Indiana Public School Funding establishes six (6) main funds. Each of these funds receives local support through License Excise taxes, Commercial Vehicle Excise taxes and Financial Institute taxes. The General Fund receives revenue from the State of Indiana based upon several key data components – student count, vocational programming student enrollment, special education programming enrollment, at risk student component, number of students that graduated with Academic Honors Diploma, special funding to support high ability student programming, professional development for staff, and funds to support remediation programming for students.
Beginning January 1, 2009 The General Fund and the Special Ed. Preschool Fund are 100% State Funded. The other funds – Debt Service, Pension/Severance Debt, Capitol Projects, School Transportation and Bus Replacement are funded through local property tax.
The level of funding and local support is determined by a process that begins with submission of a proposed budget to the local school board. Then the budget is advertised for public review. A public hearing is held to address any questions or concerns of the public. Upon approval of the local school board, the budget is submitted to the Department of Local Government Finance for final approval.
Six Main Funds:
1. General Fund – used to budget and account for all receipts and expenditures for the basic operation and the programs of the school corporation. Expenditures from this fund may be made for items associated with the daily operation of a school corporation. This includes expenses for salaries of teachers, administrators, support staff, fringe benefits, supplies, heat, lights, maintenance and other day-to-day operation expenses.
2. Debt Service Fund – used to budget and account for receipts and expenditures necessary to meet the annual debt obligations of the school corporation. Expenditures from this fund may be used to make bond and/or lease rental payments and state technology and construction loans. Interest on loans taken for the purpose of any other fund can be paid from the debt service fund. For taxation purposes this fund is only used when there is a need to retire debt. The tax rate must be sufficient to raise the amount necessary to meet the debt obligations during the year.
3. Pension/Severance Debt Fund – used to budget and account for receipts and expenditures necessary to meet the annual debt obligations for the pension/severance for the local school corporation.
4. Capital Projects Fund – A school corporation must annually prepare a three year CPF Plan, conduct a public hearing, publish notice of adoption, and allow taxpayers the right to file a petition objecting to the Plan. The first year of the Plan becomes a part of the annual budget. The CPF can be used for land acquisition and development, fees for professional services, educational specification development, building acquisition, construction, and improvement, rental of buildings and equipment, purchase of mobile or fixed equipment, certain emergencies, maintenance of equipment, construction, repair, replacement, remodeling or maintenance of a school sports facility as long as the expenditure does not exceed 5% of the property tax levy, certain staff services, allocating funds for future projects, and transferring funds to the Repair and Replacement Fund.
5. School Transportation Fund – exclusive fund for the payment of operating costs associated with the transportation program. Operating costs attributable to the school transportation fund are the salaries of drivers, the transportation supervisor, mechanics and garage employees, clerks and other transportation related employees. It will also pay for the cost of contracted transportation services, transportation related insurance, fuel, lubricants, tires, repairs, contracted repairs, parts, supplies, and other transportation related expenses.
6. School Bus Replacement Fund – exclusive fund to pay for the replacement of school buses, either through a purchase agreement or under a lease agreement. A ten (10) year plan must be submitted and approved for the purchase and replacement of school buses.