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REFERENDUM QUESTION

BE IT RESOLVED by the School Board of the Southwestern Wisconsin Community School District, Grant and Lafayette Counties, Wisconsin, that the school district be authorized to exceed the revenue limit specified in Section 121.91(2m), Wisconsin Statutes, by $750,000 per year beginning with the 2024-2025 school year and ending with the 2027-2028 school year, for the non-recurring purpose of providing for the operational needs of the district.

THE DISTRICT IS IN NEED OF ANOTHER OPERATIONAL REFERENDUM, given that the one held last April fell short by a mere 13 votes. To cope with budgetary challenges, the district implemented a series of cost-cutting measures, including a reduction of $800,000 from the budget for the current year. These measures encompassed a shift from self-funded to fully-insured insurance, a delay in ordering supplies for classrooms, the non-replacement of four staff members, and a reduction of one staff member to 50%. Unfortunately, these actions resulted in the elimination of programs for students, adversely impacting their educational experience. Despite never having sought operational funds from the community before, the district now finds itself compelled to do so due to the combined effects of inflation and a shortfall in state funding. Your assitance is crucial to reinstate these programs, allowing us to provide the quality education our students rightfully deserve.

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The state currently maintains a budget surplus exceeding 7 billing dollars. However, in the previous biennium budget, the state encountered a fiscal challenge by not allocating additional funds to school districts. This occurred as the federal government provided "one-time" COVID funds for schools to address pandemic-related needs. In the most recent budget cycle, the state increased the low revenue limit from $10,000 to $11,000 per student, a positive step but insufficient to bridge the financial gap. Amidst record-high inflation, the absence of additional funds exacerbates the situation. The lack of equitable funding from the state has contributed to the statewide financial predicament.

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Q&A

Q: Why is the district in this predicament? How can this happen or why?

A: The funding structure implemented by the state of Wisconsin three decades ago established fixed per-pupil aid in the state at $11,000/student, while other districts get $12,000 to $14,000 per student. This, combined with the fact that revenue caps have not kept pace with inflation or the Consumer Price Index (CPI), has led to a significant funding gap. Compounding the issue is the realization that the current revenue cap, in place for the past decade, remains stagnant. Operating schools with funding levels equivalent to those from a decade ago has become increasingly impractical. The existing financial framework poses challenges to providing quality education, and there is a pressing need for a reevaluation of the funding structure to ensure schools can meet the evolving demands of education and adequately support students.

Q: What happens if the referendum fails?

A: If it does not pass, the district will experience a significant shortfall in necessary funds. This will likely result in additional cuts of programs and offerings. We will need to continue to go for an operational referendum until it passes. Additionally, per State Statute 121.905, the district's base revenue per student is frozen at the current amount for 3 years or until an operational referendum is approved by district voters. The district has already implemented substantial budget cuts, negatively affecting various programs. Despite these reductions, there is a concerted effort to reinstate these programs for the benefit of our students. If a failed referendum happens again, the district stands to lose funding from the state because of the failed referendum.

Q: Why $750,000 per year for 4 years?  

A: Historical evidence shows that the state has consistently failed to allocate sufficient funds for schools to keep pace with the escalating costs of inflation. This annual sum, spread over the next four years, aims to improve the district's financial standing, enabling us to attract and retain staff while maintaining essential programs for our students.

Q: What if the state allocates more money to schools. Will the district levy the full amount they are asking?  

A: The district will only levy the amount needed to maintain operations. If the state allocates additional monies to the school, then we will only levy the amount we need to maintain our budget.

Q: What are ESSR Funds and how does this impact the schools budget?

A: ESSR funds, or Elementary and Secondary School Emergency Relief funds, represent one-time allocations to schools to address staff, programs, and operational needs arising from the impact of COVID-19. The district received roughly $700,000, intended to be used over a 3-year period. These funds were fully exhausted at the end of the 2022-23 school year causing a fiscal cliff, forcing us to go for an operational referendum. In short, these allocations served as a temporary bridge in our current budget until a more sustainable funding solution is secured through a referendum.

Q: How much will my taxes increase?

A: In the event of a successful referendum, your property tax rate is anticipated to stay steady with no projected increase. However, this projection is contingent upon state funding. Should an increase occur, initial estimates suggest a potential rise of approximately $30 over the course of four years. It's important to note that the final outcome hinges on the state's decisions regarding school funding.

Q: How can the district pass this referendum and not increase taxes?

A: The likelihood of passing this referendum with minimal or no tax impact is attributed to the district's proactive approach in debt reduction. Through effective financial management, we have successfully retired the debt associated with the athletic field and other loans. This prudent fiscal strategy not only positions us to seek voter approval for utilizing these funds for operational costs but also reflects our commitment to responsible stewardship.

Q: What is the difference between capital and operating referendums?

A: In a capital referendum, funds are borrowed and paid back with interest. This type of referendum is most often used for building projects. In an operating referendum, there are no interest payments because there are no borrowed funds. The referendum amount is levied each year (pay as you go) and is more cost-efficient for the community.

Q: What has the district done to be fiscally responsible? 

A: The district constantly pursues grants to support ongoing programs. When these grant funds expire, the district absorbs the associated costs within its budget. Moreover, the district has successfully increased the amount of state aid received, enabling faster debt repayment and, consequently, saving taxpayers on interest from previous referendums. Notably, the athletic field referendum will be fully paid off seven years ahead of schedule, resulting in over $250,000 in interest savings for taxpayers. 

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