Greenwood going to referendum again in April
The Greenwood Board of Education decided Monday night to ask property owners for $4.65 million in additional tax revenue over the next five years to help fund continued operation of the school district. Without the additional revenue beyond what the state otherwise allows, says the district’s administrator, the district’s educational programs “would not even be recognizable.”
On a 5-0 vote on Monday, the Board moved forward in placing a revenue cap exemption referendum on April 7 ballots. If passed, the new referendum would add a small amount onto the last year of the 5-year referendum passed by voters in 2016, and then replace it with a new exemption that would cover the district from 2021-2025.
The Board looked at three scenarios before deciding for how much it will ask voters this spring. The plan approved calls for: — adding $150,000 to the $750,000 exemption already approved for 2020-21.
— $1,050,000 for the 2021-22 year — $1,100,000 for the 2022-23 year — $1,150,000 for the 2023-24 year — $1,200,000 for the 2024-25 year A financial forecast prepared for the district by Baird Co. projects that the district’s costs will continue to rise in the coming years while its allowable revenues remain flat. The district — like all other public schools in Wisconsin — is bound by a state revenue cap law that limits how much money it can generate in a given year. Each district receives state aid dollars based on enrollment, its relative property value and other factors, and the district can then tax for the remainder up to its revenue limit. If that total is not enough to cover all expenses, the district can call a referendum to ask voters for additional dollars. District Administrator Todd Felhofer said Greenwood’s state aid revenue has hardly changed over the past decade. It’s total annual allocation of approximately $2.4 million this year is about what it was in 2010, he said, but costs for labor, health insurance, etc. have continually risen.
Also, Felhofer told the Board on Monday, Greenwood receives a relatively low state aid allocation when compared to other local districts, in part because it has more property value than the others.
“We are the lowest-aided district in Clark County,” Felhofer said, with the state providing 53 percent of the district’s revenue limit. “Our neighbors (Loyal) get 66 percent. That explains why their taxes are lower. As a community, we have to support it more.”
The good news in Greenwood is that rising property values are expected to offset the new cap exemption to the point where the tax rate — the amount assessed against each property owner’s value — should stay stable. This year, the district’s tax rate is $11.05 per $1,000 of equal- ized value, meaning the owner of a $100,000 home pays $1,105 annually in school taxes. That amount was $1,307 prior to the 2016 referendum, but fell largely because the district’s debt for its high school construction was paid off that year.
Baird’s financial projections show the tax rate should stay near that $11.05 mark, and perhaps even fall slightly, even if the new referendum is passed. As the district has experienced steady property value growth in recent years, there is more value over which to spread the taxes, which keeps the rate stable.
Felhofer said the referendum comes down to a question of quality in educational programs. Like the television insurance ad suggests, he said, does the district want programs that are “just OK” or ones that excel.
“We want the good school district. We want the high-performing school district,” he said.
Board President Dean Lindner said he supports the referendum “If we can do that and still lower our mill rate.
“We can lower our mill rate and still have the performance,” he said.
While the prediction of a stable or even declining tax rate is based on multiple variables that could change over the next few years, the district can say the forecasts it made prior to the 2016 referendum were favorable. For example, Felhofer said, in 2016 the district forecast its tax rate this year would be $11.22, but it’s lower at $11.05.
Some of the variables the district cannot control are a possible stagnation in property value growth, legislative action that could impact state aids, and student enrollment fluctuations. The district used conservative estimates in its forecasts, and even then the tax rate should be stable.
“It’s a budget. There’s no exactness to this,” Lindner said.
What Felhofer said he knows for sure is that Greenwood’s educational quality will suffer if another referendum is not passed in April. If the vote fails, the district could not possibly hold another one until November, and it would then have to at least plan for the next year without the additional $150,000 for 2021-22. With no general election scheduled in 2021, Felhofer said the district would be in serious trouble if the exemption were allowed to expire without a replacement.
“At that point, the damage is going to be significant,” Felhofer said. “We would not even be recognizable in terms of what our district would mean.”
The Board did decline to go with two scenarios that called for larger tax increases. Those would have provided more funds that would have helped the district maintain a larger fund balance. Auditors recommend a district carry a balance of 22-23 percent of its total budget, and Greenwood has been doing that in recent years. That allows it to avoid short-term borrowing during times when it’s waiting for large state aid checks. With the lower referendum amount approved by the Board, the district will still not be able to balance its annual budget, and will have to dip into the fund balances. That could mean short-term borrowing needs.
“Obviously, any time you borrow money, you’re paying interest on it,” Felhofer said.
Lindner said he’s concerned with the forecast of a shrinking fund balance with the lower referendum amount.
“To me that’s a losing process when you have to borrow,” he said.
Board member Jerome Krempasky said it’s a good thing that the tax rate should decline even with referendum passage, but he’s still nervous about asking citizens for another $4.65 million over five years.
“I think it’s going to be a very hard sell,” he said. “Money’s tight out there. I support it, but it’s going to take a lot of work.”
With the new referendum now officially on the spring ballot, the district will schedule three public informational meetings in the coming months. There will be one at the high school, one at the elementary school, and one in Willard. The district will also send out an informational mailing prior to the vote.