Hope in Nerad

In Madison schools referendum prospects look good, Jason Shepard lays out Nerad's plan if Madison's referendum passes next week: "The plan...would eliminate the paralyzing school board budget battles for the next three years, freeing up significant time for the board and a new administration to chart a new strategic plan and focus on initiatives to boost student achievement."

School funding laws imposed by the state Legislature in 1993 require school districts to seek voter approval to increase budgets by any more than roughly 2.2% annually. Because costs to continue the same programs generally exceed this, districts are increasingly cutting student programs or holding referendums.

Madison officials say they've cut $60 million in services over the past 15 years and little is left to trim that won't reduce student services or increase class sizes.

November's referendum seeks to permanently increase the revenue cap for operating costs by $5 million in 2009-10, and an additional $4 million in both 2010-11 and 2011-12, for a total of $13 million. These increases would be permanent.

The projected tax hike on an average $250,000 home is $27.50 in 2009, $70.60 in 2010, and $91.50 in 2011, for a total three-year increase of $189.60.

To demonstrate fiscal discipline, Nerad has committed to making $1 million in cuts this year, including $600,000 in staff positions, even if the referendum passes. And Nerad pledges $2.5 million in additional spending cuts in the two subsequent years. The district will also transfer $2 million from its cash balance to offset the budget deficit.

Assuming the referendum passes, Nerad's next priority will be to engage the community in a strategic-planning process that could transform many of the district's programs and priorities. The school board intends to approve a process by the end of the year.

Notably, Nerad says he will insist on setting data-driven, annual targets for the strategies.

And he's "committed to pushing" for another look at a 4-year-old kindergarten program, something that has eluded the district despite its embrace by two-thirds of districts throughout Wisconsin. His staff is conducting an updated cost analysis, and he wants a school board discussion and a meeting with various stakeholders in the next few months. He's not ruled out implementing a 4K program as early as next year.

"It's for the kids"

David Blaska writes about his not so fuzzy feelings for the Madison referendum in "It's for the kids, dammit!"

The school district wants voter permission to permanently exceed the revenue cap for operations money by $13 million a year. Because the state’s school funding formula punishes profligacy, Madison will have to pony up a total of $27 million over the next three years. (I explain that at the end of this blog.) That will add$92 a year to the property tax bill of a $250,000 home.

Even though:

• Total K-12 enrollment has declined from 25,087 in 2000-01 to 24,540 in 2008-09.
• The district’s annual budget has increased from $183 million in 1994-1995, the first year of revenue caps, to approximately $368 million (2008-09).
• Its annual cost per pupil is the second highest in the state at $13,280 for the school year 2007-08.

Blaska gets these facts from Don Severson, "who pretty much IS Active Citizens for Education."

And by the way Mr.Blaska, my blog posts are also a part-time endeavor... and I write them for FREE... for the love of it.

The details of Madison's referendum

The Madison Metropolitan School District's Board of Education voted unanimously to ask the voters to consider a referendum question on Tuesday November 4.

Here are the details from the Education Referendum fact sheet 9-26-08:

Why these budget gaps?

In 1993, the State of Wisconsin created two competing pieces of legislation. First, the revenue cap (or revenue limit) restricts the amount of funds that a Wisconsin school board can raise from local property tax without going to referendum. This law has allowed an average yearly increase of 2.22% per student above a district's previous year's budget. For the 2008-09 budget of the
Madison Metropolitan School District (MMSD,) this increase is $270 per student or about a 2.5%
increase.

Second, the Qualified Economic Offer (QEO) requires that "school district professional employee" contracts increase by a minimum of 3.8% to avoid arbitration on economic issues. All employee contracts make up about 85% of the MMSD budgets. When districts negotiate a 3.8% total package (wages and benefits) to avoid arbitration but the overall budget can only increase by an average of 2.22%, a budget gap is created. See graph below.

To close the gap, districts have to make cuts in programs and services, create efficiencies, obtain outside revenue and/or go to referendum.

Cuts to stay under revenue cap

Since 1993, the Madison School District has reduced programs and services by over $60 million. The two largest categories of reductions in this period have been 1) direct services to students, and 2) administrative. Together they make up more than 86% of the total reductions.

