A plan that would’ve allowed the state to take control over finances and academics in Gary and Muncie would now offer Muncie schools some relief from the threat of academic takeover.

Muncie educators and lawmakers were vocally opposed when their C-rated district was added into Senate Bill 567. The district is facing significant debt issues and feared potential state control of its academic programs as well as its finances. But a final version of the bill that passed with bipartisan support in the Senate and House late Friday scaled back the original plan, removing the academic piece. Financial control is still part of the deal.

“We’ve laid out a path that they may follow so that hopefully, in the next six months, they can right the ship,” said Sen. Luke Kenley, a Noblesville Republican and author of the bill. “I know the community of Muncie is not happy about this, but perhaps it is a wake up call at the right time to get things accomplished.”

Sen. Eddie Melton, a Democrat from Merrilville and the bill’s second author, agreed with the decision to adjust the plan for Muncie schools and encouraged lawmakers to continue these conversations about how to help struggling districts.

The bill next heads to Gov. Eric Holcomb for consideration to be signed into law.

The Gary school district would be on-track for the state to take over both academics and finances. A few provisions called for by local lawmakers were also added in, such as first considering a Gary or Lake County resident for the role of “emergency manager,” the person who’d take charge of the takeover.

Kenley said he specified in the compromise version of the bill that these measures are “not precedent for and may not be appropriate for addressing issues faced by other” districts. Kenley said he hopes the work he and Melton have done on the bill can help Gary schools and that the financial requirements placed on Muncie would be a “wake-up call.”

“This is not a pleasant task, but it’s one that needs to be done,” Kenley said of the Gary plan. “We have a long way to go and a lot to do.”

Lawmakers came up with the takeover strategy to solve long-standing financial troubles in Gary Community Schools, which has racked up $100 million in debt and dwindled to fewer than 6,000 students. The district has also been labeled an F since 2011, with seven schools considered failing.

The bill originally designated Gary and Muncie as “distressed political subdivisions” and moved them under the auspices of an emergency manager, fiscal management board and chief academic officer. In the new plan, Gary would remain a distressed political subdivision, but Muncie would be considered a “fiscally impaired” district, a less harsh category that wouldn’t require they have a chief academic officer but still places them under a stringent plan to shore up their finances and requires them to appoint an emergency manager.

Sen. Tim Lanane, a Democrat from Anderson, near Muncie, spoke on the floor and cautioned lawmakers not to be so quick to take such serious action unless it is fully warranted. Further labeling districts in this way, he said, could cause them to deteriorate further if more families decide to leave.

“What we’re doing here as a precedent is very, very important,” Lanane said. “A community’s reputation is at stake here.”