School Funding 101
With help editing by Missy Storley
Over the last few months, I have received more questions concerning school funding than any year I can remember. A lot of it has to do with the new teacher pay proposal from the state and the ability of schools to meet the new requirements. Consequently, I feel like it might be a good time to do an overview of public school funding.
South Dakota public school budgets consist of several different funds, each serving specific purposes and funded through various taxation mechanisms. Here’s an overview of the primary funds typically found in a South Dakota public school budget and how each fund is taxed.
The General Fund is the primary operating fund for most school districts. It covers daily operating expenses such as salaries, utilities, instructional materials, and transportation. The revenue for the General Fund primarily comes from local property taxes, state aid, and some federal funding. Property taxes are assessed based on the value of taxable property within the school district and the levies are set by the legislature annually.
The Capital Outlay Fund is designated for expenditures related to capital improvements, such as building construction, renovation, and equipment purchases. The revenue for the Capital Outlay Fund is generated primarily through local property taxes specifically earmarked for capital projects. School districts may also receive some state aid for capital outlay expenses.
The Special Education Fund provides services and resources for students with special needs, including special education teachers, support staff, and specialized equipment. Funding for the Special Education Fund typically comes from a combination of federal funding, state aid, and local property taxes. Some federal grants specifically target special education programs.
The Debt Service Fund is used to repay debts incurred by the school district, such as bonds issued to fund capital projects. The revenue for the Debt Service Fund comes from local property taxes levied specifically to repay the principal and interest on outstanding debt obligations.
The Food Service Fund covers the costs associated with providing meals to students, including food purchases, labor, and equipment maintenance. The revenue for the Food Service Fund primarily comes from payments received for school meals, federal reimbursements through the National School Lunch Program and, in some cases, state aid.
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