HSSD’s need for a referendum is due to numerous factors
By Ben Rodgers
Editor’s note: This is the first in a four-part series that examines the proposed referendum for the Howard-Suamico School District. This article breaks down how the district got into into its current financial situation.
SUAMICO – A change to school finance 25 years ago led the Howard-Suamico School District down a path where it now requires a referendum to be competitive.
In the state budget for ’93 to ’95 revenue limits were imposed for all public school districts.
“What the revenue limit law did was say whatever a district was spending the year prior to that ’93 year, that was the new limit, the new cap if you will,” said Matt Spets, assistant superintendent of operations.
Meanwhile, in Howard-Suamico the early ’90s saw the slowest economic and population growth in recent history.
As a result the school board at that time was aggressively fiscally conservative, Spets said.
“We’re locked into our limit, even while every state bieum budget has in the past increased the revenue limit amount per pupil, Howard-Suamico started low and remains low,” Spets said.
Budgets for school districts are almost reversed from that of a typical business.
The district has a figure due to the revenue limit and then works backwards to find out what it can spend on staffing, compensation and building needs.
The determination of the final amount a district receives is a complicated formula. It factors in property value in the district, member students, open enrollment students, and various other demographic and socioeconomic numbers.
But the main arm for funding is the set limit a district receives per member student.
The last verified figure HSSD received was $9,250 per member student, in 2016-17.
For other comparable districts that number is higher. The ’16-’17 cap for Sheboygan schools was $10,438, in Appleton the cap is $9,872, De Pere has a cap of $9,553 and Pualski is capped at $9,508.
In school finance a cap of a couple hundred dollars more per student can result in millions when you have roughly 5,500 member students.
In addition to a figure that is well below other peer districts, numerous forecasts predict student enrollment numbers across the state have plateaued and will start to decrease.
In recent years the Howard-Suamico area has grown both in taxable value and population, however due to the cap set back in 1993, this doesn’t equate to more dollars for the district.
“The benefit from growth within our borders, whether they be housing starts or businesses, is that helps to maintain a low and stable tax rate, our district’s impact on the property taxes,” Spets said. “It does not bring us new revenue.”
This is why the tax levy has remained at $9.19 per $1,000 in assessed property value for the past three years.
After the failed referendum of 2017 the school board wanted to find out what went wrong, so it enlisted the help of a community task force.
Spets’ job was to teach them the ins and outs and school finance.
“I think the tipping point was in the second meeting when we discussed the variables that impact the revenue limit,” he said.
As a result the community task force provided the starting point for the school board’s solution to the revenue cap problem.
The board took the recommendation and went a step more conservative when it proposed a ballot question this April that allows for the district to exceed the set revenue cap by $5.85 million for five years.
The impact on the taxpayer for this referendum is neutral, meaning the HSSD portion of the property tax rate will not increase.
“We aggressively paid down debt and second, our property is increasing at a higher rate than most communities,” Spets said. “Those two factors allow us a lot flexibility to get up the $9.19 year after year.”
The $5.85 million a year came from board working backwards, like any other district budget process and landing on a figure that had no impact, but also addresses needs in the district.
“We went with what are the basic needs,” Spets said. “What do we need fundamentally? What’s the most conversative figure we need so we can reduce class sizes, restore cuts, start closing the gap on teacher pay and work on our facility needs?”
In regard to the five-year time table, that involved a number of factors.
A 2015 change in the supplemental retirement plan for employees will save the district roughly $1.5 million a year starting in 2023.
The district will also cap open enrollments moving forward to limit the number of non-member students.
Those two items allow the district future financial stability in the coming years.
The board also made cuts in the district where it could in recent years to lower operations costs.
Contracts weren’t extended, benefits were bid out and employees added more contributions to that supplemental retirement plan.
“Eventually it came to the point where we got all that low hanging fruit,” said Lisa Botsford, school board treasurer and deputy clerk. “There was nothing more that we could do.”
Botsford has served on the board since 2007 and is finishing her fourth term.
Since she moved to Suamico in 2003 things in the area have changed.
Lineville Road has evolved into a business district, more apartments and houses dot the landscape, and the population has increased along with the changes.
But the revenue limit has stayed the same since 1993.
“We want to make sure we have asked for enough to be able to do what we need to do,” Botsford said. “But there’s no guarantee for anything.”
The referendum question will be on the ballot for the April 3 election.