A Tale of Two Budgets: the Operating Budget for Madison Schools versus its Budget for Community Programs and Services

Everybody knows that the Madison School district has an operating budget for the district’s educational programs. The district also has a second budget for community programs and services. The second budget is sometimes known as “Fund 80”.

Things to know about the community programs and services budget:

1. “Fund 80” sounds like a source of outside funding, such as federal aid. It’s not. When the district spends funds for community purposes, it accounts for the expenditures under this accounting title.

2. The district cannot raise property taxes for the operating budget more than a small percentage from year to year without passing a referendum. That’s not true of the community program budget. The district can raise taxes for community programs and services by any percentage without going to referendum and it does. In other words, there are two budgets and two taxes.

3. State law does not require the district to spend any revenues in this way. State law allows the district to have a separate budget for community education, training, recreational, cultural or athletic programs

4. State law limits ways that districts can spend community program funds. For example, the district cannot use these funds for the regular instructional program or restrict programs to our students. It cannot fund “activities that provide instruction and supporting services to k-12 pupils” through this tax.

5. 2000-01 was the first year that the legislature exempted community programs from the “revenue limits”. The Madison district spent $3.8M for community programs that year. In 2003-04, the total for this budget rose to $9M. It dropped to $8.2M for 2004-05.

6. Taxes are not the only source of funds for community service programs. There are also fees, grants and sometimes state or federal sources of funds. However, the tax portion of the community service budget has grown from $3.3M in 2001-02 to $7.7M in 2004-05. For that year, residential property taxes provided 93% of the total community service budget.

7. Cutting spending on community service programs does not automatically result in more funds to spend on schools and programs through the operating budget. It could result in some reduction of a homeowner’s annual taxes for schools. The district would need to cut on the community service side and win a referendum to exceed the revenue limits on the operating budget in order to turn a cut in community service spending into a gain for the operating budget.

Posted by Ruth Robarts at February 16, 2006 4:09 PM
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