvency plan is so important,” added Rep. Patterson. “We don’t want to see another school district fail by taking on these schools. We want to be sure that they are not only a right fit for the incoming students, but also that they themselves will remain solvent. We feel that by presenting a five year solvency plan, they will be able to prove their viability in accepting the new school and students.”

 
 
 
  
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