Shall the School Board of the Chequamegon School District be authorized to exceed the revenue limit under §121.91 of the Wisconsin Statutes in the 2012-2013 school year by an amount up to $380,000 and in the 2013-2014 school year by an amount up to $450,000 for the purpose of sustaining operating expenses?
⎕ YES ⎕ NO
It is our hope that this referendum fact sheet will help you to understand the referendum ballot and the reasons behind the decision to hold a referendum at this time. If you have any questions about the referendum you are urged to contact Dave Anderson, District Administrator (ext. 2427) or Lexi Witt, District Financial Manager (ext. 2425) at 715-762-2474. Additional information is available at the District’s website at www.csdk12.net.
Q. Why do we need to have a school district referendum?
A. The biennial state budget that was passed last summer resulted in cuts of $800+million from school aid. When the reduced total was run through the aid formula Chequamegon saw its consolidation incentive aid cut from $2,103,296 in 10-11 to 1,005,121.42 in 11-12. This, along with changes in the revenue limit formula has resulted in an approximate $1.4 million reduction in what the District could levy. Budget projections predict a budget shortfall of approximately $630,000 and $670,000 respectively in each of the next two years. The Board hopes to avoid having to make cuts of this significant amount through the passage of an operating referendum.
Q. What has the District done to address its budget shortfall?
A. The Board has imposed additional costs on employees consistent with changes in the law last year that result in employees seeing a reduction of 11-18% in take home pay. This year 3.2 full time equivalency (FTE) teaching positions were cut bringing the total staff reductions since consolidation to almost 15 FTE. In addition to the previously mentioned cuts, in December the Board approved the reduction of two teachers, a principal, the police liaison officer, and reductions in special education and cleaning support staff for next year. Also facing reductions for next year are extracurricular programs, classroom supply budgets, shuttles between the Glidden and Park Falls buildings and the food service program. These areas will face reduction whether or not a referendum is passed.
Q. What if a referendum doesn’t pass?
A. In addition to the budget reductions described above, the Board has made a number of additional budget reductions that will go into effect for the 2012-2013 year, but will be restored if a referendum is passed by the voters. The reductions, if the referendum does not pass, will result in less time available for music at the elementary level, less time available for physical education at the elementary level, no Family and Consumer Education at the middle school, higher social studies class sizes at high school (up to 32), no full time librarian at the elementary level, loss of some clerical support time, the start of deferred maintenance and the closing of the swimming pool.
Q. If the referendum is approved, how will it affect my property taxes?
A. The mil rate for 2011 was approximately $7.38 per thousand dollars of property value, a drop in tax rate of approximately 19% from 2010. Predicting mil rates can be uncertain due to factors beyond the control of the school board, such as assessed valuation of property. However, the operating referendum the Board has approved and asks the community to support would increase mil rate from the current $7.38 to approximately $7.70, an increase of 4.4% from the 2011 rate. The impact of moving the mil rate from $7.38 to $7.70 would be approximately an increase of $32.00 on a house valued at $100,000.
Q. Why not freeze pay or cut benefits to make up the shortfall?
A. Although a pay freeze is a possibility, the District still has to bargain base wage with employees under the new law. However a pay freeze would not cover the shortfall. Keep in mind we have already reduced take home pay by 11-18%. We are also looking at restructuring the health insurance in some way with a goal of $80,000 in savings while still being fair to employees. It is entirely possible such a restructuring could result in some additional cost to employees.
Q. Why not just raise taxes back to where they were last year?
A. First we don’t need to raise taxes to where they were last year. This referendum will raise tax rates by about 4% over this year’s rate but taxes will still be about 15% below where they were last year. Revenue Caps that are part of the state funding formula govern how much we may raise the tax rate. The state will only allow districts to exceed this revenue limit through a referendum. So the bottom line is that we cannot raise the additional revenue without taxpayer approval.
Q. Why is student enrollment declining?
A. Declining student enrollment is a trend that the vast majority of districts in the state have been experiencing for a number of years. It appears there are just fewer children being born in recent years. This is felt by school districts because state aid is based on the number of students.
Q. If enrollment is declining, shouldn’t expenses also decline?
A. School costs do not fall proportionately with enrollment for a number of reasons. First, there are expenses that the District has little control over that increase each year regardless of the number of students such fuel and utilities. Second, reducing the number of teachers cannot mirror exactly the decline in enrollment, because the decline is usually spread throughout the grades, For instance if the enrollment in a grade drops by three students there is little or no savings to the district. . However, over the last 9 years the student enrollment has declined by 25%, while District teaching staff have been reduced by 22%, so we have pretty consistently reduced staff as student numbers have gone down.
Q. Why doesn’t the District cut extra-curricular activities to save money?
A. If we cut all extracurricular offerings for students, sports and others, the total savings would be approximately $160,000. This is far below the deficit faced by the district and, as we all know, students who have a strong interest in sports may very well open enroll to another school district under the mechanism available to them under the law. If a few students move out of the district, the negative impact their loss would have on the state aid received would negate the savings. Students remain in school for a variety of reasons; and as you will recall when you remember your favorite areas of interest in high school, very often that did not involve a core academic area. Students who have an interest in technology education or family and consumer education or music or art or sports may be remaining in this district because of those very areas of interest. As we reduce those choices for students we may be encouraging their open enrollment out of the district to our financial detriment. We are, however, including extra-curricular offerings in the budget reductions by cutting them by 10% or $16,000.
Q. Why doesn’t the District just use the fund balance to cover expenses?
A. The fund balance has a couple important purposes. A healthy fund balance affects the bond rating of the district in a positive way but more importantly it reduces or eliminates the need for short-term borrowing for the payroll and other expenses during the year. The Chequamegon Board has made it a priority to build the fund balance to 30 % of the annual budget thereby eliminating the need to short-term borrow. This saves the district approximately $50,000 per year in interest costs. The budget shortfall for 2011-2012 will be covered by the fund balance due to that late timing of the notice on the cut in revenue. If we continue to cover budget shortfalls through the fund balance, within a few years we will have wiped out the fund balance. Using it is a short-term solution but not a long-term answer.
Q. Where can the public get more information?
A. The District is having a Public Information Meeting at the Glidden Campus on Tuesday, March 13 at 7:00pm. and one at the Park Falls Campus on Monday, March 26 at 7:00pm.
We are also doing short presentations for community groups. If there are any groups that would like to schedule representatives from the District to come to a meeting, please contact Pam Steger, 715-762-2474 ext. 2229. We will be happy to come review the referendum issues and answer any questions.