The basics of school finance
What does school finance mean? Like many things it means different things to different people. Does it mean to supply the resources to educate the children who attend the Marshalltown Community School District? Does it mean to employ an adequate number of people and pay them a competitive wage? Does it mean to keep property taxes low?
To some it means all of these things, to others maybe just one of these things, and some people may not think of any of these things when they hear school finance. School finance affects everyone in the district whether they know it or not. Most purchases that are made have a one-cent tax on it for schools. If you own property or rent you are paying property taxes directly or indirectly and if you have children or grandchildren in school you are definitely affected by school finance.
This may surprise some people, but schools are multi-million dollar operations. In most communities, school districts are the largest employer and organization. School districts run on a fiscal year that starts July 1 and ends June 30.
The majority of a school district’s revenues come from taxes, specifically property taxes and income taxes. The amount of tax revenue a school district receives to be spent on staff salaries & benefits, utilities, and supplies depends how many students they have. A student count is held every year in October, and data from the count is used to determine the regular program district cost per student. A portion of this per-student funding comes from local property taxes and a portion of it comes from the state, using the funding formula. That is the simple part of school finance – there are many other funding streams that are required to be spent for specific purposes.
School districts have very little control over revenues. The state legislature determines the regular program district cost per student. A balancing act happens each spring – the district must decide how much money is needed to operate the organization efficiently, yet give students the resources they need to excel. Unfortunately, this sometimes requires reductions in expenses when revenues are not what they need to be.
School finance can be confusing, even for some veteran school leaders. Schools are very regulated and have many rules and regulations that must be followed. If you have questions about school finance, please feel free to contact us at the MCSD Central Office – 641-754-1000.