April 2022

Talking Taxes

Each April, school boards across Iowa prepare their district budgets for the coming school year. School budgets are enrollment driven, which means that a district can only bring in funding according to how many students live in the school district. We call this being budget capped, which is different from other taxing authorities that have greater flexibility when setting a budget. Here at Alburnett this formula, along with funding we receive from other schools through open enrollment, calculates out to an operating budget of right around $8M. This $8M pays for wages and benefits of employees, building operations, transportation costs, supplies, and anything else it takes to run the school during the year.


Which gets us to setting a tax rate. Schools are funded through a combination of state funds, local property taxes, and what we call miscellaneous income, which in our case is largely open enrollment revenue. Next year we expect 41% of funding to come from state funding, 35% from miscellaneous income, and 25% from local property taxes. This means that about $2M of the total $8M operating budget will come from our local property taxes next year.


But that’s just the operating budget. There are four areas of our school budget that are funded either entirely or partially through property taxes:

  1. General Fund (operating budget)

  2. Management Fund (insurance premiums)

  3. Physical Plant & Equipment Levy, PPEL (technology, vehicles, and facility projects)

  4. Debt Service (general obligation bonds)


It can be interesting to look at the district’s tax rate history. The graphic shows the beginning of the previous general obligation bond in 07-08, the use of a debt surplus levy starting in 14-15 that we used to pay off the bond early with a huge savings in interest, the increased voter-approved PPEL in 18-19, and of course the most recent general obligation bond.


As we prepared for the election in 2020, we talked with you about how the general obligation bond would impact our taxes. One of our mailings at the time said “taxes will go up, but then they’ll go down.” As our district’s valuation grows, the tax rate needed to make the bond payments will decrease. As the Alburnett school board gets set to finalize the overall tax rate for next year, you can expect to see this begin to come true with a total tax rate of no more than $15.15. We look forward to seeing this rate continue to decrease even more over time.


If you would like to learn more about the district’s budget, consider attending the upcoming Budget Hearing that will be held in the Alburnett boardroom on Monday, April 11 at 6:00 p.m.