School Funding

For more information regarding school funding and tax payer dollars visit the district webpage:
Levies, Bonds & Property Taxes


To review an information flyer about the levy that was passed by voters on February 11, 2014, visit here.
For more detailed budget related information or if you have questions, please contact Marshall Kruse.

School Funding Information:

The funding of schools is a complicated and frequently misunderstood process. School districts get the bulk of their operating revenue from three main sources: the state, the federal government, and from local property tax levies. The state provides about two-thirds of the school district’s revenue. The state pays for the cost of basic education because the Washington state constitution identifies education as the state’s “paramount duty.” The federal government provides a smaller percentage of the revenue and helps pay for activities such as special education and programs that support disadvantaged students.

The rest of the school district’s operating revenue, about 24 percent of the total, comes from our local property taxes through Levies. The Educational Maintenance and Operations Levy is a major one. There are other voter-approved levies, too. Money from a Facilities and Technology Levy and from a Capital Projects Fund Levy is used in the school district’s capital budget to maintain, modernize and renovate buildings and technology, and money from a Transportation Vehicle Fund levy pays for new school buses.  (see below for more details)

2014-2015 Granite Falls School District Board Adopted Budget:


Q& A Section:

Where does the district get its money?
The largest portion, approximately 67%, comes from the state. Local levies, approved by voters, provide approximately 24% and the remaining 9% comes from federal sources. A very small amount comes from fees and other local miscellaneous sources.

How does the state decide how much money to give each school district?
The number of students enrolled determines the “apportionment”, or funding, from the state. The state provides approximately $5,060.40 for every full time equivalent (FTE) student. Funding for students that come to school part time (e.g., home school students, Running Start students) is prorated according to the actual time they spend in school.

How much of the state funding is spent on salaries?
The majority of the state apportionment, about 87%, is spent on employee salaries and benefits. State funding does not fully fund the cost teachers, principals, or for most full-time support staff. Grants and other funding sources (local levy dollars, state voter-approved initiatives) help offset the difference between state funding and actual staff costs.

Where does the rest of the state funding go?
The balance of the budget is spent on transportation (5%), food services (3%), facilities and grounds upkeep (6%), utilities/insurance (4%), and other items such as security, audit/legal fees, insurance, copiers, etc.

Why does the district need a fund balance?
School districts are encouraged to maintain a 5% “fund balance” for emergency use, such as fixing a leaky roof or “front funding” costs for supplies and textbooks and getting reimbursed by the State at a later time. The fund balance is like a person’s savings account, it is usually reserved for one-time-only, unexpected costs. The fund balance is also used to calculate the district’s bond rating, which is used to obtain lower interest rates when we borrow money for long-term debt (such as building a new school).

Why is a fund balance so important?
The primary purpose for a fund balance is financial stability. Since we can’t control many of the variables that impact us financially, an adequate reserve is necessary to maintain stability. Once it is spent, there is no easy way to replenish it. Therefore, using the fund balance for items such as salary or benefit increases and additional staff would mean those very items would have to be cut as soon as the fund balance runs out. If we spend it for daily operations and have no way to replace the money, the savings account will run out and we will be unable to continue to fund current programs. It doesn’t make sense to commit to expenses that cannot be sustained. We believe that maintaining our current reserves and living within our means is still the best fiscal policy for our students, staff, and community.

What is our fund balance right now?
We anticipate our fund balance to be approximately 5% of our total budget by the end of the 2013/2014 school year.

When voters approve a levy where does that money go?
The taxpayers in Granite Falls consistently support local levies for daily operations of our schools. Levy dollars provide funding for some employee salaries the state does not fully fund and other programs such as transportation, co-curricular activities, technology, and textbooks not fully funded by the state.

What is the difference between levy money and bond money?
Voter approved bond money can only be used to build schools, buy property, or for major modernization projects to schools. The most recent bond issued approved by voters in 2005 built the new high school that opened in December 2007. Voters have also passed bond issues in the past to build Mountain Way and Monte Cristo Elementary schools and remodel the old high school and current Middle School. Bond money cannot be used for daily operations such as employee salaries, transportation, co-curricular activities, or textbooks.

Can money from different funds be combined to help out if there is a shortfall?
No. School districts cannot combine funds. School districts have four main funding categories: General fund, ASB fund, Capital Projects fund, and Debit Service fund. The General fund is dedicated to school operations such as salaries, transportation, food service, grounds/maintenance, and utilities (heat/lights); the ASB fund can only be used to support student co-curricular activities (student clubs, athletics, etc.); the Capital Projects fund is for small remodel projects or a new roof; and the Debit Service fund is to repay bond payments. Those funds cannot be intermingled. For example, if we have $20,000 in the Capital Projects fund to upgrade a heating system at a school, we cannot take that money and use it to pay for teacher salaries.

What kind of impacts can the legislative session have on school budgets?
The legislators have a direct impact on school budgets. The state constitution says the state’s paramount duty is to fund “basic” education. In 2001, Washington State voters approved Initiative 728 (I-728) to provide funds to local school districts to help reduce class size. That funding was about $1,000,000 but the I-728 funding is now eliminated. All too frequently, the legislative session will include mandates to school districts with no known funding source. That means the district must find a way to pay for programs or services the state requires, but does not allocate any funding for the new program or service.

Will enrollment also affect the budget?
An enrollment decline may also dictate reductions in staff. Remember, the state provides approximately $5,060.40 for every full time equivalent (FTE) student, so if the enrollment declines the amount of funding from the state is also reduced.

Can we expect things to get better next year?
The financial outlook for Washington State has been stabilizing and the state is starting to increase the funding it has reduced over the last five years. It will take the state several years to recover from the budget shortfall. Again, our priorities will remain student programs and services for academic achievement, to maintain a fund balance and to live within our means.

updated 7-2014