INDIANAPOLIS — A new law, signed this week by Gov. Eric Holcomb, will cap how much principals, assistant principals and assistant school superintendents can take with them when they leave a school corporation.
Holcomb signed Senate Enrolled Act 281, which limits contract buyouts to $250,000.
The new law takes effect July 1.
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.
That legislation took effect in July 1, 2017.
Following the 2017 legislation, Sen. Erin Houchin, R-Salem, 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.
"I was pleased to see this bill finally be signed into law after a multi-year effort,” Houchin told RTV6. “This legislation, coupled with SEA 182 (2017), tightens down all school administrator contract buyouts and will save school corporations throughout Indiana millions of dollars. This will be a safeguard for precious resources that should be spent on our teachers, students, and classrooms, rather than to outgoing administrators.”
The legislation impacts administrator contracts signed or renewed after July 1.
“I am grateful to my colleagues in the General Assembly and to Governor Holcomb for his support," Houchin said. “This is just closing that loophole and making sure we treat everybody the same in that buyout law. We have a circumstance now where it’s possible for an assistant superintendent to get an exorbitant buyout.”
Senate Enrolled Act also requires 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.
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.
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.