These reductions include:

• 157 full-time equivalent positions (FTEs) from special education.
• Central office staffing in the areas of physical education, world languages, environmental education, and driver's education.
• A total of 52.5 positions from the Building Services area which covers custodial and maintenance operations.
• 79.6 FTEs from middle and high schools.
• 32 FTEs from student services.
• 15.2 FTEs from elementary school art, music, physical education, and reading support.

Efficiencies to stay under revenue cap

Since 1993, MMSD has developed many efficiency measures that create permanent cost savings. Examples:
By using energy-efficient technology when making necessary maintenance repairs, the district saves almost $750,000 annually in energy costs:

• Lighting projects that use high efficiency sources.
• Motion sensors.
• Majority of all single pane glass replaced with insulated glass.
• Boiler replacements that use high efficiency boilers.
• District-wide temperature control system.
• Transportation savings of over $600,000 each year through a partnership with private schools and through consolidating MMSD Schools' start and end times.
• Madison Schools is the fiscal agent for a consortium of five school districts that shares human resources and financial management software systems. This partnership benefits MMSD taxpayers by saving $700,000 annually through reduced staff members.
• Changes in health insurance plans, which netted $97,000 in savings to the district compared to prior contracts.

A Partnership

The community and the school district would share the responsibility for the gap: the community part would come through an approved referendum. The school district part would come by continuing to make cuts, find efficiencies, and lessen the tax impact - see "Tax Savings" below.

The question

The referendum asks for the approval - starting in 2009-10 - to spend more than the revenue limit will allow. The amount to exceed the revenue limit would be

• $5 million in the 2009-10 year,
• An additional $4 million in the 2010-11 year for a total of $9 million, and
• An additional $4 million in the 2011-12 year for a total of $13 million.

It's a recurring referendum which means that, if approved, the school district could exceed the revenue limit by $13 million in the 2011-12 year and in every year after that.

Tax impact

The projected tax impact on the average Madison home (valued at $250,000) will be

• An increase of $27.50 in 2009-10,
• In 2010-11, an increase of $43.10 over the previous year, for a total of $70.60, and
• In 2011-12, an increase of $20.90 over the previous year, for a total of $91.50.

The cumulative total increase over the three years is $189.60 ($27.50 + $70.60 + $91.50), or an
average of $63.20 per year.

Tax rate

The tax rate -- that is, the property tax paid per $1,000 of assessed value -- is projected to go:

• Up 1.1% in 2009-10, (from $9.92 to $10.03, or 11 cents).
• Down 2.1% in 2010-11 (from $10.03 to $9.81, or 22 cents).
• Down 3.0% in 2011-12 (from $9.81 to $9.51, or 30 cents).

Cuts to be made in next 3 years

Passing a referendum does not necessarily allow the MMSD to add programs and services because reductions will still be necessary. The projected budget shortfall for 2009-10 is $8 million. An approved referendum would provide $5 million. The school district would still need to address a $3 million budget shortfall for 2009-10:

• $600,000 from staff positions not allocated to schools.
• $400,000 in yet to be determined areas.
• $2 million used from the district's cash balance for the 2009-10 year.

Even with an approved referendum, the school district projects it will still have to make cuts of approximately $2.5 million in the following two years.

It should be noted that since 1993 the district has reduced programs and services by over $60 million.

Tax Savings

The district is taking two other actions to lower the amount of tax dollars needed:

• Levy $2 million less in the Fund 80 portion of the budget for the 2009-10 year.
• Use the Capital Expansion Fund, also named Fund 41. (Funds are categories of the local budget.)

Under Wisconsin's equalization aid formula, the MMSD has to give dollars back to the state because Madison has higher than average property values and higher than average cost per pupil. By using Fund 41, the district can spread the cost of capital projects over a longer period of time, which means the district will receive more from the state and rely less on the local property tax.

