School Comments by Dr. Robert Mayer School funding in South Dakota can be confusing. When property taxpayers pay their taxes, they do so twice annually by writing two checks to the county treasurer. When schools receive those taxes, the money is divided into four annual operating funds and a bond redemption fund. The four operating funds are: general fund, capital outlay fund, special education fund, and pension fund. Further discussion of these funds is appropriate.
The general fund (76 percent of the total budget) pays expenses such as salaries and salary-related items (80 percent of the total general fund), utilities, repairs, transportation (except for bus purchases), and supplies. The revenue which enters the general fund comes from 30 different sources. Some of those sources are property taxes, state aid, state apportionment, county apportionment (court fines), bank franchise tax, gate receipts and federal grants.
The general fund budget of revenue and expenditures for the Vermillion School District for 2003-04 is $6,933,000 of which $2,359,700 comes from property taxes. State aid accounts for $3,020,790 (projected). The per pupil cost in the general fund is $5,193.
The capital outlay fund is supported from local property taxes only. There is a maximum tax levy of $3 per each thousand dollars of assessed value of the property. Vermillion's levy in this fund is $2.73. Revenues in the capital outlay fund are spent on items such as: debt service for construction projects, computers, furniture, textbooks, vehicles, equipment, roof replacement, renovations to facilities. The budget of revenue and expenditures for the Vermillion School District in the capital outlay fund is $1,047,465.
The special education fund is designed to provide services to children with disabilities. The revenue in this fund comes from property taxes, state aid, and federal aid. Property taxes may be levied at a maximum of $1.40 per thousand of assessed value. Revenues and expenditures in the special education fund total $1,058,145 with $456,200 local taxes, $385,000 from state sources, and $185,000 from federal sources.
The major areas of expenditures are salaries, psychological services, physical and occupational therapy, and out of district placement. There are 169 students receiving special education services in the Vermillion schools.
The pension fund was designed to help schools pay their commitment to the South Dakota Retirement System. The maximum tax levy is $.30 per thousand of assessed value. The amount budgeted is $98,450.
Some schools have bond funds to pay for construction projects approved by voters. Vermillion's bond fund is $276,000 payment for the 2003-04 school year. This figure has a levy of about $.95 per thousand of assessed value.
Revenues cannot be transferred from one fund to another with the exception of transfer from general fund to special education. The inability to transfer money between funds is an important issue for schools. The fund where schools are experiencing revenue shortfalls is the general fund and money cannot be transferred from the other funds to assist the general fund.
The next article will discuss the school funding formula used in South Dakota. A future article will discuss the formula's impact on the Vermillion schools.