INDIANAPOLIS — A bill designed to give flexibility to Indiana school districts facing transportation budget reductions unanimously passed the state Senate on Thursday.

House Bill 1062, co-sponsored by Sen. Randy Head, would allow school corporations that have lost at least 10% of their transportation fund levies due to circuit breaker credits (property tax caps) to use money from other funds to pay for transportation through 2016.

As one example of the financial troubles affecting Indiana districts, the Metropolitan School District of Decatur Township reportedly faces a $2.5 million annual budget shortfall and will lose $7.5 million to property tax caps in 2014. The district has given notice that it may discontinue transportation service in 2017 if an additional local property tax doesn't pass on a May 6 ballot.

"Maintaining transportation is a big concern for many Indiana schools," Sen. Head said. "Legislators have been working hard to find a solution to the obstacles school corporations face. House Bill 1062 provides necessary relief to struggling school corporations, ensuring they are able to keep buses running to provide safe and reliable transportation for students."

The legislation would also extend a financial relief bill for schools by allowing districts that lose at least 20% of their levies from circuit breaker credits to refinance existing debt. This statute expired in 2013, but HB 1062 would extend it through 2018.

After passing the Senate on Thursday, the bill returned to the House for further consideration.