CLINTON — The Clinton Community Action Congress received a crash course in school finance Friday evening from Clinton School District Superintendent Randall Clegg.

Clegg spent more than two hours explaining where school districts receive their funding and how dollars from the different funds can be spent, specifically the proposed Physical Plant and Equipment Levy to be voted on March 7 in the Clinton district.

An Iowa Supreme Court ruling — called Dillion’s Rule and named after the chief justice at the time — states schools can only do what is expressly granted in the Iowa Code. This differs from the home rule governing cities and counties, which can do anything not expressly prohibited by statute.

The school district’s general operating budget comes from several sources. The Foundation Aid Levy, the beginning base for the school budget, is mandated at $5.40 per $1,000 of valuation on property taxes. That amounts to about $5.4 million for the Clinton School District.

State aid, generated from the state through liquor licenses, gaming dollars, income tax or other revenue sources, represents the single largest chunk of the budget at approximately $21 million.

The school district also receives about $5.4 million from the Additional Levy, which is driven by the number of enrolled students. School boards have no control over these numbers, said Clegg. They are determined by a formula created by the state, and depend largely on how property-rich the district is.

The Clinton School District, considered property-poor, receives $8.40 per $1,000 of value. This is significantly higher than Camanche, which gets $4.13 per $1,000, or Northeast, at $5.33.

The Instructional Support Levy amount is set by the school board, and can come entirely from property taxes, or a portion from income surtax. Clinton currently receives about $1.3 million through the ISL — $827,000 from income surtax and $311,000 from property tax. Clinton School District voters approved this tax’s use.

The state is supposed to fund 25 percent of the ISL, but has failed to do so for many years, said Clegg. About half — or $207,000 — of what should be paid is actually received.

Federal dollars amount to about $1.3 million, said Clegg, although the budget proposed by President George W. Bush would reduce that by about $100,000.

Local grants total about $1 million — $825,000 from the 21st Century after school program and $325,000 for elementary counseling.

Another $800,000 is derived from miscellaneous sources, such as student fees, mobile home tax and interest on investments. Occasionally a special appropriation is made by the Legislature and is deemed Miscellaneous Income.

A state appropriation of approximately $600,000 also is made primarily for teachers’ salaries, bringing the total budget to $35 million. Of that, a large percentage must be used for specific programs. The special-education program consumes $6.4 million and $1.4 million goes to dropout prevention. Talented and Gifted programming receives about $236,000, while $1.5 million is technically in the budget, but goes from the state directly to the Area Education Agency.

Another $20 million pays salaries of teachers, bus drivers, secretaries and other employees, fuel, utilities and supplies.

The General Fund cannot be used to improve buildings, said Clegg. It must come out of PPEL funding.

New schools can be funded by bond referendums or the local options sales tax, said Clegg. The debt capacity is 5 percent of the district’s total valuation — about $32 million in Clinton. When a bond is passed, $2.70 can be levied to pay it, said Clegg, or up to $4.05 if approved by public vote. Even at that maximum rate, only $26 million would be generated, meaning the technical maximum debt capacity cannot be funded. The school district currently has about $7.8 million in bonded debt.

Each year $730,000 is paid out in principal and interest.

Local option sales tax goes into a separate fund, said Clegg, and can only be spent on what the voters approve. All sales tax in the state goes into one pot, and then is distributed based on the number of enrolled students in a district. Local voters approved this tax in early 2001.

Tax increment finance districts do not impact how much the school district receives from property tax, said Clegg, but does affect how much individuals pay. If the $35 million of the district’s value currently in TIF went away, individual taxpayers would pay 82 cents less per $1,000 of value. The PPEL and bonded debt are still paid by institutions under TIF.

There are two different types of PPEL, the “regular” and “voter approved.”

The regular PPEL, maxed at $.33 per $1,000 of valuation, is enacted by the school board annually. The voter-approved PPEL cannot exceed the amount that would be generated from $1.34 per $1,000 of valuation, and can come from a combination of income surtax and property tax. The ballot on March 7 would renew the level from 10 years ago, said Clegg, not increasing the $.67 cap.

Two percent would come from income surtax, and about $.24 per $1,000 of value on property taxes, to bring in $466,000 annually to the school district.

“(PPEL) is designated for improvements of school facilities,” said Clegg. “Over the past 10 years, PPEL has done a lot of good. Unfortunately you can’t see a lot of it.”

The school board takes into consideration the recommended list of priorities from the consulting engineer, suggestions from constituents and compliance with the Americans with Disabilities Act when determining how the PPEL should be spent. said Clegg.

For the 2006 fiscal year, the Clinton High School consumer science classrooms were remodeled through the PPEL, with another project yet to be determined. In 2005, the Max Lynn tennis courts were resurfaced and the CHS roof repaired, among other projects.

If the PPEL is voted down, the school board will have to carve away at the budget.