Capital Funds for General Funds
"Last week, the board approved the transfer of $400,000 in interest from the capital fund, which pays for buildings and construction, into the general fund."
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It pays for school districts to have large capital funds because they can now use the interest to free up some limited funds for the general fund. Without this money, districts would have to make tough decisions about staffing and support materials.
The logic of using these funds seems questionable since the funds were earmarked for capital projects only. The interest seems to keep the funds closer to what the public voted for these capital projects. A dollar over time becomes worth less. So the interest would seem to be more aptly applied to capital budgets BUT I think that this loophole is there because the state knows that they are not fully funding basic education and are always looking for creative ways to stay the real issue. The problem is that most school district do not have this kind of capital fund. Only big or growing districts. In this case, Northshore is big and in an affluent area and does not have the immediate pressure of population growth to need to maximize capital dollars. They are just trying to best use general funds to provide the maximum education now.
----------------------------------------------------------
It pays for school districts to have large capital funds because they can now use the interest to free up some limited funds for the general fund. Without this money, districts would have to make tough decisions about staffing and support materials.
The logic of using these funds seems questionable since the funds were earmarked for capital projects only. The interest seems to keep the funds closer to what the public voted for these capital projects. A dollar over time becomes worth less. So the interest would seem to be more aptly applied to capital budgets BUT I think that this loophole is there because the state knows that they are not fully funding basic education and are always looking for creative ways to stay the real issue. The problem is that most school district do not have this kind of capital fund. Only big or growing districts. In this case, Northshore is big and in an affluent area and does not have the immediate pressure of population growth to need to maximize capital dollars. They are just trying to best use general funds to provide the maximum education now.
posted by Mike at 8:12 AM
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