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School administrators could face $250K cap on contract buyouts

Posted at 4:04 PM, Jan 25, 2019
and last updated 2019-01-25 16:15:05-05

INDIANAPOLIS — Principals, assistant principals and assistant superintendents who leave their school corporations could soon be capped at how much money they can take with them.

Sen. Erin Houchin, R-Salem, filed Senate Bill 281 which would limit contract buyouts to $250,000.

Currently, it is illegal for a school superintendent to receive a contract buyout of $250,000 or more, or more than a year’s salary, whichever is the lesser amount.

The law took effect July 1, 2017.

Houchin said she heard from school corporations who wanted to know if the law also applied to assistant superintendents, principals, assistant principals and other administrators who also have contracts.

“We had some school districts reach out and say this is their circumstance with their assistant superintendent and asked if we meant to exclude them, and that’s not the case,” Houchin said. “We really want to protect these dollars to ensure they’re going into the classroom that they’re safeguarded for teachers and not for outgoing superintendents, assistant superintendents and other administrators.”

If passed into law, the legislation would only impact administrator contracts signed or renewed after July 1, 2019.

“This is just closing that loophole and making sure we treat everybody the same in that buyout law,” Houchin said. “We have a circumstance now where it’s possible for an assistant superintendent to get an exorbitant buyout.”

Senate Bill 281 would require assistant superintendent, principal and assistant principal contracts to be no longer than three years.

Call 6 Investigates exposed former Wayne Township superintendent Terry Thompson’s $1 million payout in 2011, which resulted in a new state law that calls for more transparency in superintendent contracts.

PREVIOUS | Superintendent With $1M Payout Wants More Money | District Admits Superintendent Payout Closer To $1M | 'Super' Salaries Under Fire After $1M Payout

The outgoing Perry Township Schools superintendent received $385,304 in taxpayer money following his abrupt departure from the district.

Dr. Thomas Little received $325,000 per his contract, after he said the district fired him for having an autoimmune disorder.

RELATED | Outgoing Perry Twp supt. received $385,304

Little also received $35,304 for wages, unused vacation and personal days.

Little’s payout was not impacted by the new superintendent law because his contract was signed prior to June 30, 2017.

Houchin’s bill that would apply to other administrators has been assigned to the Committee on Education and Career Development and is awaiting a hearing.

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