Where Does the Money Go? A Closer Look at St. Maries School District #41 (Updated)

A reader recently contacted the Beacon with a question that deserves a closer look: How much money does St. Maries Joint School District #41 actually receive per student when all state, federal, local, and grant funding is included? And if enrollment has been declining, why has funding continued to increase?

We reviewed a financial analysis covering fiscal years 2020 through 2025, based primarily on the district's audited financial statements and public education records. The numbers reveal a substantial increase in funding, but they also tell a more complicated story than the totals alone might suggest.

Fewer Students, More Funding

According to the district's financial records, enrollment declined from 974 students at the beginning of the 2019–2020 school year to 874 at the beginning of 2024–2025. That's a decrease of approximately 10% in five years.

Over that same period, the district's total annual governmental-fund revenue increased from approximately $10.2 million to $18.7 million — an increase of 83%. However, the larger figure includes nearly $4.7 million in identified state and federal funding for building improvements.

When those two identified FY2025 building-related funding amounts are excluded, the increase is considerably smaller.

| Financial measure | FY2020 | FY2025 |
|---|---:|---:|
| Beginning-of-year student enrollment | 974 | 874 |
| Total annual governmental-fund revenue | $10.2 million | $18.7 million |
| Revenue excluding two identified building-related grants | $10.2 million | $14.0 million |
| Revenue per enrolled student, excluding those grants | $10,479 | $16,014 |
| General Fund revenue per enrolled student | $9,160 | $12,273 |

These per-student figures divide annual district revenue by beginning-of-year enrollment. They are not the same as Idaho's average-daily-attendance funding calculations or published per-pupil expenditure figures. The comparison excluding building grants removes two identified FY2025 construction-related revenue amounts. Other restricted revenues remain included, meaning the resulting figure should not be interpreted as unrestricted funding available for classroom operations.

What does this mean?

Even without those two building-related grants, annual revenue per enrolled student increased approximately 53% over five years.

But inflation also matters. Using national Consumer Price Index annual averages for 2020 and 2025, consumer prices increased approximately 24.4%. After adjusting for inflation, the increase in revenue per student, excluding the identified building grants, was approximately 23%.

Meanwhile, General Fund revenue per enrolled student — more closely associated with operating the schools — increased approximately 8% after inflation.

In other words, the district reported more annual revenue per enrolled student, even after accounting for inflation. However, the increase in General Fund revenue was much smaller than the increase in total district-wide revenue. These figures also describe a five-year trend. They do not mean that the district's operating revenue increased steadily every year or that its recent budgets have been free from financial pressure.

Where Is the Money Coming From?

School funding comes from several different sources, and not all of that money can be used for the same purposes.

In fiscal 2025, the district reported approximately:

- $8.79 million in state revenue recorded in the General Fund, which supports ordinary school operations.
- $871,000 in additional state revenue recorded in other district funds, excluding school-modernization funding.
- $3.96 million in state school-modernization revenue designated for facilities.
- $2.79 million from local sources, including property taxes and other local revenues.
- $1.55 million in federal revenue recorded outside the district's capital-project funds.
- $723,000 in federal capital-project grant revenue associated with energy improvements.

Together, these sources accounted for approximately $18.68 million in governmental-fund revenue. These figures represent revenue received or recognized in different district funds, not a single pool of money available for classroom operations. Some funds are restricted to particular purposes, and their inclusion in district-wide totals does not mean they can be redirected to pay for teachers, classroom supplies, or other everyday expenses.

One important distinction: the local revenue category includes more than property taxes. It would be inaccurate to describe all $2.79 million as taxpayer levy revenue. The district's audited government-wide financial statements also report that property taxes classified as "general purposes" declined from approximately $2.13 million in FY2020 to $1.79 million in FY2025, a decrease of approximately 16%. This accounting category should not be confused with the district's voter-authorized supplemental levy amount or with General Fund tax revenue reported under a different accounting presentation. Most of the growth in total revenue came from state funding, including substantial funding for facilities, along with federal grants.

Why Can't Building Grants Pay for Teachers?

This is one of the most important distinctions in the financial records.

The district has received significant funding for school improvements, including state modernization money and federal energy-efficiency grants. These funds are designated for purposes such as heating and cooling systems, windows, siding, and other building improvements. They generally cannot be redirected to cover teacher salaries, classroom aides, transportation, or extracurricular programs. The district has also reported a federal energy-improvement grant of approximately $14.9 million and a separate state grant of approximately $1.59 million for a career-technical building.

As these projects move forward, they may substantially increase the district's reported revenue and expenditures without increasing the money available for ordinary classroom operations. This is why looking at the total amount of money coming into a school district can be misleading without examining how that money is restricted.

Where Is the Money Being Spent?

According to the financial review, the district's annual expenses increased approximately 44% between 2020 and 2025.

Instruction remained the largest expense.

The district's 2025 financial statements show approximately:

| Spending category | Annual spending |
|---|---:|
| Classroom instruction | $7.66 million |
| Building maintenance and custodial | $1.20 million |
| School and business administration | $1.18 million |
| Student transportation | $957,000 |
| Student support, including counselors and nurses | $926,000 |
| Child nutrition | $782,000 |
| Staff support, libraries and technology | $524,000 |
| General administration | $508,000 |
| Other expenses | $726,000 |

These figures represent district-wide expenses using an accounting method that differs slightly from the governmental-fund totals. Instruction accounts for approximately 53% of these expenses.