"Cuts led to negative impact on schools"

In Past cuts led to negative impact on schools, Steve Pike, President of Madison Teachers INC, discusses the impacts on Madison schools of having $60 million and over 700 positions cut in the past 15 years:

What's happening here is happening in schools throughout the state. In 1993, the governor and Legislature imposed revenue controls on Wisconsin's school boards, limiting the amount their budgets can increase to about 2 percent per year. Costs are increasing more rapidly than that: energy costs, health insurance costs (no matter what the health plan), and an increase in educational needs all mean that the district's budget needs more than the 2 percent increase in funds per year.

The cuts already made are having a direct, negative impact on our children. The long-term solution is to change the statewide school finance system. For now, the referendum must pass to avoid deeper cuts.

2nd Assembly District candidates have differing views on education funding

In Wisconsin’s 2nd Assembly District candidates differ on school funding, candidates share their views on the school funding formula and revenue caps:

"What is the appropriate formula for funding school districts and should revenue caps remain in place?"

Frank Lasee, R-Bellevue:

The current mix of general state taxes paying for two-thirds of the cost of our schools and the other third being paid by the local taxpayer is fair and should be maintained. It allows for property tax relief and for some level of local input and control. Most of the schools in this area are getting about two-thirds state funding, some a bit more.

There are some that are proposing an increase in sales taxes to lower property taxes and spend more on our schools. On a statewide average, we spend $11,500 per student. Perhaps, if this tax shift wasn't just a way to increase the tax burden on all us, it could be considered. This is simply a way to reach deeper into the taxpayers' pockets, and something that I oppose.

It also will take away even more local input and control. Whoever provides all the money, or the vast majority of it, will make all the rules. Over time, there will be a one-size-fits-all mentality that will not recognize or allow for local efforts and local differences. This is not to the benefit of our students in the long run.

I support the continuation of the revenue controls, because it gives local taxpayers a say over major spending proposals and keeps our schools on a reasonable budget. The referendum process requires school officials to make a case for and explain their reasons for the additional spending and the increased taxes to pay for it...

Ted Zigmunt, Manitowoc County Board of Supervisors and president of the village of Francis Creek:

The state's current school funding formula, along with revenue caps, is causing many Wisconsin school districts to experience severe financial problems. The lack of adequate funding is causing districts to turn to tax referenda, the possibility of merging school districts or even shutting down completely.

No matter what school district children are born in, all should have an equal opportunity for a quality education. That is not happening now. It is my understanding that each district's per-pupil budget is based on the level of spending when the formula was set in 1992. Many things have changed since that time.

Costs have risen across the board, hurting the districts that were controlling their spending in the early years of the formula. Especially in areas with declining enrollment, districts are finding it harder and harder to find the money needed to educate our children and grandchildren...

Declining property valuations = higher mill rates in River Falls

In School enrollment dips, could spell trouble later, Phil Pfuehler explains how declining property valuations have caused higher mill rates in River Falls:

High school enrollment went from 987 to 985; Meyer Middle School, from 671 to 653; Westside Elementary, from 414 to 408; Greenwood Elementary, from 365 to 361; and the Renaissance Academy, from 60 to 46.

At Monday night’s regular meeting, the school board set the new tax levy at $16,289,045, or 0.7% increase over last year.

However, because property values in the school district rose 4.5% — higher than the modest 2% estimated this summer — the mill rate will drop 3.6% (instead of a projected 1.5%) from last year. The new mill rate is $8.46 per $1,000 worth of property.

While a declining mill rate is generally good news, the school portion of individual property taxes will vary, depending on how property values stand in the city and surrounding towns.

Smurawa said many Wisconsin school districts have declining property valuations that have caused higher mill rates.

3rd Assembly District candidates weigh in on education funding

In 3rd Assembly candidate questionnaires, candidates share their ideas for school funding...

"Should the Legislature do something to change how K-12 schools are funded?"

Al Ott (R-incumbent):

While it has become evident that changes to our school funding system may be necessary, we need to be cautious not to simply shift the burden from one tax to another. It's vital to balance the need to provide our children a quality education with the taxpayers' ability to fund public education. I support the creation of a task force to convene the stakeholders on this issue with the goal of finding an acceptable, workable and affordable school funding policy. Revamping the system must be a cooperative effort involving taxpayers, educators, administrators, business leaders and others.

