BUDGET 101: An Information Guide to School Funding
Levies, bonds and the ever dwindling State education budget are hard to track even for those who follow it closely. When false or misleading information gets out into the public it only complicates the situation and people are left feeling confused and overwhelmed.
The story of the decade in Pasco has been growth. As more and more houses have sprung up across our community, the number of students in our district has more than doubled in the past decade. Each school day nearly 17,000 students attend Pasco schools. Providing those students with a sound education requires a workforce of over 2,200 people and an operating budget of almost $178 million.
The total cost of operating a school district is managed from five separate accounting funds. Each can only be used for specific purposes. They are:
- Capital Projects Fund – Pays for the construction or renovation of school facilities and the purchase of long-lived equipment, an example being HVAC units. These funds are secured through bonds, which are approved by voters to pay for these capital projects, state matching dollars, and impact fees. Local tax dollars pay the bonds, much like a mortgage on your home.
- Debt Service Fund – The sole purpose of this fund is to make payments in secured school construction bonds. The debt service revenue is generated through local taxes.
- Associated Student Body Fund – Pays for student social activities and clubs.
- Transportation Vehicle Fund – Pays for the purchase of new school buses.
- General Fund – The largest of the school district’s accounting funds pays for everything not covered by the other funds. Almost all salaries and benefits are paid from the General Fund, as is the cost of textbooks, classroom supplies, the electricity, insurance, school sports teams, art and music, diesel fuel for buses and copy machines. Nearly 20 percent of this fund is generated through local levy dollars.
For the most part, the money within one fund can’t be used to pay for the expenses of another fund. A school district can’t use money in the Associated Student Body Fund to repair a leaking roof, for example, or use the money in the Capital Projects Fund to pay for teacher salaries.
The General Fund:
The Pasco School District’s General Fund budget for the 2014-15 school year is almost $178 million. There are three different ways to look at how that money is being spent:
- How the money is allocated to objects, the item or service that is being purchased, including employee salaries and benefits, and supplies and materials.
- How that money is allocated to overall activities, such as teaching, administrative and support functions.
- How that money is allocated to programs, major categories that include activities and objects, like regular instruction, the vocational program, special education instruction or for grant programs.
In terms of dollars, salaries and benefits are the largest object purchased by the district. For every $100 the district spends in 2014-15, $81.16 goes for salaries and benefits. Within the $81.16, $43.56 goes to the salaries of teachers, librarians, school nurses and principals, $15.22 goes to the salaries of classified employees (office workers, bus drivers, food service workers and maintenance staff) and $22.38 pays for employee benefits and payroll taxes.
After salaries and benefits, the next largest object of expenditures is supplies, items like instructional materials, fuel, food and custodial supplies, anything that is considered expendable or consumed in use. $9.36 of every hundred district dollars is spent on supplies and materials. Another $8.42 is used buying services from providers like utilities and insurance. The remaining purchases are primarily for capital (long-lived) items like equipment and vehicles and travel (for students and staff). Here’s a link where you can get more detail about how the school’s district 2014-15 General Fund budget is allocated to objects.
Given the District’s mission, it isn’t suprising that teaching and teaching support activities account for the majority, nearly 72%, of its total expenditures. For every $100 that the school district spends, about $61.09 is spent on teaching activities and another $10.59 is spent on teaching support activities, such as counseling, libraries and health services.Historically, the percentage of total expenditures that Pasco spends on the teaching activity mirrors the state average. Here you can see how Pasco compares to its peers, the state average and over time. In the school district’s 2014-15 operating budget, for every $100 that the school district spends, about $12.04 is budgeted for building and central office administration, which includes typical business functions such as payroll, human resources, and accounting. Here’s a link to a spread sheet that compares the total administrative cost of the 30 largest school districts for the past three fiscal years, as reported by the Office of the Superintendent of Public Instruction, and a chart that compares how many certificated administrators each school district has compared to the number of students. Pasco’s percentage of total expenditures spent on administration is exactly the same as the state average.For every $100 that is budgeted for 2014-15, about $16.28 goes to operations activities such as maintenance, custodial and student transportation. Here’s a link that compares historical expenditures for maintenance and operations. Actual expenditures per student appear to have dropped substantially, but most of this is due to an accounting reclassification. Fiscal year 2012-13 was the first year portable classrooms were purchased from a different fund, the Capital Projects Fund, and excluded from General Fund expenditures. Here’s a link where you can get more detail about how the school’s district 2014-15 General Fund budget is allocated to activities.
