(Editor’s note – Retired physician Steve Karber and retired teacher Julie Karber, co-chairs of the volunteer Pay It Forward committee that is working to educate the public about the Greene County Schools’ Sept. 13 bond issue proposal, wrote the following as a layman’s guide to school finance.)
Understanding the source of school finances as well as regulations for spending is critical in consideration of a school bond. Money has to be available, then officials have to have the authority to use that money to provide education to students of the public schools.
Property tax is the engine that drives local government and public schools, and requires approximately half of the property tax generated in Greene County. State income surtax provides supplemental support for certain funds (the instructional support levy and physical plant and equipment levy). Local option sales tax generates about $1.1 million per year for use on buildings, equipment and technology. State aid is determined annually by state government and provides a variable amount to the general fund.
Funds used by administration and the school board include the General Fund (supplemented by the Instructional Support Levy), Debt Service, Management Fund, Physical Plant Equipment Levy Fund and SAVE (State Penny).
DEBT SERVICE: This is essentially a bond issue that is capital only used for construction and renovation of buildings and athletic facilities. This requires voter approval with 60 percent of voters in favor to pass.
GENERAL FUND: This is used for staff, energy (including transportation costs) and curriculum. It is student driven with the amount per student set by the state legislature. A specific number of dollars per student is allowed on an equal basis across the state. Every school district has a basic levy of $5.40 per thousand applied to the taxable property. Then state aid is used to finance up to 87.5 percent of the cost per student. An additional levy placed on property tax funds the last 12.5 percent of the cost per student. The 2016 levy rate for Greene County School was $9.83 per thousand. This is all state-controlled and districts with higher property tax valuation receive less state aid.
Locally controlled instructional support levy can fund up to 10 percent of the general fund to help with those same costs for staff, energy and curriculum. The income surtax at a 7 percent rate combined with a property tax levy of $.55024 provides the total of $680,141 for 2016/17.
The important take home is that staff salary, energy and curriculum can only be paid for by these funds. Eighty to 85 percent of a school district’s general fund is consumed by salaries.
Any savings in transportation or energy thus make a big difference in additional funds for curriculum and teacher salaries. The conversion from five to two facilities as proposed in the upcoming school bond potentially saves $360,000 per year by reducing one administrator, savings in energy costs, savings in transportation and janitorial salaries.
MANAGEMENT FUND: This is used to provide property and casualty insurance, worker’s compensation and early retirement benefits. It is determined by the board annually and limited by use of the funds. This year’s levy is $0.62 per thousand.
PHYSICAL PLANT & EQUIPMENT LEVY (PPEL): This fund has a voted portion that was passed with the reorganization and is in effect for 10 years. It is limited to a levy of $1.33/thousand and is set at $1.08 this year. It also is supported by income surtax with a maximum of 10 percent and utilized at 1 percent for FISCAL YEAR 2017. This fund is used for buildings, equipment and technology.
SAVE (STATE PENNY): This is the sales tax fund that is used for buildings, equipment and technology that cost more than $500 per item. This provides $1.1 million per year and a majority is utilized every year. It was borrowed against and is currently being used to repay revenue bonds issued for improvements to the elementary school (2007) and Grand Junction building (2012).
Proposed changes in our facilities from five buildings to two buildings with the associated new construction requires a bond issue. We think that utilizing this tool for the $19.4 building project at a cost of $2.46 per thousand of property tax will provide the proper environment for our young students as well as excellent facilities that will help attract dedicated professionals to our faculty and help persuade families to move to our school district. ~Steve and Julie Karber
