Public schools annually receive a portion of their funding from the state and federal governments. Recent years of uncertainty in the level of support that will be provided by those entities has required districts to become more reliant on local funding generated by property taxes.
School districts have two options for generating funding at the local level. The first option is a levy tax rate assessed against personal property. School districts may request an increase in the tax rate for their respective purposes by submitting the request to a vote and a simple majority of the qualified electors vote in favor of the increase. If the increase would raise the levy rate above $6, two-thirds of the qualified electors must vote in favor of the increase. Money generated from a tax levy can be used for general operating expenses such as salaries.
The second option is a bond tax levy assessed against personal property. A bond allows the school district to become indebted in an amount not to exceed five percent of the value of their taxable tangible property. The school district may request an increase in indebtedness by placing the issue before the voters and depending on the month the election is held, must receive 57% to two-thirds approval. Money generated from bond indebtedness is used for capital projects such as building construction or renovations.