Local school officials are learning more about the upcoming change in the school funding structure. Under a new law set to take effect in 2019, Indiana school districts’ General Fund will be replaced by an Education Fund, supported by the state. The Capital Projects, Transportation, and Bus Replacement funds will be combined into an Operations Fund, supported by tax revenues in the school district.
A big change, according to Knox Schools Superintendent Dr. William Reichhart, will be the ability to transfer money between the two new funds. “So it’s going to help some school districts, especially those who have high assessed values of farm ground because they’re going to be able to take that money that they’re getting in property taxes and support their Educational Fund out of it,” he told the school board last week. “Now, it’ll be interesting to see how long the state allows that to happen. I’ve got my thinking that there’s probably going to be some rules about that in the future. But it can help some school districts and it could help us.”
At the same time, Reichhart says the new Education Fund will be more restrictive than the General Fund it replaces. He says the Education Fund will only be able to be used to pay teachers and support staff, not administrators and secretaries. “They want to try and track money going to strictly following the child, and they don’t consider money spent on central office administrators and this whole Category 3 and 4 expenses as part of going to the classroom.”
That means school corporations are going to have to transfer money from their Education to Operations funds to cover those salaries. Corporation Treasurer Dawn Bailey said that most school corporations in the state plan to transfer 15 percent of their Education Fund into Operations.
She and Reichhart recently had the chance to learn more about the budgeting changes during the Indiana Association of School Business Officials’ annual conference. Bailey explained that as part of this year’s budgeting process, the school board will have to pass a resolution creating the two new funds. Then in January, another resolution will have to be approved to put the money into them.
More details will be shared with the school board as the budgeting process approaches.
