What is an Operating Levy? An operating levy is a voter-approved funding source that helps pay for the day-to-day costs of educating students. Operating levy funds support teachers, classroom instruction, student support services, technology, academic programs, activities, transportation, and other operational expenses.  Unlike state funding, operating levy dollars are generated locally and help school districts maintain programs and services when state funding does not keep pace with rising costs.  For taxpayers, an operating levy is calculated based on the value of a home, garage, and one acre of land surrounding the residence. Agricultural land beyond the home site is not subject to the operating levy. This means that for most farmers, the levy applies only to the residential portion of their property, not their farmland.   What is a Building Referendum? A building referendum, often called a bond referendum, is a voter-approved funding source used for major facility projects. These funds can be used for building construction, additions, renovations, roofs, parking lots, safety improvements, and other long-term capital needs.  Building referendum funds cannot be used for teacher salaries, classroom programs, or daily operating expenses.  Unlike an operating levy, a building referendum is generally based on the value of all taxable property within the district, including agricultural land, commercial property, and residential property. As a result, the tax impact and who pays for the referendum can be significantly different than an operating levy.