school finance 101

Public school taxes involve two figures, dividing the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, food, gas and utilities.

The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.

Proceeds from a bond issue can be used for the construction and renovation of facilities, the acquisition of land and the purchase of capital items such as equipment, technology and transportation. I&S funds cannot by law be used to pay M&O expenses, which means that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs for utilities and services.