Salem School referendum among dozens in state
By Jason Arndt
When residents in the Salem Grade School District cast their votes for an operational referendum in the April 4 general election, they are not the only taxpayers in Wisconsin, the Associated Press reports.
According to the Associated Press, about 65 Wisconsin public school districts have posed referendum questions, the report states.
For Salem Grade School residents, the school district seeks authorization to exceed revenue limits for non-recurring purposes for three years, for about $3 million.
The referendum looks exceed revenue limits by $870,000 for the 2017-18 school year, followed by $1,070,00 in each of the next two years.
At a March 16 referendum information meeting held at Salem Grade School, District Administrator David Milz reported the state budget formula has left the school with a loss of revenue.
“There are two main revenue sources for schools in the state of Wisconsin, the two sources of revenue are state aid and property tax,” said Milz, who states the less state the school receives, the more it needs from taxpayers.
With a loss of state aid, the school has to tighten its operating budget, which include faculty salaries, benefits, health benefits, transportation, technology and other expenses.
However, while the state funding formula, known as the revenue limit, has remained constant since 1993, the less the school can spend on operating expenses.
“For tonight, probably the most important item relative to the general operating budget or fund is the need for this referendum, is something called the revenue limit,” said Milz.
The revenue limit, he states, is based on resident student enrollment, which has reportedly declined, regardless of whether insurance rates and energy costs have increased, special education costs, among other items.
“None of that is taken into account for the state establishing that revenue limit,” said Milz. “That revenue limit is based on student enrollment, and Salem School, like many school districts throughout the state, we have declining enrollment and, therefore, because of that declining enrollment, our general operating budget has decreased.”
A tighter operating budget resulted in the school dipping into its fund balance, which he said, is a gauge for a school’s financial health.
Currently, the school reports a fund balance of $2.287 million, but projects to drop to $1.5 million in 2017-18, $524,561 for 2018-19, with a projected negative fund balance of about $720,000 in 2019-20.
Baird and Associates made the projections.
Faced with projected losses, Milz reports the school could short-term borrow to process payroll and other operating expenses in the summer.
“After the year 18-19, and the year 19-20, the fund balance is projected to go into the red, so that is the predominant reason we are looking at a referendum,” he said.
With some debt dropping off the budget from a 2008 building referendum, which made the school ADA accessible, school officials project no increase in taxes.
If the operational referendum passes, Salem School officials, with help from Baird Financial, expects the tax rate to remain unchanged at $7.73 from 2017-18 through 2018-19, before a drop in 2019-20 to $7.68 per $1,000 of equalized property value within the district.
However, if the operational referendum fails, Milz said the school could see an experience similar to 2008.
In 2008 and 2009, when an operational referendum failed, the school had to cut $1.16 million from its budget.
Despite a promise of no increase in taxes, some residents were reportedly skeptical about the implications of a failed referendum.
“If that means cutting programs, so be it,” said Jacob Zimmerman. “I don’t have the resources to give to the board.”
In response, Milz reportedly said the district already cut expenses in 2008, when 17 teachers received layoff notices.
“We have already experienced what you mentioned and it was devastating,” said Milz.
Two board members, Nick Pauloni and Lisa Hinze, reminded those in attendance the referendum is to maintain the same level of education and services.
“We are just trying to maintain the quality of education we already have,” said Hinze.
“All we are asking is to maintain that same level of excellence,” Pauloni said.
Since 2004, according to the Kenosha County Clerk website, there have been at least 16 school referendums, including two at Kenosha Unified School District.
As KUSD referendums received approval, about a dozen referenda questions failed in Western Kenosha County, the clerk’s website reports.