This article is number four in a series about the upcoming school referendum. When voters go to the polls on February 20, 2024, the following referendum will appear on the ballot:
Shall the School District of the Menomonie Area, Dunn and St Croix Counties, Wisconsin, be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, by $4,200,000 beginning with the 2024--2025 school year, for recurring purposes consisting of operational expenses?
Since this referendum is asking for increased funding through the property tax, understanding how your taxes work is important.
The first three articles looked at property taxes - what's on your tax bill, how it's calculated, what mill rates are, how property taxes get apportioned, and whether or not property taxes in Dunn County are higher than everywhere else.
Below are links to the prior articles. If you haven't read them, I would encourage you to do so before you read this article.
This article will cover revenue limits and referendums.
REVENUE LIMITS
Before 1993, school boards were responsible for deciding how much to spend on education and how much revenue could be raised from property taxes to fund spending. Wisconsin Act 16 implemented revenue limits beginning with the 1993-94 school year. The Wisconsin Legislature imposed these revenue limits in response to concerns by lawmakers and members of the public about rising tax bills to fund schools.
Under the school district revenue limit, the amount of revenue that a school district can raise from general school aids (consisting of equalization aid, special adjustment aid, inter-district integration aid, and intra-district integration aid) plus property taxes (excluding levies for referendum-approved debt and community service programs) may not exceed a certain level, defined by law. The amount can vary from year to year and is measured on a per-pupil basis.
The revenue limits put in place for the 1993-94 school year were based on the school district's 1993 spending levels. Spending among Wisconsin school districts varied widely, from a low of $4,117 per pupil to more than $11,000. School districts have been locked in at that level ever since.
While these amounts have risen over time, they have not risen consistently. From 1999 to 2009, revenue increases were tied to inflation, but that provision was removed from the state statutes. Since then, per-pupil adjustments have been much lower, with a zero-dollar increase in six years and a 5.5% cut in one year. Increases are set by the Wisconsin Legislature. (See chart below)
The chart below shows per pupil revenue limits for 2022-2023 for schools in Dunn County and the Big Rivers Conference.
2022-23 per pupil revenue limits
This next chart shows the disparity among school districts. These are the five districts with the highest revenue limits.
Five highest per pupil revenue limits 2022-2023
The state average in 2022-2023 was $11,888.00. (Information taken from the Legislative Fiscal Bureau.)
Since the amount of revenue that can be raised from property taxes and state aid is capped, increases in state aid will lower the property taxes rather than increase education spending. Likewise, if state aids were to decrease, property taxes could increase.
The 2023-25 legislative state budget created a "low revenue floor" of $11,000 per pupil. The least any district would receive per pupil is now $11,000. In addition, the budget bill increased per-pupil spending by $325 for the 2023-2024 and 2024-2025 school years. When signing the budget bill in July of 2023, Governor Tony Evers used his partial veto to allow the increases through 2425 (that is not a typo). The veto could be undone if Republicans in the Assembly successfully override it. In September, an attempt to do so failed as Republicans did not have the two-thirds majority needed.
According to projections by the Legislative Fiscal Bureau, inflationary increases for the two years prior to 2023-24, when there was no raise in the limit, would have been $343 and $372. The bureau also estimated that inflationary increases for the next two years would be $393 and $403. These increases are beneficial; however, they continue to be less than inflation.
While implementing the revenue limit did have the intended effect - lowering Wisconsin's property tax ranking nationally, it also dropped the per pupil spending below the national average, from No. 11 in 2002 to No. 25 in 2020. (Legislative Fiscal Bureau).
ENROLLMENTS EFFECT ON REVENUE
With revenue limits tied to enrollment, when enrollment goes down the revenue available to the district goes down. The Menomonie School District’s enrollment declined from 3472 in the 2019-2020 school year to 3365 for the 2022-2023 school year. That’s a loss of 107 students and approximately $1,000,000. Many costs for the district are fixed and a loss of students will occur across multiple grades so teaching positions can’t necessarily be cut.
In other words, costs don't decline linearly with enrollment; if there are 25 students in a classroom or 18, the school needs to provide the same number of buses, the same support staff, buildings still need to be heated and maintained. The costs are the same but losing students means lost revenue.
