A Score of School Districts Look to Ease Budget Woes with Referenda Today

If 30 students per year were to leave a large school district like Milwaukee it would hardly raise an eyebrow. But when it happens in a district like northern Wisconsin’s Three Lakes with a total enrollment of 701, the results can be devastating.

Because the state imposes revenue limits on schools based partly on enrollment and the prior year’s spending, Three Lakes will lose about $789,000 in levy authority for the 2004-2005 school year, says the district’s administrator George Karling. The district had a budget last year of about $6.2 million.

“Revenue limits alone are a killer,” Karling said. “With declining enrollment it’s twice as bad.”

State law allows for districts to exceed revenue limits through referendums, but convincing already high-taxed Wisconsin voters to pass one can be challenging. According to DPI data, just over 50 percent of all referendums since 1998 have failed.

Voters in Three Lakes and more than a score of Wisconsin school districts will be asked to decide upon school spending referenda today. Most are to close projected budget shortfalls with others attempting to win approval for facility improvements and construction. In February, 14 districts put forth resolutions, some multiple, with all but seven of 22 passing.

While revenue caps can make school budgeting tough, the requirement to go to referendum to exceed them can be a good way to curb uncontrolled spending, said Cameron Sholty, Wisconsin director for the taxpayer advocacy group Citizens for a Sound Economy.

Sholty pointed to a recent failed $19.8 million referendum in Menomonee Falls. “The people I’m talking to, there’s a concern for such huge expenditures,” Sholty said. “What makes school districts unique is that they go to referendum. Voters have a say in what directly affects them on the local level.”

Three Lakes tried to pass a referendum in November, and it failed 2-1. Karling said he believes it had to do with the lack of a sunset clause, which is included in the new referendum, and because voters were not well educated about the problems the district faced.

“A lot of people took it for granted that it would pass so they didn’t come out to the polls,” said Karling.

Karling is hoping a modified referendum will pass today. The referendum asks for $633,000 per year ending in three years, and a citizen’s committee has been working to encourage an affirmative vote. If the referendum fails, Karling said the district will look to cut up to eight teaching positions and reduce athletic programs.

Barb Brady, Wisconsin Education Association Council press secretary, said districts statewide have been having trouble and need more funding to maintain the current level of educational quality. Some school districts are “finally getting to the point where there is no place left to cut,” Brady said.

Brady said the current school finance formula is no longer adequate to keep up with increasing costs and in addition, the state has abandoned its two- thirds funding commitment. School districts “are not getting as much as they have in the past,” Brady said.

Districts are “struggling to keep education quality where it’s been,” Brady said. “We just don’t know how long it’s going to continue.”

The Department of Public Instruction has recognized the problems school districts are facing, and DPI spokesman Joe Donovan said the Governor’s Task Force on Educational Excellence is looking into ways to address them.

“I think across the board school districts are struggling right now, especially in these tough economic times,” Donovan said. “We see a need to take a look at methods we use so we can adequately fund Wisconsin’s schools.”

Donovan said it’s important to look at ways to ensure Wisconsin has the highest quality public schools-from pre-kindergarten through college. “Education is the best investment our state can make,” Donovan said.

The Governor’s Task Force is a group of educators, administrators, business leaders and others. The group is comprised of four subcommittees, which analyzed four areas of concerns and have made recommendations. The subcommittees filed their final reports March 30, which now go to the full task force for approval and compilation into a final report to be released late spring.

The subcommittees made a series of recommendations, but few directly address the state’s funding caps. Some relief may come from a recommendation to raise the accounting of summer school enrollment to be counted as half a student, instead of the current rate of 40 percent. This would allow some districts to raise their revenue limits, and may encourage higher summer school enrollment.

Another recommendation calls for increased aid to fund special education, which may bring relief to some districts.

Funding is not the only problem facing Wisconsin schools. Teacher recruiting and retention is suffering, a fact many attribute to the Qualified Economic Offer, which caps teacher salary increases. A subcommittee charged to address the issue recommended the repeal of the QEO. If implemented, this would likely lead to increase teacher salaries, placing further strain on districts’ budgets.

Discussion of the broader funding problems is under way though, said Bruce School District Administrator Debra Brown, who sits on the task force. Brown said the issue would be taken up by the full task force soon. “Everyone felt it was such a major issue that the group felt everyone should be involved in that.”

Brown said the task force has been collecting a lot of information on the issue and has been reviewing several proposals. See the proposals here: http://www.wasbo.com/Glossary/Glossary%20Proposed%20School%20Finance%20Plans_1.htm

Scott Johnson, administrator for the Siren School District in northwest Wisconsin, said the state’s funding formulas need to be changed. Revenue limits have not kept pace with increasing costs fueled partly by surging rates for liability insurance, health insurance and energy, Johnson said. Adding to the problem is the district’s declining enrollment which drives revenue limits down, but does not necessarily reduce costs.

“You can’t diminish your staff because of a few kids. The same amount of work has to be done,” Johnson said. “You start seeing this escalating gap occur.”

Voters rejected a referendum in February to raise the revenue cap by $250,000. Since then, plans have been made to cut several athletics programs, foreign language instructions, driver’s education, one teacher, a guidance counselor, and several other positions for next year.

Siren has a new referendum on the ballot for today. With voters more knowledgeable about the effects of the budget shortfall and a higher-than- expected turnout, Johnson says he thinks the resolution will pass. Regardless, the district will still experience cuts, Johnson said. “The cuts are in place; the damage is done,” Johnson said. “The question is what will we be able to bring back.”

Small districts aren’t the only ones complaining. The Racine Unified School District, which serves 21,500 students, is also facing a budget crunch and is presenting voters with two referendums today, asking for $3.5 million and $3.7 million for operating expenses over the next two years and another seeking $4.5 million for two years for facilities renovation. Both referenda are renewals of previously approved referenda increased for inflation.

According Linda Flashinski, the district’s public relation’s officer, Racine schools are facing a $10.5 million budget shortfall for the 2004 – 2005 school year, with further projected shortfalls for subsequent years. The operating cost referendums would close about a third of the gap with staffing cuts and a new teacher’s contract which freezes salaries making up for the rest. The maintenance referendum “would cover the cost of our most urgent needs,” said Flashinski. “We have aging facilities which need continuing repair.”

According to newspaper reports, the district has already lost 54 teachers. The referenda, if approved, would raise property taxes by about $22 on a $100,000 home.

Since the inception of revenue caps, Flashinski said, the district has made $33 million in cuts over the past 10 years. “Revenue caps do not keep pace with inflation,” and other cost which have risen faster than the rate of inflation, Flashinski said.

If not approved, the district would face deeper cuts. “The need to further reduce the budget after 10 years of reductions would impact negatively on education in our community,” Flashinski said.

See the list of Today’s referenda: http://www.dpi.state.wi.us/dpi/dfm/sfms/xls/ref4web.xls
The Governor’s Task Force on Educational Excellence http://edexcellence.wisconsin.gov/index.asp