Spencer School Board approves budget

The Spencer School Board approved a budget last Wednesday that is expected to result in a mill rate of 8.31, which is a 7.6% decrease from last year’s rate of 8.99. The mill rate represents $8.31 in tax per $1,000 of property value, and would equal $831 in taxes on a $100,000 home.

Mill rate Residents will not necessarily see a decrease in their overall tax bill, however, because property taxes also include amounts levied from one’s local municipality, county, and technical college district. Also, the Spencer School District saw an almost $57 million increase in total equalized property value from last year to this year, from $437 million to $493 million. Therefore, if an individual’s property significantly rose in value, that could negate the savings that would have been realized from a lower mill rate.

As an example, if a home was estimated at a value of $100,000 last year, that homeowner would have paid about $899 in school tax. However, this year that home would be worth $113,046, when using the average district growth in property value of 13.05%. Therefore, this year the property owner could expect to pay $939 in property tax, a $40 increase, even when factoring in the lower mill rate.

District Administrator Jason Gorst noted that last year, some residents had expressed concern after seeing a dramatic increase in their taxes owed to the school district, but this year it should not be as dramatic.

“Last year, we did have a pretty big increase in our total levy. And that was a combination of referendum money, the way reassessments hit and taxes were reallocated, and then on top of that, last year we did not get a big increase in state aid,” said Gorst.

Last year, the total levy increased by 16.7% from the year before and the mill rate increased by 12%. Certain areas of the school district felt that uptick to a greater extent. For example, the town of Unity saw a 35.2% jump in its tax levy from the year before, the town of Sherman saw a 26.7% increase, and the town of Brighton experienced a 22.1% increase.

With the help of about $200,000 in additional state aid, those percentages are projected to come down.

This year, the total levy is expected to increase by 4.5% and the mill rate will actually drop by 7.6%. The townships mentioned before will not see nearly as dramatic a percent change from last year’s levy. The town of Unity will have a 13.2% increase in tax levy from last year, the town of Sherman a 13.7% increase, and the town of Brighton a 6.7% increase.

Gorst was careful to specify that the mill rate was still a projection, because it will be dependent on the district’s final membership number, which is calculated off of the third Friday count in September and taken as an average of the past three years.

BUDGET CHANGES BY FUND Gorst pointed out a number of factors that had a bearing on the budget, including personnel changes, newer initiatives for the district, and fluctuations in state aid. Going fund by fund, the following numbers have been set.

Fund 10 (general fund) The district has budgeted for $12,409,925 in revenue and $12,409,925 in expenditures in Fund 10, for a balanced budget. That will leave the fund balance at $3,077,428.89, which is about 25% of total annual expenditures. This meets the recommendation of financial planning experts that districts maintain a fund balance that would cover two to three months’ worth of expenses.

Revenues The district will levy about $45,000 more in taxes this year, with a a total tax levy of $3,402,334. That is about 27% of the Fund 10 budget.

Getting into the specifics, the district lost its Spanish teacher this year, who had been teaching a number of distance learning classes, and thus will miss out on more than $27,000 in revenue from CESA.

“We did not replace that position, so you do see that loss of revenue there. But the hope is, after a year, we will maybe try to rebuild the position,” said Gorst.

In terms of state aid, the district had a $6,500 decrease in declining enrollment aid, but gained $195,000 in general aid.

“This was a very positive one for us in the sense that it went up 3.76%. We got a higher percentage of state aid that

Please see Spencer school, page 8 will come in this year. That is a hard thing to predict overall, year over year, because so much of it comes down to what the houses are being assessed at and things of that nature. What that then turns into is that means it’s that much less we will have to tax our taxpayers if we were to use our full revenue limit authority,” said Gorst. “Last year our citizens saw a pretty hefty tax increase, in large part because we did not get that increase in state aid much last year. It was significantly smaller. So it will soften any tax increases that take place.”

The district also will have a decrease in Title funding of about $16,500.

“We spent a lot of those funds up, so there’s less carryover there,” said Gorst.

The district also received about $41,000 from Medicaid claims last year but only budgeted for $15,000 this year. School districts receive money from Medicaid claims to help pay for health services for eligible students, including those with disabilities or from low-income families. Schools are required to provide services like physical, speech, and occupational therapies, mental health support, and health screenings, so this funding offsets those costs.