REFERENDUMS
The only way the school can exceed the revenue limits is by passing a referendum. There are two different kinds of referendums. Operational referendums and capital referendums.
Operational referendum
Operational referendums are for operational expenses - what it costs to keep the school running.
An operational referendum is a district-wide vote to approve or deny a school board request to exceed the district's revenue limit. Annually, school boards are notified of their allowable tax levy. If they wish to exceed it, they can ask the voters for permission. If a referendum passes, it overrides the revenue limit without impacting state aid.
These referendums can be nonrecurring, meaning the funding lasts for a specified period of time, or recurring, meaning the funding lasts for an unlimited amount of time.
In 2007, Menomonie failed to pass a nonrecurring referendum to increase the revenue cap by $885,000 annually for three years to maintain quality instructional services and programs. That referendum was structured with an $80 increase in property taxes the first year, $160 the second, and $240 the third.
Since it did not pass, the decision was made to close Cedar Falls School.
Capital referendum
Capital referendums allow districts to borrow money for construction, renovation, or other building projects.
Menomonie passed a capital referendum in 2013. That referendum was broken into two questions. The first requested $25 million to address maintenance needs, including remodeling projects at River Heights and the high school. The second question was for an additional $11 million to more fully renovate the high school, including a new gym, tech ed addition, new media center, and remodeling throughout the building.
The referendum that will be on the ballot on February 20th is a recurring referendum to increase the revenue limit by $4.2 million in 2024 and every year thereafter. It would act as a permanent increase to the revenue limit.
INCREASED RELIANCE ON REFERENDUMS
Menomonie is far from the only school facing funding issues.
In the past three decades, 82% of districts have turned to a referendum at least once, and 20% have used referendums six or more times. (Milwaukee Journal Sentinel - Nov. 2023)
This spring, River Falls, Chippewa Falls, Eau Claire, and New Richmond (theirs is a capital referendum) will all have referendums on the ballot.
River Falls has both an operational referendum and a capital referendum on the February 20th ballot. The operational referendum seeks to increase the revenue limit authority in a "three-year step-up" approach, including $1 million (2024-25), $2 million (2025-26), $3 million (2026-27), capped at $3 million recurring (2027-beyond) for operational expenses.
The capital referendum seeks approval for $28 million for several facility improvements projects.
In April, voters in Chippewa Falls will decide on an operational referendum seeking $2.5 million annually for three years.
The Eau Claire school board voted in favor of placing an operational referendum on the November 2024 ballot, with no further details shared at this time.
The New Richmond School District will have a capital referendum on the April ballot for an amount not to exceed $113,700,000 for "the public purpose of paying the cost of a school building and facility improvement project consisting of construction of additions and renovations at Starr and Paperjack Elementary Schools and the Middle School; district-wide safety and capacity, building infrastructure and site improvements; and the acquisition of associated furnishings, fixtures, and equipment." (Hudson Star Observer - 1/19/2024)
In 2007, New Richmond voters passed what was at that time the most expensive referendum in Wisconsin's history at $93 million for the construction of a new high school.
In 2023, Hudson passed a $29 million capital referendum but not an $8 million operating referendum.
I will finish this article by answering a couple of commonly asked questions.
Q: Will the increase in our tax double every year after the first increase in 2024? I have read that it will double every year.
A: This referendum requests an increase to the revenue limit of $4.2 million going forward. The increase is the same every year; it does not double in the second or third year. The amount will go up, then stay there.
Q: Why is this referendum being held in February when nothing else is on the ballot?
A: The referendum date was set to be in February because the district budget for next year needs to be done in late February and March. The next option would have been April 2, but that is too late for planning staffing and writing contracts. High school students are already registering for fall classes, and the staffing plan will be coming soon. Usually, a Spring Primary for the school board election is needed, which was the expectation in the fall when the date had to be chosen.
These answers were provided by school board member Abe Smith on Facebook and from a presentation he gave at the library, which can be found HERE.
The next article will talk about some of the current budget issues going on in the Menomonie School District and answer more questions.
While all the information contained in this article is believed to be accurate, it is not guaranteed. The user should not rely solely on the information provided and should seek additional information from other sources. While some information was provided through interviews with individuals, any errors are my own.
Please feel free to share any comments or questions you may have about this article. You can send me a message HERE.
