From tax levies to tax rates, school budget language is often full of jargon and school- district-specific terms. Below are explanations of some commonly used budget terms.

Any portion of a district’s fund balance from the previous fiscal year that is used as revenue in the following year’s budget.

The dollar value assigned to a home or other piece of real estate for property tax purposes.

The spending plan adopted by the Board of Education.

Money borrowed to pay for a school district expense. Typically, the money is used for capital expenses, including the construction or renovation of a building. The goal in borrowing is to spread the cost out over a period of years and lessen the cost to taxpayers in any single year. By definition, a bond is a written promise to pay a specific sum of money by a specific date in the future together with interest costs.

A plan estimating the proposed expenses for a fiscal year and the proposed means for paying for those expenses.

An expense that is generally more than $20,000 and results in the ownership, control, or possession of assets intended for continued use over long periods of time. These can include new buildings or building renovations and additions, and new equipment (e.g., desks, computers, etc.).

An index of prices used to measure the change in the cost of basic goods and services in comparison with a fixed base period. (Also called the “cost-of-living” index.) Note that the CPI does not take into consideration many of the items that cause school district budgets to rise, such as the increasing cost of health insurance, liability insurance, and retirement contributions.

A contingency budget may not result in a tax levy greater than the tax that was levied for the prior school year (i.e., a zero levy increase). Under a contingency budget, the percentage of the budget devoted to administrative costs cannot increase from the prior year’s budget or the last defeated budget (exclusive of the capital component), whichever is lower.

Under state law, school boards may submit a budget to voters a maximum of two times. If the proposed budget is defeated twice, the board must adopt a contingency budget. The school board also has the option of going directly to a contingent budget immediately after the first budget defeat. 

Under a contingency budget, the district is restricted to “ordinary contingent expenses.” These are expenses deemed absolutely necessary to: operate and maintain school buildings and mandated educational programs; preserve the property of the district; and ensure the health and safety of students and staff. The Board of Education determines which appropriations constitute ordinary contingent expenses.

Under a contingency budget, some expenses are prohibited, and districts are subject to the following restrictions: 

• buildings can only be used for instructional programming;

• no new contracts may be negotiated or entered into; 

• no public use of school buildings and grounds without a charged fee that covers the actual cost of the use can occur (e.g., staffing and utility costs); 

• there can be no purchasing of student supplies or materials; 

• there can be no equipment purchases; and 

• there can be no transportation unrelated to student transport to and from school.

Amounts paid by the district on behalf of employees. These amounts are not included in the gross salary. They are fringe benefits, and while not paid directly to employees, are part of the cost of operating a school district. Employee benefits include the district cost for health insurance premiums, dental insurance, life and disability insurance, Medicare, retirement, social security, and tuition reimbursement.

Payment of cash or transfer of property or services in order to acquire goods or services. Simply put, in school budgets, this is where money is spent.

A fiscal year is the accounting period on which a budget is based. School districts in New York State operate on a fiscal year of July 1 through June 30.

A fund balance is created when the school district has money left over at the end of its fiscal year from either under-spending the budget or taking in additional revenue. Part of the fund balance (“appropriated fund balance”) may be applied as revenues to the district’s following year budget. A portion may also be set aside (“unassigned fund balance”) to pay for emergencies or other unforeseen occurrences. You can think of unassigned fund balances as “rainy day funds” or savings.

Where the money comes from to pay for school district operations. The main sources of revenue come from property taxes and state aid.

The total amount paid to a staff member, before deductions, for services rendered while on the district payroll.

The New York State School Tax Relief (STAR) Program provides tax relief in the form of a credit or exemption for school taxes for all owner-occupied, primary residents, regardless of income. Senior citizens who meet income requirements may qualify for an enhanced exemption.

State aid is money the state gives to school districts, to be used in different areas, such as lowering the tax levy, BOCES, transportation, etc. Until the state passes its budget, the district does not know exactly how much to expect in state aid, but school districts are still required to present their budgets to voters on the third Tuesday in May. To meet that mandate, the district had to estimate its state aid revenues.

Consumable materials used in the operation of the school district, including food, textbooks, paper, pencils, office supplies, custodial supplies, material used in maintenance activities, and computer software.

Assessed value of local real estate that a school district may tax.

The total sum to be raised by a tax, or the legislative measure by which an annual or general tax is imposed.

The number used to calculate the taxes that each individual property owner will pay. This amount is usually outlined in $1,000 increments and based on the assessed value of property.

A detailed list showing the expenses a school district is proposing in the budget plan going to voters. By law, districts must divide their budgets into three categories—administrative component, capital component and program component—and must show how much each component has increased compared to the total budget. New York State law requires this document to be available to all residents. 

• Administrative Budget Component: Includes expenses for office and administrative costs; salaries and benefits for certified school administrators who spend 50 percent or more of their time performing supervisory duties; data processing; public information; legal fees; property insurance; and school board expenses.

• Capital Budget Component: This covers all school bus purchases, debt service on buildings, and leasing costs; tax certiorari and court-ordered costs; and all facility costs, including salaries and benefits of the custodial staff; service contracts, maintenance supplies, and equipment; and utilities.

• Program Budget Component: This portion includes salaries and benefits of teachers and supervisors who spend the majority of their time teaching; instructional costs such as supplies, equipment, and textbooks; co-curricular activities and interscholastic athletics; staff development; and transportation operating costs.

A school district is permitted to keep up to four percent of its budget amount in an unappropriated fund. This money may be used to pay for emergency repairs and other unforeseen occurrences. You can think of unassigned fund balance as “rainy day funds” or savings.