(This week’s civic education and engagement column from Danville’s The Republican newspaper.)
Anytime I’m talking to Hoosiers and happen to mention the fact that property tax dollars aren’t used to pay teacher salaries, their reaction is best described as stunned. There was a time when local property taxes were the primary source of classroom funding, but that time is long past. (Disclaimer: if your district has approved a General Fund referendum – not any other type of referendum – some property tax dollars can be used to pay teachers.)
School funding in Indiana is always a bit confusing … and it gets even fuzzier after every General Assembly session. Put in simple terms, it divides funding for school districts into two buckets: one for education and one for operations.
As you’d expect, the education bucket covers most of what goes on in a classroom; most important, funding the compensation of the professional educators and the paraprofessionals who support the instruction they deliver. The operations bucket keeps the lights on, fuels the buses, and pays everyone who’s not a teacher or licensed administrator. That’s oversimplified, and there are a lot of complications involved. For example, given that a superintendent is expected to be both the district’s educational leader and the CEO of its “business,” which bucket should cover their salary? The General Assembly has made some obvious choices and some questionable ones, but school districts and the boards that oversee them have to do whatever the legislators decided.
With some exceptions, what you pay in property taxes goes into that operating bucket – which is better known as the Operations Fund – as well for paying the school district’s mortgages through what’s known as the Debt Service Fund. And with a few exceptions, funding for one fund can’t be moved to another, so if your district spends less on buses, they can’t use the savings to pay teachers.
Money for the Education Fund, the name for the classroom bucket, comes primarily from what you pay through Indiana’s income and sales taxes. The General Assembly identifies the total amount it wants to allocate to Indiana’s public schools, then divides it by the number of students in the state. That creates a per-student amount, which is then adjusted to reflect local levels of poverty and other “complexities.” All six of Hendricks County’s districts achieve remarkable performance while receiving some of the state’s lowest funding per student. (Still, it’s far more equitable than the previous system, in which some districts near Lake Michigan collected more than twice as much money per student as your community.)
Classroom funding is based on enrollment. That per-student amount is multiplied by the number of students enrolled (based on two “count” days each year). The district receives one-twelfth of the total amount every month. Important point: snow days have zero – and I mean zero – effect on classroom funding. The next time your annoying neighbor starts that “they don’t take snow days because they care more about their damned money” nonsense, please hurl a well-packed snowball their way.
The efforts to dismantle the federal Education Department led many Hoosiers to wonder just how much federal money flows into classrooms. The Indiana Capital Chronicle recently reported that the state’s public schools received $2 billion in federal funding during the 2021-22 school year. That’s about $1,963 per student, or one-eighth of total funding. Most federal funding is for programs to specifically support the students with the greatest educational needs: those who are considered at-risk because of financial or family considerations and those with disabilities.
(If you find all this fascinating and want to know much, much more, visit the Indiana Department of Education’s website and download a copy of the biannual Digest of School Finance. If you enjoy getting into the proverbial weeds, you’ll thank me.)