“That one’s always really hard to judge. Our director of business services, Eric Craft, tries to budget conservatively for us, our worst-case scenario. And then it ends up playing out well in the end,” said Gorst.

The district also expects to have about $7,000 more in Rural Energy For America Program (REAP) funds available, to use for curriculum and professional development.

Also, the district does not expect to get any E-Rate funding this year, which goes toward technology, as it will have to wait for the next round of reimbursement. That will be $11,500 less coming in.

Expenditures On the expenditures side, the district will have a roughly $300,000 increase in instructional costs. A large portion of that is tied to the wage increases the board approved.

The district will also have a $631,000 increase in “support sources.” Within that category are subcategories of “general administration,” “business administration,” “other support sources,” and “instructional staff services.” Gorst explained the increases in these subcategories. “General administration” costs will go up by about $158,000, which Gorst said was due to adding a dean of students position. The district will see a $128,000 increase in “business administration” costs, which includes Burnett Transit and Dashir facility management services. “Other support services” refers to technology costs, and the district will see an increase of about $66,000 in that area.

“For a long time we have been using ESSER [federal Covid-19 relief] funds to offset our technology costs. Those funds are all gone now so we have to use a bigger part of our budget to cover those,” said Gorst.

One category the district plans to spend less in this year is non-program transactions. This category include activities not directly related to student instruction. The district will spend about $709,000 less in non-program transactions, mainly due to not transferring as much from the general fund into other funds. These other funds — such as the capital projects fund, food service fund, and community fund — will see their balances depleted but it will enable the school district to balance its budget overall. The district will transfer about $882,000 less from the general fund into other funds, but will spend about $180,000 more on instructional service payments, which includes open enrollments, distance learning, and purchased instructional services. The district will also save about $6,000 in “other non-program transactions.” That is how one arrives at the $709,000 number.

To summarize, between staffing, facility, and technology costs, the district expects to see about a $931,000 total increase in expenditures this upcoming budget year. However, the district will make that up through a net increase of $222,000 in revenue — between the $200,000 increase in state aid and $45,000 more in property taxes, minus less aid in other categories — and spending $709,000 less in non-program transactions, by drawing from each individual fund balance to pay for things like building projects, the daycare, and the food service.

“When we talk about transfers at the end of the year, right now we are anticipating a $95,500 Fund 46 transfer. And what that transfer will be mostly earmarked for is our regular roof replacements and parking lot replacements. One of the reasons we’re doing it that way, is with those being summer projects we run into issues of where does the fiscal year fall and where do those payments need to come in. If it’s coming out of Fund 46, it’s very easy to cut those payments at any given point; you’re not as worried about the fiscal year [which starts July 1 for school districts]. So the practice that we will be using, we will identify those as a Fund 46 transfer and as the year progresses, as we see how things shake out and what comes in for expenditures and revenues, if everything’s looking good we make that transfer and it’s earmarked for that,” said Gorst.

Capital projects fund (Funds 41,46, 48, 49) This fund has a projected beginning fund balance of $2,947,082.16 and ending balance of $2,131,844.84, for a decrease of $815,237.62.

Food service fund (Fund 50) This has a projected beginning fund balance of $85,086.80 and ending fund balance of $35,638.04, for a reduction of about $50,000.

“We’ve had a lot of great discussion about our food service department. We’re doing a lot of things with it and we are budgeting higher for it. We’ve changed some staff, added a person, and changed some contract lengths. We’re doing a number of things within our kitchen. So we are budgeting a little higher in Fund 50 than we typically would, and we are hoping to also capture more revenue, just more kids eating, more reimbursables that come out of that.And we are charging for breakfast this year,” said Gorst.

Community service fund (Fund 80) This fund has a projected beginning fund balance of $430,119.77 and ending fund balance of $376,956.94, for a drop of about $53,000.

“Out of the Fund 80 levy, we’re looking to take about $150,000 that would go towards our daycare… We also fund Officer [Tim] Kosar as our SRO [school resource officer], and part of Daniel Worsham’s contract with the LTCA[LuCille Tack Center for the Arts],” said Gorst.

Extra budget packets are available at the school district office. Anyone looking for more information on the school budget can contact Gorst at jgorst@spencer.k12.wi.us or 715-659-5347.