Justin Krueger (D):

The United States pays more per child for education than any other nation. However, we are not at the top when it comes to student achievement. I have talked to many teachers and they have told me of a need to embrace a "family first" mentality. They have said that moms and dads should be more actively involved in their children's education. It's difficult to get involved when moms and dads are working long hours to pay for food, housing and health care. We need to be innovative and competitive with our funding for the K-12 schools. I am for school vouchers for families that put education first.

80th Assembly District candidates both support school finance reform

In 80th candidates talk education and the economy, Gina Duwe lays out the education platforms of both candidates:

Incumbant, Brett Davis (R-Oregon), serves as the chairman of the Assembly Committee on Education and is proposing a K-12 finance reform plan.

Davis proposes relying less on property taxes by diversifying funding sources such as including sales tax revenues, and he proposes aligning revenue caps with the qualified economic offer for teacher contracts. Changes would be approved through regional referendums, he said.

John Waelti (D-Monroe), "would bring a lifetime of varied experience to the office instead of a career politician."

Waelti said he wants the funding formula “reviewed, revised and reformed” to make sure adequate revenue is going into public education.

Waelti said stakeholders need to be involved so areas of disagreement are ironed out.

Waelti said he would support public education funding because that can be a tempting cut during budget shortfalls.

How decresed enrollment affects schools

In Elmbrook enrollment down by 103 students, Isral Debruin explains how decreased enrollment affects school funding:

Elmbrook School District enrollment is down 1.3 percent, but officials say the drop was anticipated and won’t affect state funding until next year.

Superintendent Matt Gibson said the decrease was on track with projections. He believes a decrease in the birth rate and slowdown in the housing market have contributed to the decrease in students.

The state exempts districts from fluctuations in enrollment for one year.

Next year, though, the drop will be included in a three-year rolling average that is used to calculate funding for the district. This average figures into Elmbrook’s total revenue cap, the amount it is allowed to collect in aid and taxes.

As such, a drop in enrollment can mean less state aid and higher taxes to make up the difference.

"Just the Facts"

In Sergeant Joe Friday’s take on the school referendum, Terry Fondow, Principal of Rhinelander High School, gives "just the facts" to some very controversial issues surrounding the school referendum in Rhinelander:

Statement: Will all the spoiled people drive me out of my home? Teach our children to work for extras and to be content with what we do have.

Just the facts: The apparent meaning of the statement above is that there are “spoiled people” who want “extras” for their children that will cause increases in the property tax that will drive someone out of their home.

The simple truth is that passage of the referendum will not cause an increase in property taxes. If property taxes go up next year, which they probably will, it will be because the State of Wisconsin has decided to remove more school aid based on property values.

The Rhinelander area has very high property values due to the amount of water frontage property available in this area. Higher property values equal higher property tax rates. There is nothing in the referendum that will directly increase property values.

Will the Tomah School Board approve the tax levy?

Steve Rundio reports in School levy before board, that it depends on the amount of equalization aid the district is expected to receive and those numbers might not be available when the board meets. The board has until October 31 to certify the 2008-2009 tax levy and pass the budget.

MPS offers generous fringe benefits

In "MPS offers uniquely generous fringe benefits," Alan J. Borsuk reports that Segal Co., a New York based consulting firm found unprecedented levels of fringe benefits offered to employees of MPS. For instance, full health insurance benefits are offered to anyone who works 20+ hours a week and employees who retire at 55 are provided the same health insurance as active employees. Conflicting views weigh in:

Michael Bonds, chairman of the board’s finance committee: “I don’t think MPS can sustain itself with the magnitude of benefits it’s providing.”

Tom Morgan, executive director of the Milwaukee Teachers’ Education Association: Teachers and other employees agreed at several points in recent decades to sacrifice wage increases in favor of better fringe benefits.

Political perspectives on school funding policies from the 88th Assembly District candidates

As politicians gear up for the upcoming election, the Green Bay Press-Gazette is asking candidates for Wisconsin's 88th Assembly District to address some of the most pressing issues facing Wisconsin legislators. One of those issues, of course, is the state's school funding policies.

Q: "What is your position regarding possible changes to the state’s school funding policies and formulas?"

