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Schools use referendums to balance budgets

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Charles J. Deery

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Steve Lutzke

When Parkview Superintendent Steve Lutzke talks to fellow superintendents, the question isn’t, “Are you going to referendum?”

The question is, “When are you going to referendum?”

Declining enrollments and increasing costs that exceed revenue limits plague the Orfordville-based Parkview School District and its neighbor to the west, Brodhead. The results are referendums in both districts April 6 asking voters for permission to exceed state revenue caps.

“They have a lot of company,” said John Ashley, executive director of the Wisconsin Association of School Boards.

Parkview and Brodhead join 34 other districts in the state planning 48 referendums on next month’s ballot. Of those, 26 referendums are to exceed revenue caps.

“We’re not surprised because we know that state aid was reduced to our school districts,” Ashley said. “As a result, the difference had to be made somewhere.”

The push for referendums likely will continue across the state, school officials agree.

“Most school districts really don’t have any other place to go on the expenditure side,” said Tony Evers, state superintendent of public instruction. “They turn to taxpayers and ask for assistance.”

“The districts that dodged the bullet in the past are finding (with) the revenue caps and reduced aid, it’s finally touching their communities, as well,” Ashley said.

The perfect storm

Declining enrollments and cuts in state aid and revenue limits are causing the budget turmoil.

The state funding system is set up in such a way that districts with stable or declining enrollments are “going to have to go to referendum,” Brodhead Superintendent Chuck Deery said.

“There’s just no way around it,” he said.

Expenses—many of which are beyond the local boards’ control, such as utilities—are increasing beyond what revenue caps allow, he said.

This school year, state aid decreased in many districts. Parkview’s aid fell $340,000, Lutzke said.

“We’re actually running the school on (nearly) 1 percent less than last year,” he said Tuesday, noting he had issued layoff notices to two teachers that day.

The district’s operating budget went from $11,134,341 in 2008-09 to $11,035,836 this year.

Districts are allowed a per-student increase in revenue limits each year, but that increase was cut from $275 in 2008-09 to $200 per student this year and for next year, said Dale Knapp, research director at the Wisconsin Taxpayer Alliance.

At Parkview, the $274.68 per pupil revenue increase for 1,099 students last year brought an increase in revenue of $301,873, Lutzke said. This year, the $200 per pupil increase coupled with a decreased enrollment of 1,086 brought the per pupil total revenue increase to $217,200.

“Essentially, districts are collecting less revenue this year than they thought they were going to be,” Knapp said. “Those districts that were already struggling with the caps, the pressure gets even worse this year and next year by limiting the allowable increase.”

Declining enrollment

The Parkview and Brodhead districts, located in southwestern Rock County and southeastern Green County, have seen enrollments drop in recent years, and projections indicate the trend will continue.

A population study in Brodhead 10 years ago found the birth rate in southern Wisconsin was decreasing, Deery said. Back then, Brodhead still benefited for a few more years from families moving into new subdivisions to commute to Madison, Janesville and Beloit, he said.

The birth rate continues to decrease, but now Brodhead isn’t seeing the influx of commuters because of higher gas prices, he said.

In Orfordville, Lutzke admits that some students have left the district for better sports opportunities or because they weren’t happy with administrative or board decisions.

“Generally, our decline seems to be fewer families living in the area,” he said.

He referred to the “brain drain” that much of the state is experiencing when students graduate from college and settle in larger metro areas such as the Twin Cities or Chicago.

“The rural parts of the state, I think, experience that more than the urban areas,” he said.

The class sizes of incoming 4-year-old and 5-year-old students are 60 percent to 75 percent of the size of the graduating classes, he said.

Declining enrollments are affecting much of the state, aside from pockets that include the Hudson area, parts of Dane County and the Fox Valley, officials said. Dozens of elementary schools in rural areas have closed around the state, and the results of referendums next month will determine the fates of many more.

“For the most part, I’d say our enrollment statewide is relatively stable and declining in a small way,” Evers said. “Rural areas of the state are becoming decimated with declining enrollment.”

The future

Apart from major changes in the funding formula, which have been long discussed but never enacted, Evers said budgets will find some relief when the state’s economy improves. An upturn provides more revenue for the state to distribute to municipalities and schools, he said.

“Once we turn the corner economically, it will be much easier to talk about the funding formula,” he said. “Whether it’s fair, the fact of the matter is the pot is static right now, and we have to get it to the point where it’s growing.”

Earlier this month, Gov. Jim Doyle announced he was dropping his proposal for school funding reform. That effort began more than a year ago.

Rep. Brett Davis, R-Oregon, plans to introduce legislation soon to “give school boards the tools that they need to help control their costs better,” he said.

His proposal calls for reinstating the qualified economic offer and aligning it with revenue caps; forcing arbitrators to consider local economic conditions; and giving school boards the authority to provide teachers with the same health benefits that state workers receive or the equivalent.

In February, several Democratic legislators who represent rural areas introduced proposals aimed at helping rural schools. Plans include expanding and reforming the SAGE program for disadvantaged students, increasing flexibility for districts facing declining enrollment or consolidation, and improving the school transportation aid program.

“The bottom line is it’s a very challenging time for our school board members and districts around Wisconsin,” Ashley said. “The good news is we see great education happening in Wisconsin.”