Tiger Insights: In light of budget cuts, can a building project be possible

Editor’s Note: In the coming weeks, the Red Oak Express will be publishing a series of articles from Red Oak school officials regarding the Tigervision building project and the district in general. This is the first article in the series. 

Good teachers and curriculum are absolutely more valuable to a student’s education than are buildings.  

However, there are state laws which dictate how public schools and facilities are funded in Iowa. The general fund accounts for the revenues and expenditures for the district’s educational programs and most school operations. Salaries make up roughly 80 percent of the expenditures in the general fund, with curriculum costs, utilities, professional development, professional services, maintenance  and transportation costs (fuel and bus maintenance) making up the balance. The general fund receives revenues from the school finance formula which includes a combination of state aid and local property taxes.  

Having said that, there are additional funds districts can use that cannot be used in the general fund but can be used to benefit our district in different ways. I’ve listed below the primary funding sources also available to school districts throughout the state. This is not a comprehensive list.  

— Physical Plant and Equipment Levy (PPEL): This levy may be used for building renovations and additions, bus purchases, equipment, and technology purchases but not for the day-to-day operations of the school district. The school board can levy up to $.33 per $1,000 on a PPEL levy and the district’s voters may authorize a levy of up to $1.34 per $1,000. Our district voters approved the voted levy in 2008 to run from 2010-2020. Voters will have another opportunity to vote on this sometime before 2020. 

— State Sales Tax (SAVE): This is money received from the state based upon enrollment. It may be used for the same things as the PPEL and also to pay down existing debt. A revenue purpose statement was approved by our district’s voters Sept. 8, 2009, which outlined the use of these funds. 

— Debt Service: This is strictly voter-approved and can only be used for debt services. Our district voters approved this Debt Service Levy in 1999, although it has been levied only on a few occasions in the past. Our district had primarily been using sales tax dollars and a combination of other levies to pay off this debt. 

— Management Levy: Workers compensation, property and casualty insurance, early retirement benefits and equipment break-down insurance are the primary uses for this fund.  

— Cash Reserve Levy: This tax levy is primarily available to provide cash in the general fund to eliminate severe cash flow problems, to avoid the expense of borrowing to meet cash flow needs or to provide cash with modified allowable growth.  

— Income Surtax: Local income surtax is a tax based on the amount of state individual income tax due. Income surtaxes have been used by many school districts in Iowa since the early 1970s as a way to relieve some of the tax burden from property owners.

 Some of these levies require voter approval and some do not, but in all cases there are limits to what can be levied.   School finance is complicated.  Although the intent is that the cost per pupil remains fairly constant throughout the state, the impact this has on taxpayers can vary widely by district. Each school board does what it can to utilize the existing funds to provide a quality education to every student in its district, while at the same time recognizing that we also have a responsibility to the property owners in our district who end up footing much of the bill.   

We have had declining enrollment in our school district over the past several years and thus have less overall funding available for our district’s operations (general fund).  With fewer revenues available for the day-to-day operations of our district, we have had to consider the expenditures.  The largest portion of general fund expenditures is for staff and a reduction in this area needs to be considered carefully. Unfortunately, when reducing staff, we will likely have to reduce our curriculum offerings or increase class sizes. None of these options are desirable, but we have had to reduce staff slightly over the past few years and will continue to consider different options in the future.  

Another way to reduce general fund expenses is to become more efficient. Some ways to operate more efficiently are to share staff and programs and decrease the number of buildings we operate. This will enable us to decrease utility and maintenance costs.  We currently operate five different buildings and have declining enrollment. Each year this is becoming  a less viable option for the future prosperity of our school district. 

Kathy Walker, Red Oak Community School Board member.