In addition to the basic formula allowance, school districts receive money from the state (or federal government passing through the state) for other reasons. This money is called Categorical Aids. School districts get additional aid based on the number of students they have who live in poverty or who require special education or English Language Learning services (Basic Skills), for being small or geographically isolated (Sparsity), or for having low property tax revenue (Equity).

The state or federal government can mandate that school districts provide certain services without providing funding for those mandates. These are called unfunded mandates. Special Education is a service that was mandated by the federal government with the assurance that 40% of the cost would be federally funded.  Instead, the federal government has never paid more than 17% of the costs. School districts are forced to divert dollars from the general fund to cover the costs of unfunded mandates.