STATEHOUSE (Jan. 21, 2011) - Members of the State Budget Committee will meet on Monday to consider final approval on loan requests from Kokomo-Center Township Consolidated School Corp. and Northwestern School Corp.
State Sen. Brandt Hershman (R-Lafayette) said the school corporations are seeking loans due to delinquent tax payments by Chrysler Corp., money that, under a bankruptcy agreement, won't be paid back in full until November, 2015.
Hershman and State Sen. Jim Buck (R-Kokomo) in 2009 worked to include provisions in the state budget making loans available to Howard County through Indiana's rainy-day fund for taxing districts affected by the loss of Chrysler's property tax payment.
"Kokomo-Center is owed more than $1.8 million and more than $1.9 million is due to Northwestern," Hershman said. "Thankfully there are laws in place making these loans possible to schools, who through no fault of their own, find themselves with these kinds of financial challenges. This is why it was so important to protect the $1.3 billion in rainy-day budget reserves during the last budget-writing session in 2009."
Hershman said the State Budget Committee will meet at 4:30 p.m. in Room 431 of the Statehouse.
He said the Board of Finance approved a five-year loan at an interest rate of 2 percent in the amounts of nearly $1.5 million for Kokomo schools and approximately $1.6 million for Northwestern schools.
Approval by the State Budget Committee is the final step in the loan process.
Hershman said throughout the five-year loan, Kokomo-Center Township Consolidated School Corp. will receive more than $2.3 million and Northwestern School Corp. will be paid nearly $2.4 million from payments made by Chrysler.