Budget Basics

School tax rates are made up of two separate buckets:

Maintenance & Operations (M&O) and Interest & Sinking (I&S).

I&S is strictly for the repayment of bond debt. Bonds are taken out by a school district, much like a mortgage is taken out on a home. Bonds are used for the construction of new schools, capital improvements on existing schools, large purchases of technology, construction of large stadiums, etc.

Bond dollars can not be used for everyday expenses like salaries, utilities, insurance, etc. Those come from the M&O tax rate. An adjustment to the M&O tax rate can come from the school board, state legislature, or through a Tax Ratification Election, known as a VATRE.