Indiana public schools face new power over their own finances

But the fact was the money was in separate pots and couldn't be mixed. The district had the money for the tablet computers in its general fund but faced a significant shortfall in its transportation fund because of state-mandated property tax caps.

Under a new law passed by legislators in April, that scenario could play out very differently in the future. Lawmakers gave school financial systems a reboot that will allow local school boards to transfer money to match their priorities.

“I think a lot of people like the long-term flexibility. But with that change, it requires more responsibility on the individual districts,” said Kirby Stahly, chief financial officer at EACS.

Right now, transportation, capital projects and school bus replacement are three defined property tax funds for school districts. In addition, the state provides money for the general fund, which is used to pay teachers and otherwise run schools.

Under House Bill 1009, which was signed into law by Gov. Eric Holcomb, districts will have an Education Fund and an Operations Fund. Local school boards will decide what is spent where.

Property tax money designated to repay debts will remain separate, and all transfers between the Education and Operations funds must be posted and made official in a public board meeting.

The measure doesn't take effect until Jan. 1, 2019, giving schools a chance to prepare for the changes.