Decoding The School District Budget – Part 3: Understanding Expenses

In Part 1, we examined where the district’s money comes from. In Part 2, we explained why that money is separated into funds with different purposes and restrictions.

Now we can examine how the district spends it.

SoWashCo’s 2026–27 preliminary budget includes approximately $550.5 million in expenditures across all funds.

That total includes regular school operations, nutrition and community programs, debt payments, and more than $100 million of construction spending. It should not be interpreted as the annual cost of classroom education alone.

For understanding the district’s ongoing K–12 operations, the most useful place to begin is the General Fund, which contains approximately $367.1 million in projected expenditures.

Two Ways to View the Same Spending

There are two useful ways to examine district expenses:

1. By program: What district function received the resources?
2. By object: What did the district purchase?

For example, the district can report an employee’s compensation in two ways:

• The employee’s salary and benefits are expenditure objects.
• The school or service in which that employee works determines the program.

Both views describe the same dollar from a different perspective. The chart below shows both dimensions at once:

The width of each column represents the program’s share of General Fund spending. Wider columns receive more total resources.

The colored sections within each column show what that program purchases (the objects). Blue represents salaries, red represents employee benefits, yellow represents purchased services, green represents supplies, orange represents equipment and capital, and light blue represents other expenditures.

What the Chart Shows

Regular Instruction is the largest General Fund program, representing approximately 43% of expenditures. Special Education Instruction represents approximately 22%, followed by Pupil Support at approximately 13% and Sites and Buildings at approximately 10%.

Together, these four areas account for nearly 88% of General Fund spending.

The chart also demonstrates that different programs have different cost structures.

Regular Instruction, Special Education, Instructional Support, Administration, and District Support primarily purchase employee time. Pupil Support contains a larger share of purchased services because it includes transportation. Sites and Buildings contains substantially more contracted services, equipment, and capital spending.

This is why statements such as “cut administration,” “reduce services,” or “spend more on instruction” require further definition. A program identifies where the money is used. An object identifies what is purchased.

Any budget change must eventually affect both.

Salaries and Benefits

Public education is fundamentally a people-intensive service.

The General Fund includes approximately:

• $202.6 million in salaries
• $86.1 million in employee benefits

Together, salaries and benefits total approximately $288.7 million, or nearly 79% of General Fund expenditures.

Salaries include wages paid to:

• Teachers
• Educational assistants
• Principals and administrators
• Counselors, nurses, psychologists, and social workers
• Custodians and maintenance employees
• Technology, transportation, and business staff
• Other district personnel

Benefits include:

• Employer-paid health and insurance benefits
• Employer retirement contributions
• The employer share of payroll taxes
• Other negotiated or legally required employee benefits

Because compensation represents such a large share of operating expenses, significant recurring budget reductions are difficult to achieve without eventually affecting staffing, compensation, service levels, or some combination of the three.

Purchased Services

The General Fund includes approximately $49.5 million in purchased services.

Not everyone who provides a service to the district is a district employee. This category includes work performed by outside companies and professionals, as well as operating costs that do not involve purchasing a physical product.

Examples include:

• Contracted transportation
• Professional and technical services
• Legal and audit services
• Utilities
• Property and equipment rentals
• Communications
• Repairs and maintenance performed by outside vendors

Purchased services account for a particularly large share of Pupil Support and Sites and Buildings.

That does not necessarily mean those programs rely heavily on consultants. Pupil Support includes transportation, while Sites and Buildings includes utilities, maintenance, snow removal, trash service, and other facility costs.

The object label alone does not explain the underlying service.

Supplies

The General Fund includes approximately $12.1 million in supplies.

Supplies are items consumed or used in district operations that are not classified as major equipment or capital assets.

Examples include:

• Textbooks and instructional materials
• Classroom and office supplies
• Custodial and maintenance supplies
• Fuel
• Technology supplies
• Other program materials

Supply spending is distributed across most program areas, with the largest amount appearing in Regular Instruction.

A reduction in “supplies” could therefore mean fewer classroom materials, lower fuel costs, delayed maintenance purchases, or another operational change. The effect depends on the program in which the reduction occurs.

Equipment and Capital

The General Fund includes approximately $15.1 million in equipment and capital expenditures.

This category includes major purchases and improvements expected to provide value over an extended period, such as:

• Heating, ventilation, and mechanical systems
• Technology equipment
• Vehicles
• Building improvements
• Large maintenance equipment
• Other capital projects accounted for in the General Fund

Most General Fund equipment and capital spending appears in Sites and Buildings and Regular Instruction.

This amount does not include all district construction spending. Larger projects financed through bonds or other designated sources are accounted for separately in the Building Construction Fund, as explained in Part 2.