For every $100 that the school district spends, $55.58 is spent on regular classroom instruction, $10.36 is spent on special education instruction and $11.17 is spent on compensatory instruction, which includes Federal Title I programs for low-income students, the state Learning Assistance Program, and programs that support students who don’t speak English. About $4.09 of each $100 spent pays for student meals and $3.91 goes for transportation operations. Here’s a link where you can get more detail about how the school district’s 2014-15 General Fund budget is allocated to programs.
Where does the money come from?
The Pasco School District gets its operating revenue from three main sources. According to the 2014-15 operating budget, the school district expects to get a total of over $177 million in revenue. For every $100 that the school district expects to get, about $77.60 comes from the State of Washington, $12.68 comes from local sources, primarily property tax and $9.45 comes from the federal government. Here’s a link for more details about the revenue included in the school’s district 2014-15 General Fund budget.
Let’s look at the three primary sources of income in greater detail:
Nearly 60% of the school district’s revenue comes as a direct apportionment from the State of Washington because Article IX of the State Constitution says that it “is the paramount duty of the state to make ample provision for the education of all children residing within its borders ...” This means that the state must provide funding for basic education. Consequently, each school district in the state receives an amount of money from the state (called an apportionment) that is based on the number of students it has enrolled in its classrooms. During the 2014-15 school year, the Pasco School District expects to receive about $106 million through this apportionment.
The state also provides money for programs such as special education, bilingual education and student transportation and has provided some money for a number of programs that go beyond what it defines as ”basic education.” For example, state voters passed Initiative 728 in 2000 that was intended to provide school districts with extra money (called Student Achievement Funds) for a number of programs intended to improve student learning. In recent years, however, the state has eliminated Student Achievement Funds and many other additional programs in an effort to cut the state’s operating budget. Read more about this below.
School districts offer many programs and activities that are not funded by the state. The state doesn’t pay for sports and other extracurricular activities, for example. Instead, those programs are typically funded by a levy on local property taxes that is approved by local voters. In the past this was the primary use of levy dollars. However, over the years, the state continued to cut education funding while at the same time setting forth unfunded mandates and levy dollars were required to fund an increasing share of basic education expenses. Fifty-nine percent of the current levy dollars cover teaching and curriculum, while only eight percent covers sports and extracurricular activities traditionally associated with local levy dollarsIn Pasco, voters approved a Maintenance and Operations Levy in February 2014 that will expire on December 31, 2016. That levy will provide the school district with a total of almost $21 million during the 2015-15 school year, or almost 12 percent of the school district’s total revenue. Since 1989, the State Legislature through, Local Effort Assistance, LEA, and also levy equalization, has provided funding assistance to property “poor” districts (like Pasco) whose tax rates for school levies are higher than the statewide average compared to other school districts. Local levy dollars, when combined with state levy equalization dollars, make up nearly 20 percent of the total District budget.
The federal government provides some funding for programs that help special education students, disadvantaged students, and students who are learning to speak English, and also provides subsidies for food services. The Pasco School District’s operating budget for the 2014-15 school year includes about $17 million from the federal government, or about 9 percent of the total revenue. Pasco receives a higher percentage of federal funding than most districts across the state because of the student demographics; Pasco has more students who qualify under federal programs that other districts.
Recent budget cuts and the McCleary decision
From 2009-2012, Pasco School District absorbed over $18.4 million in state and federal revenue reductions. These shortfalls have been the result of falling state tax revenues during the economic recession and the loss of short-term ARRA funding. Beginning in 2013 the State, responding to a court decision that it was not fulfilling its paramount duty to fully fund K-12 education (the McCleary decision), made a “down payment” on its funding obligation. Additional funding was provided for transportation operations and non-salary costs. An increase in funding for high poverty schools was made contingent on achieving smaller class sizes which requires additional teaching costs that offset much of the increased revenue. All told, the “down payment” increases revenue in 2014-15 by $5.4 million. The 2015 legislative session promises to be contentious with additional school funding not necessarily forthcoming, in spite of the McCleary decision. Of special concern to Pasco School District is continued funding of the levy equalization program. Pasco School District continues to constantly monitor State and federal budgets and their impacts on Pasco schools.
Do you want additional budget information?
Detailed financial information for each school district is posted on the website of the Office of the Superintendent of Public Instruction. Here is a link to the Report Index on the OSPI website.