The Gary Community School Corporation recently adopted its budget for 2024, totaling around $74 million — a slight increase from 2023’s $71.5 million budget. Next year’s budget was approved in October by the Distressed Unit Appeals Board and Mike Raisor, the district’s emergency manager, and now awaits finalization from the state.
Financial struggles were the main reason the state seized control of the predominantly Black school district six years ago. Today, despite reporting improvements and consistent surpluses for the past two years, administrators still outline challenges. Residents have questioned the district’s financial decisions and wondered how money is distributed and spent, especially in the wake of proposed school closures. In response to these ongoing concerns, Capital B Gary analyzed GCSC’s budget for the upcoming year.
Education Fund: $32.5 Million
The budget designates its largest share of funds to classroom expenses and student learning. Over half of it will go toward teacher and staff salaries, while the rest is allocated for miscellaneous expenses and transfers to both the school improvement and operations funds.
Where does the money come from? The short answer: mostly state grants. Cash is distributed to school districts based on criteria like enrollment, attendance, and the number of students who fall under specific categories, such as those who receive honor diplomas or have special needs.
Other than grants, some money from the district’s debt service fund and a tax passed by residents in a 2020 referendum is also funneled into the pot.
Operations Fund: $19.5 Million
The second-largest allocation of funds are reserved for anything that falls outside of the classroom. This includes transportation, insurance, utility bills, and other services needed to keep the district running.
For next year, GCSC has budgeted almost 30% of the fund to pay some staff salaries and wages from 2023.
Where does the money come from? In some districts, property taxes account for most of this fund. In Gary, a circuit breaker, or a cap on property taxes, reduces a lot of this potential revenue, so a majority of the money for operating expenses stems from the 2020 tax referendum. Some money is also transferred out of the education fund to help with the district’s projected $2 million operating deficit.
Operations Referendum: $10.2 Million
After it was passed, the 2020 tax referendum brought millions of dollars to the school corporation. At the time, some of the money was used to provide district teachers a 5% raise — their first in over a decade. Next year, the money collected from taxpayers will help support a considerable share of the district’s operations fund as well as a bit of its education fund.
Debt Service Fund: $12.2 Million
The GCSC plan to split the money from this fund three ways. One portion will go toward debt, bond, and interest payments. Another portion will be used to pay off loans from the state’s Common School Fund, which helps districts make various advancements at their schools. The last portion is siphoned into a school improvement fund, which was established by state law in 2020.
Under HB 1065, some CSF payments are suspended until 2025, allowing these funds to be used instead for school infrastructure improvements. The school district has earmarked $5.4 million for repairs, renovations, and demolitions next year, according to a GCSC budget presentation.
Where does the money come from? A debt service property tax that residents pay finances almost all of this fund, while a small amount comes from other taxes.