Understanding How Referendum Funds Would Be Used
Operating Referendum
School funding is complex, and it is understandable that residents have questions about how the different funds work together. As information about the referendum is shared throughout the community, the district wants to help ensure residents have accurate information and enough context to understand the proposed spending plan.
Understanding Where the Funding Comes From
The revenue spending plan associated with the ballot question shows several categories in which referendum revenue could be spent. At the referendum meetings, Dr. Smith has explained the impact the Operations Fund will face from the property tax relief and potential charter school revenue sharing included in SEA 1. She has also explained rising costs for utilities, fuel, insurance, and other expenses. Shakamak’s net assessed value is very low, and its Operations Fund is also affected by property tax circuit breaker losses.
Understanding these challenges requires some background on how Indiana’s school funding structure has changed. The property tax reforms adopted in 2008 shifted funding for school General Funds to the state beginning in 2009 and established property tax caps that limited local property tax collections. Local voters could authorize additional school funding through a referendum.
From 2009 through 2025, Shakamak used shared services, purchasing cooperatives, energy efficiencies, participation in an insurance pool, and other operational efficiencies to manage expenses. These efforts are part of the district’s approach to working within available resources.
Another change occurred in 2019, when the state reorganized school funds and changed which expenses could be paid from each. The General Fund became the Education Fund, while the Capital Projects, Bus Replacement, and Transportation funds merged into the Operations Fund.
There has been confusion surrounding state funding per student and operations funding provided through property taxes. State funding per student has increased. Along with that additional revenue came requirements for increased minimum teacher salaries, salary funding floors, and the percentage of that revenue spent on teacher salaries and benefits. All of these expenses are paid from the Education Fund.
Each budget year, 15% of Education Fund revenue, not the Education Fund balance, can be transferred to the Operations Fund to help offset expenses that used to be paid from the Education Fund.
This history helps explain why changes in state funding per student and changes in property tax funding affect different parts of the district’s budget, as well as how the Education and Operations funds work together.
Understanding the Spending Plan
The referendum revenue spending plan lists the categories in which referendum funding could be used for budget year 2027. If the referendum passes, the spending plan will be approved each year during the budget process.
The maximum rate and revenue shown on the ballot are $0.25 per $100 of assessed value and $499,000 in annual revenue. The budget submitted to the state for 2027 includes a rate of $0.18 per $100 of assessed value and $391,137 in revenue.
The submitted 2027 rate and revenue appear on the Form 3 Notice to Taxpayers, which has been available on the district website and Indiana Gateway since September as part of the normal budget process. The submitted rate does not change the maximum rate voters would authorize through the ballot question.
The rate and revenue are set each year during the fall budget process and then certified by the state, typically in early December.
The purpose of the revenue spending plan is to include several categories to plan for the upcoming budget year. Daily educational operations, recruiting and retaining teachers and staff, safety, maintaining class sizes, and academic programs and opportunities are the broad categories listed.
Within these categories, expenses could include:
Salary and benefits for an additional teacher to maintain smaller class sizes in the lower elementary grades.
Portions of salaries to recruit and retain teachers.
The portion of the school resource officer’s salary and benefits not covered by the safety grant.
Technology expenses related to student Chromebooks for normal daily use, as well as maintaining e-learning capabilities during weather events, floods, water supply issues, and other disruptions.
Fuel for buses on regular daily routes and for academic activities.
Salaries of hourly staff currently paid from the Operations Fund, including bus drivers, custodians, and maintenance staff.
How These Expenses Connect to the Operations Fund
If the referendum passes, expenses shifted from the Operations Fund to the referendum fund would no longer be paid from the Operations Fund. Those Operations Fund dollars would then remain available for utilities, insurance, transportation, and building maintenance, including rising costs in those areas.
Whether an expense listed in the spending plan would typically be paid from the Operations Fund or the Education Fund, the connection is the same: paying that expense from referendum revenue would affect the dollars available in the Operations Fund, either directly or through the Education Fund transfer.
Residents can review the Form 3 Notice to Taxpayers on the district website and Indiana Gateway alongside this explanation. These documents show how the proposed referendum revenue fits into the district’s annual budget planning.