Wednesday, November 14, 2018

Bangor school district seeks support for referendum

The Bangor School Board held an informational meeting last week regarding the district’s non-recurring operating referendum for 2019-2022. The purpose of the meeting was to share information about the need for the referendum.

According to Superintendent Dave Laehn, the 2016-19 referendum will expire at the end of the school year. The new referendum would also end after a specified three year time period and the district is asking the community for $800,000 in both 2019-20 and 2020-21 and $900,000 in 2021-22; the same amount as the previous referendum.

The monies will be used to maintain current programming and services for Bangor students as well as to maintain current staffing to support programming.

“In any school district 75 to 80 percent of a district’s budget goes toward staff salaries and benefits,” Laehn said. “So, it’s about maintaining staffing to offer programming for our kids.”

The funds would also help to maintain and update the district’s facilities and continue upgrades to the schools’ security systems.

“We are so lucky in this community to have such wonderful facilities. Unfortunately, when budgets become tight the first thing that’s put on hold is maintaining facilities,” Laehn explained. “It’s just the reality because the kids come first.”

According to Laehn, revenue caps having been in place since 1993 as well as the same state funding formula minus two-thirds funding have caused the need for a referendum.  He added that funding expenses and revenues do not match and increases in per pupil aid have been sporadic with a growing reliance on property taxes to fund schools.

“When you look at our revenue cap, approximately 60 percent is state aid, the rest is local property tax levy. When revenue caps were put in place many years ago, Tommy Thompson made a promise that all districts would be funded at least two thirds,” he added. “When things started to get tight in the early 2000s, they took that piece away and that’s why you’re seeing more and more reliance on property taxes to fund school districts.”

For many years, the Bangor School District has had a revenue limit between $6 million and $6.3 million. In 2007-08, 79 percent or $4.7 million of the revenue limit was state aid, since then it has been steadily declining. In 2017-18 it dropped to $3.9 million, which is 62 percent.

Since 2009, the district is receiving approximately $800,000 less in state aid each year, which is what they will be asking for with the referendum. In 2017-18, the revenue limit was $6,304,304 and Bangor received $3,909,119 in state aid.

“We try to be very responsive to our tax payers and keep our expenses in line as much as we can but just like a lot of districts right now, we have to ask our tax payers for support,” Laehn said. “We’re not looking to add anything. This is an operational referendum to help us keep the doors open and run the programming and services.”

Laehn added the wants/need/expectations of the students have increased and there are a lot of options for kids now. With expanded open enrollment, if there are programs or classes unavailable to students at small districts like Bangor, students may transfer to bigger schools with more options.

“Parents want their children to have the best, which they should have,” Laehn said. “With more options come more expenses. We’re a small school battling bigger schools, it's tough to compete sometimes.”

From 2001-2006, over 350 districts ran referendums to exceed the revenue cap. This November, 82 school districts will go to referendum including Hillsboro, Holmen, Onalaska and West Salem with more going to referendum in April.

The district has been seeing a declining enrollment trend. In 2002-03, enrollment in Bangor was at 693. It has since declined to 595 last school year.

“We’re never going to be a district that will suddenly have 70 new kids come into our school. That doesn’t happen in a small school,” Laehn said. “The big thing with revenue caps, if you can maintain or increase enrollment, it is of benefit to your district.”

In order to determine how much to ask for at referendum, the district consulted with Baird, a financial services company out of Milwaukee. The Baird forecast model assumes the enrollment growth will be flat.

“We would rather be conservative and be pleasantly surprised if our enrollment goes up versus if we think our enrollment will go up by 10 students and then if that doesn’t happen then that forecast model is less reliable,” Laehn explained.

The forecast model also assumes the valuation of property will grow at state levels and state aid will remain at current percentage levels. The per pupil increases are forecasted to be at $0 for the next three years in terms of state aid.

All of these assumptions are based on current staffing and historical expenditure data. Laehn said, “This model tends to be conservative.”

Without a referendum, Baird projected the district would be in a deficit of $840,000 expenses over revenue by 2021-22. With the approval of a referendum, the district would have a forecasted surplus of $59,000 by 2021-22.

“We do have a fund balance like all districts in the state of Wisconsin and periodically if you absolutely need to you can tap into that fund balance but it is truly a slippery slope,” Laehn said. “You don’t want to do that. It’s like your savings account, once in a while you might have to but you certainly don’t want to do it as a matter of practice.”

If the referendum were to fail, the district would need to begin making cuts in the budget. A majority of the cuts would come from staff salaries and benefits as well as services over the next three years. Smaller cuts would include putting off maintenance on the buildings or using fewer supplies in the classroom.

“There would be a loss of students due to fewer offerings and less programming and an additional loss in state aid due to state aid being based on enrollment and spending,” Laehn explained. “That’s not to threaten anybody, that’s just a reality.”

The current school mill rate is 10.41. The projected tax impact of a non-recurring referendum on $100,000 of valuation would be 10.53 in 2019-2020 with a cost of $12, 10.15 in 2020-2021 with a cost drop of $26 lower and 10.53 in 2021-2022 with a cost of $12.

“The total cost of a three year referendum compared to the current one would be a -$2,” Laehn explained. “Again, that is based on the projection model by Baird and historically they’ve been pretty accurate.”

 

 

 

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