School Budgets. Made Simple. Part 1

The public school budget process is not something that requires a pH.D. to understand, but it helps. My intention is to help make sense of the budgetary process, Identify streams of school revenue and expenditures as well as discuss the unique budgetary circumstances that exist in the state of Alaska. This narrative will come in three installments.

Part One

Throughout the nation, public schools are largely funded by local property taxes. These taxes are collected and allocated to the local school districts in an equitable fashion…What this means is that the schools in more affluent areas (higher tax base)do not receive more funding than school in less affluent areas (lower tax base). Throughout the nation, the property tax roll is no longer sufficient to meet the budgetary needs of the school. The state and federal governments are left to fill the void. State funding for schools occurs on top of what is generally, an already thin state budget. Federal monies to school districts and to states generally come in the form of grants. The federal monies given to school districts often come with strings attached thus encumbering an investment of human resources from the district.

The budgetary breakdown in every state is different, still, Alaska is unique. Many of Alaska’s school districts operate in communities without taxes operating a school without a local tax base is problematic, the state is left to cover the obligation of missing local taxes as well as the state funding formula. In short, the school district revenue provided by the state can be calculated through a system of multipliers that are applied to the Base Student Allocation that is determined annually by the state legislation. So, Here it is. A District’s “Basic Need” is determined by multiplying the Base Student Allocation x Average daily membership (adjusted by school size) x District Cost factor (Based on location, size of school other logistics) x special needs factor x vocational and technical funding x Intensive services student count + Correspondence Students funding which is equal to the whole number of correspondence students x 0.90 x Average daily membership. The state also provides transportation monies, capital improvement monies and room and board monies (where applicable).

Before the district determines the actual amount of funding the district will receive from the state, the school board of the school district must decide how the school will spend these funds. Although the specifics of the budgeting process varies from district to district, most districts follow a general format. Early in the spring the school board will convene a committee of individuals that will receive budgetary request from the building principals, site directors, department managers and other entities within the school. The Budgetary committee will review these requests and prioritize the requests based on the strategic plan of the district and the estimation of revenue for the upcoming school year. The budgetary committee will present these recommendations to the superintendent of schools and to the school board. The School board will approve or amend the budget. The story does not end there. The school budget is simply a guide. Each fiscal year, the school board will amend the final budget to accurately reflect expenses and revenues in the district. Upon completion of the fiscal year, and the adoption of all final budget amendments, the school budget will eventually be presented to an auditing firm that will scrutinize and ratify the school district’s budget.

Part One is an overview of the budgetary process. The next installment will look at specific expenditures and the standardized budget coding system in Alaska.