Hub - Budget Basics

Budget Basics

• Budget: The district’s annual spending plan, showing expected revenue and how it will be used.
• Revenue: All money the district receives, mainly from local, state, and federal sources.
• Expenditures: The money the district spends, such as salaries, benefits, transportation, supplies, and building costs.
• General Fund: The district’s main operating account, which pays for day-to-day costs like staff, instruction, and utilities.
• Fiscal Year: The 12-month period used for budgeting and accounting. Many districts run July 1 to June 30.

Funding Sources

• Local Revenue: Money raised in the community, primarily through property taxes.
• State Funding: Dollars provided by the state, often distributed through a formula based on enrollment and student needs.
• Federal Funding: Money from the federal government, usually restricted to specific purposes such as supporting students with disabilities or from low-income families.
• Grants: Funds awarded for a specific program or purpose, often for a limited time.

Taxes

• Property Tax: A tax based on the value of property, and the largest local source of school funding.
• Millage Rate (or Tax Rate): The amount charged per $1,000 of assessed property value. One mill equals $1 per $1,000.
• Assessed Value: The value assigned to a property for tax purposes, which may differ from market value.
• Referendum: A public vote on a tax or funding question, such as a bond or levy.

Planning and Decision-Making

• Proposed Budget: The draft plan presented to the school board and public for review.
• Final Budget: The version formally adopted by the board after public input.
• Fund Balance (Reserves): Savings that help cover emergencies, cash flow gaps, or unexpected shortfalls.
• Deficit: When spending exceeds revenue.
• Structural Deficit: An ongoing gap in which regular costs consistently outpace regular revenue.

Spending Categories

• Mandated Costs: Expenses required by law or contract, such as special education services or pension contributions.
• Per-Pupil Spending: Total spending divided by the number of students, used to compare costs over time or across districts.
• Capital Budget: Funds for long-term projects like construction, renovations, and major equipment.
• Bond: Borrowed money for capital projects, repaid over time with interest.
• One-Time Funds: Temporary money that can’t reliably support ongoing expenses.