There are three main accounts school districts take money from: General, Building and Sinking Funds.
Accounts like child nutrition and school activities are more limited in scope and ways they can receive revenue. Each district’s main operating dollars comes from their General Revenue Fund, which receives revenue from state-dedicated sources, appropriations the legislature approves annually and local tax revenue. When the public hears news stories on public school funding increases and decreases, General Revenue Fund appropriations are most likely what is being discussed. This fund pays for general day-to-day operations like teacher salaries.
School districts also have a Building Fund, which consists entirely of local tax revenue from. This money is used for facilities, maintenance and tangible items like furniture and technology. Local voters approve the rate at which real property (e.g., houses, commercial buildings and equipment) is taxed--up to a certain amount.
The Sinking Fund, the focus of the map below, also receives local tax dollars upon voter approval. The fund’s purpose is to pay the district’s voted debts for capital improvements. This includes payments on voter-approved bonds for large-scale projects. The amount of bonds a district can seek is capped at 10% of the total valuation of the real property located in a district. The fund can also be used to pay for other district debts like those imposed by a court through a judgment.
When the State Department of Education calculates the amount of State Aid to make available to each district, they start with a base factor(in dollars) multiplied by the weighted student count. The weighted student count allows extra dollars beyond the base amount to flow in for students with varied needs. Students are weighted by grade level and level of additional services needed to provide a free and appropriate public education. The amount of money a school district receives from local and county sources is subtracted from this calculation. Only ¾ of the local dollars are subtracted from the state formula, meaning some districts have much more money “in the bank” than others despite receiving similar amounts from the state. A district’s Building and Sinking Funds are not part of the State Aid formula. However, their values do carry over from each year and don’t decrease the amount of State Aid a district receives. The formula doesn’t use the fund totals in the calculation; it only uses the amount that can be raised if voters approve.
The disparity in Sinking Fund revenues can make or break district finances. A district must pay its debts even if it means taking money from other funds to do so. Looking into an individual district’s Sinking Funds gives a picture of how much local revenue a district can access.