Republican challenger, Tony Theisen: A strong economy hinges on a strong public education system. For this reason, state aid to local school districts should remain the state’s top budgetary priority. Any changes to the funding policies and formulas should be focused on providing a quality education for all students while also protecting property taxpayers. We should be directing more money to the classroom and rewarding good teachers for their efforts.

State Rep. Jim Soletski, D-Green Bay: School funding has been a shaky three-legged stool since its inception in the early 1990s. Health care costs have eroded teacher salaries and stripped money from school systems. The mechanism can’t be tinkered with because it was put together like a Chinese puzzle that all comes apart when one piece is removed. We need a dramatic change, and we need it quick. It is also expensive. Estimates to make this dramatic overhaul have been about $2 billion over two years. Not doing anything costs us in loss of qualified teachers, administrators and a poorly educated work force.

Schools districts are feeling the pinch of the global economic meltdown

In "Cities can’t avoid global credit crunch", Samantha Marcus discusses the effect of the current economic crisis on school districts in Wisconsin.

School districts routinely sell short-term bonds to smooth out the peaks and valleys of cash flow to meet payroll and other bills as they await state aid.

Cities and schools will sell long-term notes for facilities and infrastructure, and they borrow long term to spread the cost over a full generation of users.

Municipal bond sales are like loans, but instead local governments borrow money from investors on the open market.

As a result of the budget crunch, cities are not getting bids and sales are being postponed until the market improves or until the market is more liquid.

The hardest hit has fallen on the short-term credit market and school districts have historically relied on short-term borrowing to pay their monthly expenses until they receive their state aid.

Once money is flowing again and banks are willing to lend money to one another, the municipal bond market should be the first to rebound.

Political perspectives on school funding policies from the 2nd Assembly District candidates

Political perspectives on school funding policies from the 2nd Assembly District candidates

As politicians gear up for the upcoming election, the Green Bay Press-Gazette is asking candidates for Wisconsin's 2nd Assembly District to address some of the most pressing issues facing Wisconsin legislators. One of those issues, of course, is the state's school funding policies.

Q: "What is your position regarding possible changes to the state’s school funding policies and formulas?"

Rep. Frank Lasee, R-Bellevue: The current mix of general state taxes paying for two-thirds of our schools and the other third paid by the local taxpayer is fair and should be maintained. It allows for property tax relief and for some level of local input and control. Most of our area schools are getting about two-thirds state funding now, some a bit more. I support continuation of the revenue controls that give local taxpayers a say over major spending proposals and keeps our schools on a reasonable budget. It has helped keep taxes down over time and allowed a reasonable growth in school spending.

Democratic challenger, Ted Zigmunt: I believe school fund formulas need to be changed to help schools with declining student enrollment, and the Legislature needs to start this discussion in 2009. I am not sure any new plans will be enacted until the state’s economy starts to improve. I favor abolishing the QEO (Qualified Economic Offer); this would give employees of the school district and the communities the option to bargain between themselves to develop benefit packages. We need to get school officials and educators involved in these discussions so that all school districts succeed. We also need to educate the public about school funding

The Politics of School Finance Reform

Joe Handrick, a Minocqua town chairman and member of the Lakeland Union High School Board of Education, wrote an article for The Lakeland Times yesterday with an overview of school finance in Wisconsin, with a particular focus on property rich districts in the north. Handrick's article, "School Funding Formula: Don't believe those who say there's an easy fix" included an informative question and answer section to address the most obvious bullet points brought up during school finance debates. In the end, Handrick boils the argument down to politics:

If you want the QEO and the revenue caps eliminated, you need to hope for total Democrat control in Madison. If you get what you hope for, however, then there will be no chance of getting more school aid for our property-rich districts. More aid for our property-rich schools is only possible with Republican control.

If your primary goal is to get more aid to our property-rich districts then you need to hope for total Republican control in Madison. If you get what you hope for, however, then there is no chance of elimination of the revenue caps and QEO which means school boards will continue to need to seek referenda.

