Invest in St. Joseph:
Financial Considerations

What do we need to invest in for viable schools? What do we want to invest in for a thriving St. Joseph? What can we afford? These questions inform our school board and our community as we make decisions together about how to invest limited resources. 

The St. Joseph School District prepares an operating budget for each new school year to guide spending and align resources with our strategic plan. For 2019-2020, our budget is $134.8 million. Approximately 80% of our budget is dedicated to teachers and staff and supplies for our classrooms. The other 20% funds transportation and professional services, as well as repairs, capital projects, and debt service to operate our district and our facilities. 

If a bond is created to fund our facilities work, that money will be managed separate from our operating budget. As part of this process, we need to decide at what level we want to invest in our schools. 

What investments should our community make toward the future? Below are a few frequently asked questions about school district finances.

What is the difference between operating expenses and capital expenses?

Generally speaking, Operating Expenses are those costs needed to run the day-to-day operations of the school district (e.g., salaries and benefits, transportation, supplies, and maintenance). Capital Expenses are costs related to building construction, renovation, and/or acquisition, including the purchase or lease of land or buildings.

The St. Joseph School District manages four different budgets or “funds” to pay for different educational needs. The district is legally required to keep these funds separate and use the money within each fund for that fund’s specific purpose.

  • The General Fund includes all financial resources to pay for operating (day-to-day) expenses except those required to be accounted for in the other funds.

  • The Special Revenue (Teachers’) Fund includes revenue that is restricted to costs for certified staff salaries and benefits, and tuition payments to other school districts.

  • The Capital Projects Fund includes all facility acquisition, all construction, all lease purchase principle and interest payments and all other capital (e.g., facility) expenses. 

  • The Debt Service Fund includes resources for the payment of general long-term debt principal, interest, and agent fees. 

How do school districts pay for operating and capital expenses?

School districts are primarily funded through property taxes, with smaller amounts coming from state and federal appropriations and grants. Property taxes are the only local revenue resource for schools as a taxing authority.

How do school districts use property taxes to fund educational needs?

School districts leverage operating levies, general obligation bonds (i.e., bond levies), and capital facilities leases to pay for educational needs. A bond requires a property tax levy to pay down the debt that is incurred by the district; however, not all levies are bond-related. For example, the levy that St. Joseph School District passed in April 2019 is an operating levy that can only be used for operating expenses. 

Generally speaking, operating levies are used to raise revenue to support operating expenses, and general obligation bonds are used to fund capital expenses. Bonds are supported by a “debt service” levy. A Capital Facilities Lease can also be used for capital expenses. A Capital Facilities Lease is limited to the school district’s ability to pay from funds raised via the district’s operating levy.