Several categories increased faster than instruction over the five-year period, including student support, staff support, maintenance, and food services. These increases are worth examining, although the financial records alone do not establish whether individual expenditures were necessary, excessive, or avoidable.

Why Do Costs Rise When There Are Fewer Students?

Part of the explanation involves the practical realities of operating a rural school district. A school with 25 fewer students may still require the same building, heating system, teachers, custodians, and bus routes.

In SD41's case, students are spread across multiple schools and a large geographic area. UpRiver Elementary, for example, serves a relatively small student population approximately 28 miles from St. Maries. If enrollment declines gradually across different grade levels, the district may not be able to reduce expenses proportionately without changing its facilities, staffing, transportation, or educational programs. Other factors include rising wages, employee benefits, maintenance expenses, and changes in state funding.

The district's more recent budget records also show that General Fund revenues have remained relatively stable while some operating costs, including employee benefits, have increased. However, the available financial records do not establish precisely how much each factor contributed to the longer-term increase in expenses.

What About Our Property Taxes?

The district currently relies on a voter-approved supplemental levy to help fund programs and services not fully covered by other revenue. The existing levy authorization is approximately $2.07 million annually.

On November 3, voters will consider a replacement levy of $2.488 million annually for two years, approximately 20% more than the existing authorization.

According to the district's itemized levy resolution, the proposed annual funding would support:

- $552,000 for extracurricular programs and athletics.
- $522,500 to help keep UpRiver School operating.
- $240,500 for music, band, and art instruction.
- $497,800 for career-technical education and college-ready programs.
- $567,000 for classroom and district support staff.
- $107,500 for preschool programming.

These are the district's projected allocations for the proposed levy. The district estimates that the proposed levy would increase the tax rate from approximately $1.21 to $1.59 per $1,000 of taxable property value. That represents an estimated additional $38 annually for every $100,000 in taxable assessed value. The actual amount paid by individual property owners depends on their taxable property value and applicable exemptions.

An important point is that the district's existing supplemental levy has not increased in its authorized annual dollar amount for many years, even as state funding and operating expenses have changed.

Is the District Building Up Savings?

Not according to the General Fund balance reported in the 2025 audit. The district ended fiscal 2025 with approximately $997,000 in its General Fund balance, a decrease of about $478,000 from the previous year. That represents roughly one month of operating expenses. The district therefore reported higher revenue per enrolled student over the five-year period while also drawing down its operating reserves in the most recent year. This does not, by itself, explain every spending decision. It does indicate that increased revenue over a longer period has not necessarily translated into a growing operating reserve.

What Questions Still Need Answers?

The available records establish that enrollment has declined and that reported revenue per enrolled student has increased over the five-year period. They also show that a substantial portion of the increase in total revenue came from state funding and restricted grants, rather than increased general-purpose property-tax revenue. At the same time, the district's recent budget information provides additional context about operating pressures that are not fully apparent from the longer-term totals.

Several questions would benefit from further clarification:

1. How much of the increase in operating expenses went toward employee salaries and benefits, and how much resulted from state-mandated compensation changes?
2. How have actual staffing levels changed as student enrollment has declined?
3. What are the operating costs per student at each school, particularly smaller rural facilities?
4. How does the district plan to address its reduced General Fund balance?
5. What specific costs and funding alternatives were considered in developing the proposed supplemental levy?

These are reasonable questions for public officials to address, regardless of one's position on school funding or the upcoming levy.

The Bottom Line

Yes, SD41 has fewer students and reported substantially more annual revenue per enrolled student in FY2025 than it did in FY2020. But not all of that increase represents additional money available for everyday education.

Special building grants account for a significant portion of the increase in total revenue. Inflation accounts for another portion of the increase in operating costs. Rural transportation, buildings, staffing, and educational programs create expenses that do not necessarily decline alongside enrollment. The district's more recent financial information also shows that increases in total revenue over five years can coexist with relatively flat operating revenue and rising costs in recent years. At the same time, changes in state funding and the district's expenditures deserve continued public examination.

The financial records provide a starting point for that discussion, but they do not independently establish whether the district is spending too much, too little, or exactly what is necessary. For taxpayers, parents, educators, and school administrators alike, understanding where the money comes from — and where it actually goes — is an essential part of making informed decisions.

The Beacon takes no position on the November 3 supplemental levy. Our purpose is to provide our community with accessible financial information and encourage informed public discussion.

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Sources: St. Maries Joint School District #41 audited financial statements for fiscal years 2020 and 2025; district supplemental levy resolution and budget information; Idaho Department of Education public school finance records; Idaho Report Card enrollment data; and federal grant audit records. Financial figures are drawn from the October 25, 2026 SD41 Funding Review and subsequent reconciliation of the district's audited statements.

Editorial clarification — October 26, 2026: Following additional information provided by St. Maries Joint School District #41, the Beacon clarified the distinction between governmental-fund revenue, General Fund operating revenue, and restricted construction-related funding. We also clarified the methodology used for per-student calculations and the audited accounting category used for the general-purpose property-tax comparison. The original five-year revenue comparisons remain unchanged.