School Funding
Our School Funding
State Funding (Education Fund)
Indiana distributes state money to districts based on student enrollment — also called Average Daily Membership (ADM). This pays for teacher and staff salaries, classroom instruction, and student services. But the formula hasn't kept pace with inflation, meaning the same amount buys less every year.
Did you Know -
Over 92% of our Education Fund dollars pay salaries and benefits in WT
Local property taxes (Operations Fund)
Local taxes cover the day-to-day costs the state doesn't fully fund: transportation, utilities, building maintenance, and security staff. When property values change or legislation shifts, this revenue can shrink — even if the tax rate stays the same.
Did you know -
The Operations Fund is Different From the Education Fund
Indiana separates school finances into different funds with specific purposes:
- Education Fund – classroom instruction and student learning
- Operations Fund – facilities, transportation, maintenance, safety, and operations
Operating Referendum Fund
An operating referendum is a voter-approved funding measure that allows an Indiana school district to raise additional property tax revenue to support day-to-day school operations.
Did you know -
Our Operation Referendum Fund pays for additional positions
- Student supports - Counselors and mental health
- School Resource Officers
- Transportation Personnel
- Essential Administrative & Classified Staff
Debt Service Fund
The Debt Service Fund in Indiana schools is used to pay for long-term building and facility debt approved by the community. It is separate from the district’s day-to-day operating budget and can only be used for debt-related purposes.
Debt Service Fund Pays For
The fund is primarily used to repay loans or bonds issued for major capital projects such as:
- Building new schools
- Renovating or expanding existing schools
- Safety and security upgrades
- Roof, HVAC, and infrastructure replacements
- Athletic or performing arts facilities
- Major site improvements
How It Is Funded
The Debt Service Fund is funded through local property taxes collected from taxpayers within the school district.
When a school corporation borrows money for a project, the district creates a repayment schedule. Property tax rates are then established annually to generate enough revenue to make those debt payments.
Key Characteristics
- Restricted Use: Money in the Debt Service Fund cannot be used for teacher salaries, daily operations, transportation, or classroom programs.
- Long-Term Obligations: Debt is often repaid over many years through bond payments.
- Community Oversight: Many large construction projects require public hearings and may require voter approval depending on the project type and funding structure.
- Separate From Operations: This fund is completely separate from the Education Fund and Operations Fund used for daily school operations.
Why It Matters
The Debt Service Fund allows school districts to make major facility improvements without paying the entire cost upfront. Instead, costs are spread over time so current and future taxpayers contribute to buildings and infrastructure that serve students for many years.
Federal Funding
Indiana public schools receive federal funding to help support students and programs that go beyond what state and local funding alone can provide. Federal dollars typically make up a smaller portion of a school district’s total budget, which are restricted to specific uses and cannot be freely redirected to cover general operations.
Types of Federal Funding
- Title I – Support for Students in Poverty
- IDEA – Special Education Funding
- Title II – Teacher and Principal Support
- Title III – English Learner Support
- School Nutrition Programs
Did you know -
- Most Federal Funds Are Restricted
- Federal Funding Often Supports High-Need Students
- Federal Funding Comes With Accountability Requirements
Financial Reports & Budgets
History of Indiana School Funding Reform
Indiana’s school funding system has evolved significantly over the past several decades to improve equity, transparency, and sustainability for taxpayers and schools.
Before 2008
Operations & classroom instruction funded by local property taxes. Funding based on community wealth. Large disparities between schools.
2008 Major Reform
Responsibility for classroom funding shifted to state. Established the Education Fund. Funding based on Average Daily Membership (ADM)
Post-Reform
Local property taxes restructured. Funds created for non-instructional needs (Operations Fund, Debt service Fund). Operating referendums allowed.
Today
State, property taxes, federal grants make up primary sources for schools. Operating referendums used to supplement educational funding.
SEA 1
What Recent Indiana Legislation (SEA 1 and Beyond) Means for Our Schools
Recent changes in Indiana law—including Senate Enrolled Act 1 (SEA 1) and related legislation—represent one of the most significant shifts in school funding in over a decade. These changes primarily impact how local property tax dollars are distributed, especially between traditional public schools and charter schools.
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- Property tax reform (SEA 1) reduces the overall growth of local property tax revenue available to schools.
- New laws now require school districts to share certain local funds—including operating and referendum dollars—with eligible charter schools located within district boundaries.
- This sharing requirement applies when:
- At least 100 students or 2% of district students attend charter schools
- The funding shift will be phased in beginning in 2028, reaching full implementation over several years.
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Historically, locally approved referendum dollars stayed entirely within the public school district voters supported. Under the new law:
- Locally approved funding will now be shared
- Districts will have less control over how those dollars are used
- Funding will follow students across both traditional and charter public schools
Supporters argue this creates fairness across public school options. However, many school leaders across Indiana have expressed concerns about long-term financial impacts on district-operated schools.
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For Washington Township, these changes have real and immediate implications:
- Reduced Local Funding
- A portion of referendum and property tax revenue will be redirected to charter schools
- This means fewer dollars remain for district-operated schools, even if voters approve funding locally
- Potential Impact on Students & Programs
Over time, reduced funding could affect:- Staffing levels (teachers and support staff)
- Class sizes
- Academic programs and course offerings
- Student services and supports
Many districts across Indiana are already reporting concerns about staff reductions and program cuts due to property tax changes.
- Increased Importance of Referendums
- Referendum funding remains one of the few flexible, locally controlled funding sources
- However, because these dollars may now be shared, renewing and maintaining referendum support is even more critical
- Long-Term Financial Pressure
- The impact will grow over time as the law phases in (2028–2031)
- Districts may face increasing pressure to:
- Reallocate funds
- Delay investments
- Make difficult budget decisions
- Reduced Local Funding
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Indiana’s recent legislation is shifting school funding toward a model where:
- Funding follows students across all public school types
- Local tax dollars are shared more broadly
- Districts must do more with fewer directly controlled resources
For communities like Washington Township, this makes local engagement, transparency, and voter support more important than ever to sustain high-quality educational opportunities.
Did you Know
- Indiana ranks LAST in the nation in theincreases in education spending 2003-2023
- Indiana has lost $4.2 BILLION since 2009 due to the imposition of Tax Caps
- Indiana ranks 37th in the nation on per pupil spending
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School FundingHow are schools funded in Indiana?
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ReferendumWhat is a referendum & our history?
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2026 RenewalWhy do we need a renewal & what's at stake?
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Understanding Your Tax BillWhat is the impact to your property tax bill?