Why TCSC is Considering an Operating Referendum

Declining Enrollment
Tipton Community School Corporation has experienced a gradual decline in student enrollment over the past decade. Because Indiana funds schools primarily on a per student basis, fewer students mean fewer state dollars. Even small enrollment shifts can create significant budget pressure, especially for rural districts where fixed costs remain the same regardless of student count.

SEA 1 and Property Tax Revenue Impact
Senate Enrolled Act 1 (2024) changed how property taxes are distributed in Indiana. For TCSC, SEA 1 has resulted in:

• Reduced Operations Fund revenue
• Less local property tax support for transportation, maintenance, and utilities
• A widening gap between rising costs and available operating dollars

This reduction is ongoing and structural — meaning it affects the district every year moving forward.

Inflation and Rising Operating Costs
Like all school districts, TCSC faces higher costs for:

• Fuel and transportation
• Utilities
• Insurance
• Technology infrastructure
• Building maintenance

These increases outpace the revenue growth the district receives from the state and local sources.

State Funding Limitations
Indiana’s school funding formula provides the same base per student amount to every district, regardless of local needs or rising operating costs. Additionally:

• Education Fund dollars can only be used for instructional expenses
• Operations Fund dollars can only be used for non-instructional expenses
• Debt Service dollars can only be used for construction and capital projects

This means TCSC cannot move money between funds to solve operating shortfalls, even when needs arise.

Reductions Already Made

To remain fiscally responsible, TCSC has already implemented multiple cost saving measures, including:

• Staffing reductions through attrition
• Shared positions across buildings
• Cuts to non-essential spending
• Delayed purchases and deferred maintenance
• Careful review of all programs and services
• Transportation efficiencies
• Long term cost reduction planning through the Expense Reduction and Review Committee

These reductions have helped stabilize the budget temporarily, but they cannot fully offset the long term revenue loss.

Remaining Financial Gap
Even after reductions, TCSC continues to face a structural operating gap caused by:

• Declining enrollment
• SEA 1 revenue loss
• Rising costs
• State funding limitations

This gap affects the district’s ability to maintain:

• Class sizes
• Student programs
• Transportation services
• Safety and support staff
• Academic and extracurricular opportunities
• Competitive salaries to retain staff

An operating referendum is one tool available under Indiana law that allows communities to decide whether to provide additional local support for school operations.