School shut-down doesn’t change Greenwood need for revenue
The 2019-20 school year most certainly isn’t going as Greenwood School District officials planned it, but there will come a day when things return to normal. And when that inevitably happens, District Administrator Todd Felhofer said the district’s need for additional revenue from local taxpayers will still be there.
The Greenwood district happens to have scheduled a revenue cap exemption referendum for a spring election during a coronavirus pandemic that has closed everything from public schools to churches to local businesses, but Wisconsin Gov. Tony Evers has stopped short of postponing or cancelling the voting. While Greenwood is dealing now with how to best educate students while the school is locked for a yet-to-be determined length of time, it also is looking ahead to future years’ budgets and the money that will be needed to continue quality programs when classrooms return to normal.
On the April 7 election ballot will be a question asking district voters to approve $4.65 million in additional local property taxes over a 5-year period beginning in 2020-21. In 2016, voters approved a $750,000 annual exemption for four years, but that amount will expire after next year. This new question asks voters for: — an additional $150,000 on top of the already-approved $750,000 for 2020-21.
— $1,050,000 for 2021-22 — $1,100,000 for 2022-23 — $1,150,000 for 2023-24 — $1,200,000 for 2024-25 With district property values rising consistently in recent years and state aids kicking in to pay a portion of the increased budget, Felhofer said property taxes will likely not rise even with passage of a new referendum. The district’s current mill rate — the amount property owners contribute to the school per $1,000 of value they own — is $11.05, and that rate is projected to drop to $10.82 next year and stay no higher than $10.90 through 2024-25. While it is true that the mill rate would drop dramatically without a new referendum, Felhofer said with passage, the district can continue its current quality programs without increased taxes.
On that point, history is on the district’s side. Prior to the 2016 referendum, the district projected what the tax rate would be for those four years, and the projection proved to be high.
“Every year, we came in under that,” he said.
Felhofer said the timing of the referendum is unfortunate as people are getting laid off and some businesses have closed due to the coronavirus threat. However, he added, the scare will pass and the school’s future depends on what voters decide now.
“The school is eventually going to open up. What are we going to open up to?” he said.
If the referendum fails, Felhofer said the district would have approximately 17 percent less revenue with which to pay teachers and support staff, run buses, maintain buildings, etc.
“We’re cutting 17 percent? It’s going to be pretty obvious that a lot is different,” Felhofer said.
With the state sending about $75 million less to public schools (in inflation-adjusted dollars) since 2011, districts like Greenwood with low enrollments are struggling for funds. Revenue limit laws cap how much a district can raise in a year, unless local voters approve a referendum like this for higher local taxes. If it doesn’t pass, the school simply has significantly less money to cover expenses that won’t decrease accordingly. Greenwood receives approximately $600,000 less annually in state aids than it did 10 years ago.
“Without these referendum funds, the district would be faced with making major reductions in all areas which will likely result in the loss of academic and cocurricular opportunities for students of all ages,” read a statement on an informational brochure mailed to residents recently. “These reductions would profoundly change what has made Greenwood great for so many years.”
Felhofer said Greenwood has been able to offer a “relevant and rigorous” curriculum for students, but there is a cost associated with that. The additional tax revenue will allow the school to prepare Greenwood students to compete with others after they’re finished with high school.
“How do we make that available to the students of Greenwood so they have a chance when they leave here to be on par?” he said.
Passage of another referendum will also help the district avoid a situation in which it must borrow funds to meet expenses throughout the year. The state distributes state aids on a schedule that doesn’t match school needs, and if it can’t carry a decent fund balance, it must short-term borrow to meet payroll and pay bills. With the last referendum in place, Greenwood has not had to take out any loans.
“We continue to want to go down that road,” Felhofer said. “We’ve been able to avoid that. Anytime you borrow, there are interests costs.”
Felhofer has no way to predict what the April 7 voter turnout will be, nor how taxpayers might be inclined to vote if they’ve recently been laid off or are otherwise concerned about the long-term economic impacts of the coronavirus. Given that the district already has a $750,000 cap exemption for the coming fiscal year, Felhofer said “We can wiggle through” for 2020-21, but not beyond.
According to district projections, the district would have a $189,983 deficit for 2020-21 without a referendum passage. That number would jump to more than $1.11 million per year by 2021-22 and to $1.39 million by 2024-25.
If the referendum is defeated next week, the district could try again in the Nov. 3 election and could still get funds for the 2021-22 year.
“If it does fail in April, I would be fairly confident it’ll reappear in November,” Felhofer said.