Board Meeting September 2025

2026 Budget, Capital Projects, and Bus Replacement Hearing

Chief Financial Officer Regina May presented the 2026 budget, capital projects plan, and bus replacement plan. This hearing marked the second step in the budget adoption process, following the August 11 advertisement of budget forms.

Mrs. May noted that the proposed budget totals $155 million, with the three most active funds representing about 65 percent of expenditures. The process is based on assumptions and subject to adjustments once the Department of Local Government Finance (DLGF) finalizes approval by December 31. Internal adjustments will then be made to create a working budget that accounts for emergencies and anticipated shortfalls.

Revenue Sources

• State Funding
  Composed of mainly two parts;  The Basic Grant, providing about 87 percent of revenue, and categorical grants providing the remaining 13% supporting career and technical education, special education, and academic performance.
  
• Local Property Taxes
  Fund the Operations Fund, Debt Service Fund, and Voter-Approved Referendum funds.
  
• Other Sources
  Interfund transfers, Earned Income, and the Rainy Day Fund balance.

Education Fund

The Education Fund is supported almost entirely by state aid. For 2026, ZCS will receive $6,967 per student for the Foundation amount, an increase of $286 over 2025. A complexity factor of $4,001 per qualifying student in poverty is also applied.  For ZCS, our complexity amount equates to $59.21 per student.  The two factors together bring our total for the Basic Grant to $7,026.21 per student.  This equates to approximately $54.3 million in revenue based on enrollment. While enrollment is slowing down at the moment, overall, enrollment has increased by more than 1,500 students in the last decade, a 25 percent growth rate.

ZCS remains the lowest funded district on a per pupil basis in Indiana, receiving $530 less than the state average of $7,557.17. This gap translates to more than $4.1 million less funding compared to the state average and underscores the importance of the voter-approved Operating Referendum.

Expenditures in the Education and Operating Referendum Funds are focused on primarily on salaries and benefits. About 90 percent of combined expenditures are dedicated to teacher and instructional staff compensation. The Operating Referendum supports one in three teachers, or about 165 positions, including STEM and literacy coaches, arts and wellness teachers, counselors, psychologists, speech pathologists, ENL teachers, kindergarten teachers, and specialists across grade levels.

Operations Fund

Supported mainly by property tax revenue, transfers, and earned income, the Operations Fund covers HR, business services, payroll, operational technology, maintenance, transportation, and utilities. Compensation for support staff in these categories is the largest expense. Revenue growth in this fund is limited to 4% by state legislation, regardless of community growth.  This fund is also largely impacted by Property Tax Caps, and now the Homeowners Credit.  The district has lost $30.7 million to property tax caps since 2010, with another $3.1 million projected to be lost in 2026.

Debt and Capital Funds

Debt Service and Capital Referendum Funds are supported by property taxes. All debt is capital in nature, focused on facilities and ensuring that our learning environments are conducive to educating our students.

Capital Projects Plan and the Bus Replacement Plan

The Capital Projects Plan outlines a three-year guide for purchases over $10,000, while the Bus Replacement Plan projects a five-year cycle with the goal of maintaining an average fleet age under 12 years. Both plans are guiding documents and do not indicate final board approval or funding for the items identified.  Plans are posted on the ZCS website.

Board Discussion

Board members discussed the challenges of uncertain assessed values, revenue losses from homeowner tax credits, levy growth limits, and the inability to appeal operations funding further. Clarifications were made that local income tax does not benefit schools directly. The Rainy Day Fund can only use existing balances, with additional appropriations requiring board action.

No public comment was offered. The hearing was adjourned.