School Finance in Indiana

School funding in Indiana can feel complicated, but here’s a simple way to think about it: money comes into schools from different places, and by law it has to be kept in separate “buckets.” Each bucket can only be used for certain things. That’s why you might hear that a district has money to buy new buses or update a building, but still may struggle to pay teachers more or add staff—it depends on which bucket the money is in.

Where the Money Comes From

Federal Grants: These are special dollars for things like school lunches, special education, or extra help for students from low-income families.

State Funding: This is the biggest piece and pays for most classroom instruction. It’s based mainly on the number of students enrolled.

Local Property Taxes: Approved by the community, these funds help keep schools running, maintain buildings, and sometimes (if a referendum passes) help pay teachers and staff.

The Buckets of School Finance

Here’s what each “bucket” pays for:

Education Fund – Teacher salaries, benefits, and classroom learning costs.

Operations Fund – Transportation, utilities, building maintenance, and daily operations.

Debt Service Fund – Loan payments for building projects and renovations.

Exempt Debt Fund – Certain older debt payments not limited by property tax caps. Decatur Township does not have an "Exempt Debt Fund."

Referendum Fund – Extra funds approved by local voters that can be used for specific purposes like safety, staffing, or instruction.

Why Buckets Matter

Because money has to stay in its assigned bucket, schools can’t just move funds around. That means even if there’s money available for new buses or building upgrades, it can’t be shifted into the teacher pay bucket.

Understanding how these buckets work helps explain why school budgets sometimes feel confusing. It also shows why community support—like voting for school referendums—can make such a big difference for students and teachers.