Madison School Referendum

Because of its severe financial problems, the Madison School District will be holding a referendum on November 4. School Board member Arlene Silvera is circulating the following e-mail describing the referendum:
Hi all,
Last month, the Madison Metropolitan School District Board of Education voted unanimously to put a question to the voters on November 4 to exceed the state-imposed revenue limits in the form of a 3 year recurring referendum. Information on the referendum is being overshadowed by the presidential election so I wanted to make you had information and the opportunity to ask questions.
Due to a broken state-funding system, the District faces budget gaps of $8.1M in 09-10, $4.4M in 10-11 and $4.3M in 11-12. After making over $60M in cuts since 1993, further reductions at these levels would negatively affect every child in our school district. These are the amounts the budget would have to be reduced if a referendum does not pass.However, the decision to go to referendum is never an easy one as we balance both the needs of our children and our community. The Partnership Plan, proposed by our new Superintendent Dan Nerad, does a good job at achieving that balance through shared responsibility for addressing the budget gap. Part of the gap would be filled through an approved referendum while the other part of the gap would come from the District continuing to make cuts, find efficiencies and lessen the tax impact through budgetary changes. Two changes in how we use our funds will be implemented over the next school year that will help to mitigate=2 0the tax impact of the referendum. This is explained below.
The Question
The amount to exceed the revenue limit would be:
$5M in 09-10 (note the gap is $8.1M. The District will be responsible for the other $3.1M)
An additional $4M in the 10-11 year for a total of $9M
An additional $4M in the 11-12 year for a total of $13M
It’s a recurring referendum which means that, if approved, the school district could exceed the revenue limit by $13M in the 11-12 year and in every year after that.
Tax Impact
1. The projected tax impact on the average Madison home (valued at $250,000) will be:
a. An increase of $27.50 in 09-10
b. In 10-11, an increase of $43.10 over the previous year for a total of $76.40
c. In 11-12, an increase of $20.90 o ver the previous year, for a total of $91.50
The cumulative total increase over the 3 years is $189.60.
Tax Rate
1. The district is taking other actions to lower the amount of tax dollars needed. The tax rate if the referendum passes (the property tax paid per $1,000 of assessed value) is projected to go:
a. Up 1.1% in 09-10 (from $9.92 to $10.03, or 11 cents)
b. Down 2.1% in 10-11 (from $10.03 to $9.81, or 22 cents)
c. Down 3.0% in 11-12 (from $9.81 to $9.51, or 30 cents)

I want you to know that this is part of a larger vision that the Board and Superintendent have for our schools and community. We are committed to initiating a community-wide strategic planning process this year. Outcomes will be used to make staffing, programmatic and budgeting decisions. We are looking at new models of Board-Superintendent governance based on models implemented in high achieving school districts. In all we are doing, community engagement is essential. We are working in synch to focus on student achievement.
This is not "business as usual" in the MMSD. This truly is a Partnership Plan. A successful referendum stabilizes our foundation. It gives us the time we need, with your input, to determine what we value in public education and what our children need to become responsible, successful citizens wherever their path may lead them in the 21st century.
More information on the referendum is available at www.mmsd.org/mmsdtv/refweb/
If You Want to Help
If you would like a yard sign, would like to host a coffee or would like to lit drop in support of the referendum, please let me know.
If you have any questions or would like more information, please do not hesitate to contact me.
Arlene Silveira

Why the school funding problem?

There's an article in the Fall 2008 edition of the Lafollette Policy Report that everyone with an interest in school funding should read. It's by Professor Andrew Reschovsky.

Dr. Reschovsky describes the heart of the problem very well. He writes:

"More resources are needed to
achieve improvements in the education performance
of children from poor families, students with disabilities,
and students who enter school with limited English
proficiency. Because of economies of scale, costs
per student are higher than average in small school districts.
In many cases, especially in northern Wisconsin,
the consolidation of schools and school districts is infeasible
because it would require extraordinarily long
bus rides for many students. Finally, to hire teachers of
comparable quality, some school districts must pay
higher than average salaries to compensate for the
higher costs of living in some areas of the state."

The challenge we all face is how to address this in a time of economic hardship for the state. Our need for well-educated people is greater than ever--but we're unlikely to have additional money to put into education. This will call for new, creative approaches to achieving our goals.

Dr. Reschovsky's article can be found at http://www.lafollette.wisc.edu/publications/policyreports/policyreport18_1.pdf