Public school financing and budgeting is a unique process.

School finance is governed by a number of state laws and overseen within the district by the superintendent, the assistant superintendent, the district treasurer and the board of school trustees.

We are overseen outside the district by the State Board of Accounts, the Indiana Department of Local Government Finance and the Indiana Department of Education.

Many laws passed by the Indiana General Assembly and signed by the governor affect how we do business, and there is obviously a great deal of scrutiny given to the processes of public school finance.

Revenue funding or income is divided into different funds designated for different purposes of operation within the scope of the school district’s duties to our students and our staff.

The revenue for these funds comes from taxes at both the state level and at the local level.

A public school’s largest fund is called the general fund. Revenue for the general fund is controlled entirely by the state and is a function primarily of the numbers of our student enrollment.

Much has been discussed about general fund revenue, and the members of the General Assembly and the governor have said a lot about “having the state money follow the students.”

From our perspective, this really translates to underfunding for many rural schools and moving money to private schools through the voucher program.

The entire state initiative of supporting voucher scholarships for private and charter school students under the title of “school choice for parents” is actually a “bait and switch” for the agenda to privatize public education, by taking tax revenues and providing those to parents who choose to pay tuition to send their students to private schools, religious schools and charters who carefully screen the students whom they will accept.

The “school choice” movement is actually an effort to segregate students by economic class throughout our nation. Rural county school districts, such as ours, who are facing declining enrollments for a variety of reasons, are left with the option of significantly reducing educational opportunities for our students.

We are also left with a choice to make in lieu of significant program and staffing reductions by asking our taxpayers to support a referendum.

If approved, a referendum can bring additional property tax revenue to the general fund and preclude major cutbacks within a public school corporation.

At a time when the state can clearly afford to increase its revenue support of school districts such as ours, we are forced to seek such additional taxation from our community. In my opinion, this is poor fiscal policy and a clear case of the General Assembly not fulfilling its responsibility to fund public education adequately for the students of Indiana.

General funds in public schools are the largest of education expenditures. This fund pays for salaries, wages and benefits for teachers, administrators and other support staff persons.

Of our $13.5 million in general fund expenditures annually, nearly 95 percent of our total revenue goes into salaries, wages and benefits of our staff. The remainder funds operating expenses such as insurance, utilities and other operational expenses.

Rural, countywide districts such as ours which operate smaller-populated schools are financially challenged because multiple buildings cost more to operate than single large schools with more students.

In Brown County, we believe that education delivered to smaller populations is superior to large-enrollment schools. But the state funding formula fails to recognize the need to have multiple schools in lesser-populated areas and does not recognize the importance of smaller-enrollment schools and smaller student-to-teacher ratios.

The debt service fund, the capital projects fund, the transportation fund and the bus replacement fund are all currently financed with revenue from local property taxes and cannot be used to support general fund expenditures.

Debt service funds pay for outstanding bonds, lease rental agreements and other overall debt which the school district incurs over the building and maintaining of our schools and properties.

Wealthy districts are able to build new schools as they are needed with the revenue from property taxes. Upgrading schools, modernizing classrooms, expanding existing facilities and funding property needs are all paid for from this fund.

For this reason, a school district can upgrade its buildings — as we have recently done with science labs and tech lab renovations — but still be short of funding for general fund costs such as salaries, not to mention having an ability to sustain ongoing salary expenses.

This aspect of school finance is certainly confusing to the community because it would appear that if the district can afford to do renovations, they should be able to fund salary and other federal fund needs.

In reality, the major expenses of the district are related to these salaries, wages and benefits.

Because revenue for the general fund comes totally from the formula established by the General Assembly and the governor, they completely control the revenue which comes to the district through policy and law.

Most of our Indiana rural districts are currently underfunded and facing the need to either do reductions in staffing and programs or seek additional support through the referendum process.

While I believe that this responsibility is the obligation of the state, the referendum process is a safety net technique which we can use to provide the kind of school setting and staffing to support the needs of our students.

I would urge you to contact Dr. Dennis Goldberg or me at 812-988-6601 if you have further questions about school finance or the referendum process.