School Finance 101

We take our responsibility as stewards of taxpayer dollars seriously and are committed to open, transparent financial practices. Our School Finance 101 page provides an overview of DCSC’s finances and explains how Indiana schools are funded.

School finance follows a set of legal guidelines and funding rules that make it different from household or business budgeting. Because of these requirements, financial practices that work in other settings may not apply to how school districts manage their funds.

Key points:

• School funding is divided into 4 main "buckets" or funds (education, operations, debt service, and rainy day). Each fund can only be used for certain expenses, and each gets money from different sources.
• A good chunk of school finances comes from local taxes. Your total tax rate is made up of multiple overlapping taxing units, such as the county, township, town, library, fire territory, and the school corporation. Each unit sets its own rate, and together they form the total you see on your bill. That’s why tax rates can vary depending on where you live.
• Recent legislative changes—specifically Indiana’s Senate Enrolled Act 1—have adjusted how property taxes are calculated. While the goal of the legislation was to provide property tax relief, it also reduced net assessed values. When assessed values decrease, the revenue available to local governments, including schools, decreases as well. Therefore, sometimes tax rates need to increase in order to repay existing bond obligations held by the taxing units. 
• The Master Campus Plan was approved in mid-2022 and funded at the existing debt service levy using the laws and funding formulas in place at that time. Since then, changes in state law—most notably Senate Bill 1—reduced property NAV, meaning the same levy must now be collected from a smaller tax base, which can result in a higher tax rate even though the total debt service amount has not changed. This has caused the district to take strategic actions to balance our budget while maintaining instruction and operations. 
• Our construction project has not changed. The projects, timelines, and total bond repayment amounts remain exactly as approved by the community and the school board. The continuation of the project will not negatively impact how we balance our budget in the years to come.
• Construction funding is separate from our Operations budget and can only be used to repay debt for building projects. These updates were necessary to address aging facilities, accommodate district growth, and create safer, more modern learning environments for students.
• DCSC remains committed to transparency, focused on fiscal responsibility, and dedicated to protecting student learning.

Be sure to explore the graphics, videos, and information below for a closer look at each of these key points! 

The Four "Buckets" of School Finance

By law, school funding is divided into over 60 separate, purpose-specific categories or "buckets." Each bucket can only be used for certain expenses. That’s why a district may have funding available for things like buses or building improvements, but not have the flexibility to use those same dollars to increase staff salaries. Below is a graphic that explains the 4 main buckets in greater detail.

What this means:

• The Education Fund covers teacher salaries and basic classroom materials. When tuition support dwindles, cuts are made in the classroom. That is what leads to less educational material, unfilled teaching positions. etc.
• The Debt Service Fund covers bonds and long-term loans for major construction projects, renovations, and large capital improvements. These funds can only be used to pay off community- or board-approved debt tied to facilities, not for classroom operations or salaries.
• The Operations Fund covers our utility bills, insurance costs, staff pay and benefits for classified staff (not teachers), and other miscellaneous expenses. This fund comes from local taxes, so when we receive a smaller portion of local taxes, cuts are made to our daily operations. This is what leads to staff cuts, hiring freezes, or lack of pay raises across departments such as transportation, custodial, safety, etc. 
• The Rainy Day Fund is set aside for emergencies. Using it for ongoing expenses would create long-term financial instability once those one-time dollars are gone, and it could put us in an extremely tight spot in the event of an emergency. 

School Finance Video Series #1

The six videos below are part of our first finance video series and are designed to give a clear overview of school finances.

A Closer Look at Local Taxes

Each area is served by multiple taxing units, and each of those units has its own tax rate. Your total property tax rate is the combination of those different rates layered together, which means it can vary depending on where you live. For example, a tax bill in Marion Township may look different from one in Center Township or within the Town of Danville because the overlapping taxing units and services are different.

Here is an example of how a taxing area has multiple-layered taxing units based on location and services provided:

Each of these entities sets its own tax rate. Together, those rates combine to form the total tax rate shown on your bill. No single unit operates in isolation—each one represents a piece of the overall picture, like slices of a pie.

