School District Budget Development

Approving a fiscally sound annual budget, that allocates resources to meet the district’s educational and operational goals and priorities, is one of the school board’s most important duties. IASB has many tools to help you and your school board as you work through this process. 

Review of District Financial Health

At the onset of the budget development process, board members need to know where the district stands financially speaking. These tools will help you have that conversation at the board table.

The budget development cycle best begins with a review of your district’s financial health. This tool will help explain the strength of your district’s financial health now and in the past.

Without a doubt, the most important financial health measure is your district’s UAB ratio (Unspent spending authority compared to maximum spending authority). IASB recommends this ratio be between 5-15 percent, not to exceed 25 percent. Use this tool to start or continue the discussion on UAB and setting and maintaining a board goal for your UAB ratio.

Taxpayers want to know that your board is reliably managing the district’s overall property tax rate from one year to the next. This tool provides not only your district’s overall tax rate history, but also the history of each component of that tax rate. Use this tool to talk about goals relative to your district’s tax rates now and into the future.

While it is good to know how your district has fared financially in the past, it is equally as important to gain an understanding of where your district may be headed, financially speaking, into the future. Use this tool to estimate the amount of “new money” (change in regular program funding from year to year) the district may receive over the next several years using assumptions you input on likely enrollment and SSA changes. Use this information to answer the question – Will we have sufficient additional resources in the future or do we need to consider making strategic budget reductions now to stay financially healthy into the future?

Budget Development Planning

As the budget development cycle begins, the board can use these tools to help establish a framework for its budget discussions.

Begin the budget development process with the end in mind by reviewing critical statutory budget deadlines.

With the critical deadlines in mind, the board will want to establish a budget development calendar to ensure all aspects of the budget process are addressed and decisions made in a timely manner to meet statutorily set deadlines. Use this tool as a template that can be modified to create a budget calendar that meets the needs of your school district.

It is good practice for the board to agree upon clear budget parameters and budget goals the board expects administration to follow as administration puts together a proposed budget for the board’s consideration. Use this template to prompt a thorough discussion of budget parameters and goals that are important to the board.

Review of Proposed Budget

It is the board’s job to review, approve and certify the budget proposal for your district prior to its submission on April 15. These tools that provide you with critical knowledge and questions board members may want to consider and discuss at the board table.

Board members may want to review a list of all key board decision points incorporated in a budget proposal. Use this tool to gain an understanding of each of these decision points, and just as importantly the questions you as a board member may want to ask at the board table to further your understanding of the implications of these decisions on the proposed budget.

As your board considers the budget proposal, you may wish for a shorter version of the Budget Decision Points referred to above. Use this tool as a checklist to ensure that the answers to the critical questions posed are satisfactorily addressed by the budget proposal.

A frequent citizen concern is how the proposed overall tax rate will impact them as a homeowner, farmer or businessman. Use this tool to answer that question.

Statute requires that every board hold an official public hearing presenting its proposed certified budget. Use this tool to review a list of likely topics to be addressed at the public hearing.