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Takeover of Financially Strapped District in Miss. Sought

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Mississippi legislators are working feverishly to pass a measure allowing the state to take over a financially troubled school district before it runs out of money.

The effort faced a temporary setback earlier this month when Gov. Kirk Fordice vetoed a bill that would have enabled the state to appoint a conservator immediately and bail the North Panola district out with a no-interest loan.

Gov. Fordice argued that the loan funds should not come out of the state's "rainy day" fund, saying that money should be reserved for statewide emergencies, not used for local crises. But he pledged to sign new legislation if the money for the bailout came out of the education budget.

Current projections are that the 2,206-student district in the northwestern Mississippi town of Sardis will be able to pay teachers this month. But it is facing a $1.2 million deficit in its $10 million budget and is not expected to meet its payroll or pay other bills in March.

Although a 1991 law already allowed the state to take over a school district, legislators were concerned it could take as long as six months to take all of the steps spelled out in the law. (See Education Week, Jan. 17, 1996.)

Last month, the legislature passed a bill intended to expedite the process by giving the state education department greater latitude to take over troubled districts quickly.

After Mr. Fordice's veto, legislators last week were forced to suspend House and Senate rules in order to introduce a new bill. By late last week, the measure to suspend the rules had passed the Senate and was being debated in the House.

Under the new bill lawmakers planned to introduce once the rules question was settled, funds for a $1 million, five-year loan for North Panola would come out of the state's education-enhancement fund.

Fund Source Debated

But proponents of tapping the rainy-day fund do not like the new strategy, which the governor said he would approve.

"Why are we continually tapping the education-enhancement fund for circumstances that clearly aren't enhancement?" asked Tom Harvey, the executive director of the Mississippi Association of Educators. "This latest raid on those monies makes no sense, but politically there is nothing you can do at this point."

The MAE has already gotten into the thick of the North Panola crisis.

When the cash-strapped district was only able to issue teachers 70 percent of their December paychecks, the union provided nearly $25,000 in emergency loans to help 30 of North Panola's 144 teachers pay their bills.

In the district last week, the spotlight shifted to the school board.

State Auditor Steve Patterson sent letters to bond agencies representing school board members, the current superintendent, and his predecessor, ordering repayment of the district's $812,824 deficit as of last June.

School board members and superintendents in Mississippi are fiscally liable for any funds spent in deficit. But state law requires that they be backed by bond agencies, in amounts of $100,000 for superintendents and $25,000 each for board members.

Tom Burnham, the state schools superintendent, said the district has put together a three-year recovery plan that requires cutting administrative positions and eliminating some extracurricular activities.

The district's plan may also entail firing other nonteaching employees, including food-service and transportation workers.

"We are going to protect the classroom," he said.

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