Schools districts in Missouri get money from two different types of taxes, or levies. Think of them like two separate banks that must be used for different things. Both levies combined comprise the total school levy.
1. School Operation Levy (The “Daily Bills” Bank)
The school operation levy is the money used to keep the school running every day.
- What it pays for: This money goes toward teachers’ pay, school supplies like books and paper, and daily costs like electricity and heating for the buildings.
- Where it lives: The money is split into three “jars”: one for general costs, one just for teachers, and one for smaller building projects.
- The “Discount” (Rollback): Sometimes, the tax is lowered. One way this happens is because of Proposition C. This is a rule where schools take some of the money people pay in sales tax (when they buy things at stores) and use it to lower the property tax.
2. Debt Service Levy (The “Big Project” Bank)
The debt service levy is a special tax approved by voters, used only to pay back money the school borrowed for large improvement projects.
- What it pays for: This is used to fund higher improvements on projects which cost too much for the regular budget, such as adding or upgrading classrooms or repairing a roof.
- How it works: When a school district needs to make large scale improvements, they ask voters if they can borrow money. This is called a bond. It is very similar to how a family gets a loan from a bank to buy a house.
- Strict Rules: By law, money in this bank cannot be used to pay for teachers, utilities, supplies etc. It can only be used to pay back the loan and the interest on that loan.
- No Tax Increase: Sometimes schools ask for a “no tax increase” bond. This means the tax rate stays exactly the same, but the school just keeps collecting it for a longer time to pay off a new project as they finish paying for an old one.
The Main Difference
The Operation Levy is for daily expenses like salaries and supplies, while the Debt Service Levy is only for paying off loans for large improvements/upgrade projects.. Voters usually have to agree before a school can borrow money for large improvement/upgrade projects.Voters usually have to agree before a school can borrow money for those big building projects.