All four Allen County school districts met the new benchmark meant to encourage schools to spend more state funding on classroom expenditures – and Fort Wayne Community Schools did so with the biggest margin.
State lawmakers set a goal of districts keeping 85% of state dollars in the education fund, or the classroom, after a new school budget structure took effect in 2019.
Kirby Stahly, assistant superintendent of administrative services for East Allen County Schools, explained why the new setup has prompted a need for budget transfers at many districts:
Districts now have two funds – the education fund and the operations fund. Previous budgeting buckets – general, capital projects, transportation and bus replacement funds – were eliminated.
Before 2019, specific operational costs were paid out of general fund, which received all the state tuition support. Now, operational costs are paid out of the operations funds, but the total state tuition dollars go to the education fund while local property tax dollars go to the operations fund.
Because the funds changed but the revenues did not, most Indiana districts in 2020 transferred dollars from their education fund to their operations fund to help pay for operational costs, which previously paid out of general fund and not funded by local property taxes. Examples include the superintendent, the business office and human resources.
“That's what our transfer is for,” Stahly said.
Lawmakers' goal that districts transfer no more than 15% of their education fund to operations hasn't changed spending behavior at EACS, Stahly said. Rather, he said, it's another consideration during the budget process.
Information provided by the state shows Northwest Allen County Schools transferred 10.5% of funding to operations; Southwest Allen County Schools transferred 11.1%; and EACS transferred 11.9%.
FWCS – the state's largest district with almost 30,000 students – transferred 7.5%.
A similar percentage is expected this year. FWCS last month approved a transfer of up to $15 million from education to operations, representing 7.1% of budgeted education fund revenue. Half was to be transferred by Wednesday, and the balance as needed by Dec. 31.
FWCS' transfer would be less if it weren't for the roughly $6 million lost through tax caps, Chief Financial Officer Kathy Friend said.
Urban districts like FWCS are generally more affected by the caps because they serve areas with more taxing units, Friend said. Taxing units in FWCS include the city, the county, the airport, the library, the bus system and townships.
Other factors that could influence a district's transfer percentage include changes to state tuition funding and enrollment, said Mark Snyder, business manager at Southwest Allen County Schools.
Theoretically, Snyder said, districts also could put operation fund expenditures in a referendum, reducing the need to transfer as much from the education fund.
“Right now, our Referendum Fund only covers salary and benefits for teachers/counselors (for the most part),” Snyder said by email. “I could put bus driver salaries, for example, in the referendum fund when we go to renew if there was a need. Placing certain things in a referendum when it goes to the vote can make easier or harder to get passed.”