So when you hear that tax rates differ from one part of the district to another, this is why. It’s not just about schools; it’s about the combination of services provided where you live and how those services are funded.

To summarize:

• Your property tax bill is made up of tax rates from multiple taxing units
• Those units vary depending on your location and the services provided
• Each taxing unit sets its own individual tax rate
• It is the sum of these rates that comprises the total tax rate for your property

School Finance Video Series #2

The six videos below are part of our second finance video series and are designed to give a closer look at how state-level changes can impact local taxes, and, in turn, local government funding...including schools and their funding "buckets."

Balancing Levy (In Terms of our Master Campus Plan)

When net assessed value (NAV) goes up, the tax rate goes down, but the total levy does not change. Likewise, when NAV goes down, the tax rate goes up, but the total levy does not change. 

The Master Campus Plan Project, which is currently underway, was approved in mid-2022. At that time, it was planned and approved at the existing debt service levy, using the laws and funding formulas in place then. Since 2022, however, the legislature has made changes, most notably through Senate Bill 1, that have altered the methodology used to calculate NAV.

Because Senate Bill 1 reduced the  NAV across properties, the same levy amount now has to be raised from a smaller tax base. As a result, the tax rate may increase, even though the total levy to repay the bonds has not changed. In other words, the district is not collecting more for debt service; the calculation has simply adjusted due to changes in state law.

It’s important to be clear about this point: our plan has not changed. The projects, timelines, and total bond repayment amounts remain exactly as approved by the community and the school board.

Doing More With Less

As you have read above, due to recent state funding changes under Senate Bill 1, our district is being asked to do more with less.

We have already reduced nearly all secondary expenses, including consulting, transfers to the Rainy Day Fund, and other non-essential operational supports. Only about $300,000 was available to responsibly cut without impacting core services.

What remains are essential costs:

• Utilities

• Insurance

• Transportation

• Technology infrastructure

• Maintenance and custodial staffing

• Facilities operations

At the same time, our district continues to grow — meaning more buildings to maintain, more buses to run, and more students to serve.

We have taken additional steps, including staffing reductions through attrition, delayed hiring, and increased support from the Education Fund. However, as revenue tightens and operational needs rise, future decisions may require further adjustments.

The most significant financial impact will begin in 2026 and continue beyond.

At this point, the conversation is no longer about cutting extras — it’s about sustaining the essential services that keep our schools safe, operational, and ready to support student success.

DCSC's Master Campus Plan

As a reminder, construction funding is separate from our Operations budget. Projects are funded through bond issuances and repaid from the Debt Service Fund, which, by law, can be used only for construction-related debt. These dollars cannot be used for operational costs like staffing, utilities, or transportation.

So why was construction necessary?

Many of our facilities required major updates, and our district has experienced significant student growth. Expanding and improving our buildings ensures we have safe, modern spaces that support the programs and opportunities our students deserve.

Some upgrades — like energy-efficient heating, lighting, and infrastructure — will also help reduce operational costs over time.

However, larger buildings do mean more space to heat, clean, maintain, and financially support. This does create challenges in other areas, which brings us back to doing less with more.

Yes, there are financial pressures we are navigating. But we are also building facilities that match the excellence of our students and staff. We are investing in safe, modern, efficient learning environments. And we are preparing our district not just for today’s students, but for the next generation.

Call to Action

Our Warriors’ voices matter! Legislators are eager to hear from their constituents, and input from the people they serve—particularly those who will be voting in the future—can truly influence the decisions they make. 

How to find your legislators: https://iga.in.gov/information/find-legislators  

Senator Brett Clark – District 24 
200 W. Washington St.
Indianapolis, IN 46204
800-382-9467 
Email: S24@iga.in.gov 

Representative Jeff Thompson – District 28 
200 W. Washington St.
Indianapolis, IN 46204
317-232-9651 
Email: H28@iga.in.gov