When a rural Idaho school’s heating system fails during a February cold snap, there’s no time to organize a bake sale or wait for emergency funding. This practical reality—faced by educational leaders across our state—illustrates why school district fund balances serve an essential purpose. Recent headlines about “$712 million socked away by schools” tell only part of the story. As Director of the Idaho Rural Schools Association and Associate Executive Director of the Idaho Association of School Administrators, I represent the voices of superintendents, principals, special education administrators, and education leaders throughout Idaho who make careful financial decisions every day. On their behalf, I’d like to share additional context behind these numbers that may help explain why these fund balances exist—even for those who rightfully question how education dollars are allocated across our state.

The characterization of these funds as simply “stashed away” fundamentally misunderstands the critical role reserves play in responsible school district management. Throughout my 31 years in Idaho education, I’ve witnessed firsthand how economic booms and busts, funding freezes, and formula changes profoundly impact our schools. During the devastating 2008-2009 recession, I served as a superintendent facing unprecedented budget cuts and agonizing decisions about programs and personnel. Those experiences cemented my understanding of why prudent financial planning isn’t optional—it’s essential.

These fund balances serve as critical financial tools that enable districts to:

• Manage cash flow throughout the year, covering payroll and operational expenses while state funding and property tax revenues arrive at irregular intervals.
• Respond promptly to emergencies—when a boiler fails in January, a roof leaks after heavy snowfall, or an HVAC system breaks during extreme temperatures, immediate repairs are non-negotiable for student safety.
• Accumulate savings for necessary large expenditures without incurring debt, from facility renovations, bus replacements, equipment purchases, to curriculum updates.
• Maintain favorable bond ratings that secure lower interest rates, saving taxpayers significant money over time. Districts with healthy fund balances receive better Moody’s and S&P ratings, resulting in lower interest rates on bonds.
• Buffer against enrollment fluctuations that can dramatically impact state funding, especially in rural communities where even small population changes can significantly affect budgets.

Consider Mackay School District, serving a community of approximately 500 residents, which maintains a reported reserve of 43% of their annual budget. What might appear excessive at first glance becomes prudent when you consider that a single broken water main could deplete half their savings overnight. What registers as a manageable expense for Boise becomes an existential financial challenge for Mackay.

Financial experts and school district auditors consistently recommend that schools maintain reserves of 25-33% of their annual budget—sufficient to cover three to four months of operations if unexpected circumstances arise. Idaho districts, with a median reserve of 29%, fall squarely within these professional guidelines. Far from excessive, these fund balances represent standard financial practice for educational institutions.

When Prairie Elementary shows a 149% reserve ratio, this reflects the reality of their minimal $223,674 total budget, where even routine repairs could consume everything they’ve managed to save. Rural districts often need proportionally larger reserves due to their smaller budgets, greater distance from services, and increased vulnerability to unexpected expenses and enrollment fluctuations.

We sincerely thank our legislators for their commitment to education through increased funding for teacher and staff salaries. These investments are crucial for attracting and retaining quality educators across our state. However, we must also highlight the pressing need for additional operational funding to address rising costs in transportation, maintenance of our facilities, utilities, and other essential services that directly impact student learning environments.

For districts unable to pass supplemental levies, these fund balances provide critical stability when operational funding proves uncertain or insufficient—allowing continuity of educational services without immediate program cuts or staffing reductions.

Behind every fund balance is a story of responsible planning. It’s the rural principal ensuring students won’t miss school during the next February cold snap, the superintendent maintaining educational stability when enrollment fluctuates, and the school board addressing facility needs without additional tax burdens. These aren’t just numbers on a spreadsheet—they represent security and continuity for Idaho’s students.

Fund balances reflect sound financial management in action, allowing districts across our state—from the smallest one-room schoolhouse to our largest urban districts—to weather uncertainties, respond to emergencies, and plan for the future. The Idaho Legislature follows this same prudent practice by maintaining several rainy day accounts. These state-level reserves serve the identical purpose as school district fund balances—providing financial security during economic downturns, revenue shortfalls, or when unexpected expenses arise. School districts are simply practicing at the local level the same responsible fiscal management that our state government wisely implements statewide. This isn’t excess; it’s exactly what responsible stewardship of our educational system looks like in practice. Idaho’s children deserve nothing less.