Other Expenditures

The General Fund also contains approximately $1.6 million in net “Other” expenditures.

Depending on the program, this category can include:

• Dues and memberships
• Licenses and fees
• Taxes and assessments
• Indirect costs
• Other expenditures that do not fit the primary object categories

The negative amount shown within District Support Services represents internal charges or cost recoveries that offset expenditures recorded elsewhere. It does not mean District Support Services has negative total spending.

Across all district funds, the “Other” object is much larger because approximately $46.0 million in principal and interest payments is recorded in the Debt Service Fund.

This is another example of why the fund and program must be considered alongside the object. A districtwide “Other” total could appear to represent miscellaneous discretionary spending when most of it is actually legally required debt repayment.

Regular Instruction: $157.4 Million

Regular Instruction is the largest General Fund program.

It includes kindergarten, elementary, and secondary instruction, along with Title I, Title II, Title III, athletics, and student activities.

The district budgets approximately:

• $97.6 million in salaries
• $40.1 million in benefits
• $9.6 million in purchased services
• $5.6 million in supplies
• $3.7 million in equipment and capital
• $706,000 in other expenditures

Because athletics and activities are included here, “Regular Instruction” is broader than classroom teaching alone.

Special Education Instruction: $80.6 Million

Special Education Instruction accounts for services provided to students with disabilities.

It includes approximately $50.7 million in salaries and $21.0 million in benefits, along with contracted services, supplies, and other costs.

Special-education transportation is not included in this program. Those costs are reported under Pupil Support.

State and federal aid cover only a portion of the district’s special-education costs. The remaining amount must be supported with other General Fund resources.

Pupil Support: $47.4 Million

Pupil Support includes services that help students access and participate in their education.

This category includes:

• Counseling
• Health services
• Psychologists
• Social workers
• Regular and special-education transportation

The program contains approximately $17.3 million in purchased services, making services a much larger share of this program than of Regular or Special Education Instruction.

Transportation is a major reason for that difference.

Sites and Buildings: $36.7 Million

Sites and Buildings covers the operation and maintenance of district buildings and grounds.

It includes:

• Custodial and maintenance employees
• Electricity, natural gas, water, and sewer
• Trash and snow removal
• Repairs and maintenance
• Health and safety work
• Capital projects accounted for in the General Fund

Unlike the major instructional programs, Sites and Buildings devotes a substantial portion of its spending to purchased services, equipment, and capital improvements.

This is separate from the Building Construction Fund. Sites and Buildings includes ongoing facility operations and certain General Fund capital work, while the Building Construction Fund accounts for larger projects financed through bonds or other designated sources.

Instructional Support: $20.1 Million

Instructional Support includes resources that support teaching but are not reported as Regular Instruction.

Examples include:

• Assistant principals
• Curriculum and instructional offices
• Textbooks
• Media centers
• Staff development

The distinction between Regular Instruction and Instructional Support is important when evaluating how much the district spends “in the classroom.” Some services closely connected to teaching are reported outside the Regular Instruction category.

Administration: $12.1 Million

Administration includes:

• The School Board
• The superintendent’s office
• School principals’ offices

The district budgets approximately $12.1 million, or about 3.3% of General Fund expenditures, for this category.

Not every employee commonly viewed as an administrator is reported here. Assistant principals, for example, are included under Instructional Support.

District Support: $8.2 Million

District Support includes central functions that serve the entire organization, such as:

• Human Resources
• Information Systems
• The Business Office
• Districtwide liability insurance
• Workers’ compensation insurance

The district budgets approximately $8.2 million, or slightly more than 2% of the General Fund, for these services.

Vocational Education: $4.6 Million

Vocational Education includes career-focused instruction, primarily at the secondary level.

Programs may include agriculture, health sciences, business, and other coursework connected to career preparation. This category also includes vocational services for certain students with disabilities.

The district budgets approximately $4.6 million for these programs.

Fund Growth and Drawdown Are Not Expenses

Some budget presentations include “fund growth” or “fund drawdown” to make the flow of money visually balance.

Neither is an expenditure category.

• Fund growth occurs when revenue exceeds expenditures during the year.
• Fund drawdown occurs when expenditures exceed revenue and the difference is paid from an existing fund balance.

The reason for the change matters.

Spending previously issued bond proceeds on approved construction projects is a planned use of the Building Construction Fund. Using General Fund balance because recurring operating expenses exceed recurring revenue represents a different financial condition.

For 2026–27, the General Fund is projected to spend approximately $8.0 million more than it receives, while the Building Construction Fund is projected to use approximately $99.1 million accumulated for construction projects.

Those two drawdowns should not be interpreted in the same way.

Source: South Washington County Schools, 2026–27 Preliminary Budget, approved June 25, 2026.