No Greenbacks for Green Schools — Penny Wise and Pound Foolish

Click on the picture for a very cool interactive vesrion for the Wiscvonsin Department of Natural Resources.

Click on the image for a very cool interactive version from the Wisconsin Department of Natural Resourses.

Ray Charles, Greenback Dollar (click to listen or download).

In many, many ways the Wisconsin school finance system is-in-and-of-itself penny wise and pound foolish. Beyond the general truths that a lack of investment in the education of our children weakens our future competitiveness, depresses the earning (and taxpaying) potential of the coming generations and lead to increases in social service and criminal justice spending (see the work of The Center for Benefit-Cost Studies of Education), our school finance system also precludes many districts from making the kind of investments that in the relatively short term will create great savings. Because of endless cycle of annual same service budget cuts created by the revenue limits, districts are rarely able to look even one or two years ahead for savings to be realized. Energy efficiency is a prime example of this.

Lt. Governor Babara Lawton has spearheaded an Energy Star School Challenge initiative (MMSD has accepted this challenge). This is good program, but there are no funds attached to participation and without funds even the program’s modest goal of a 10% increase in efficiency is beyond the means of many of our cash strapped school districts.

Some districts have taken matters in their own hands and have gone to the voters with referendums to fund energy efficiency investments. In April of 2007, the voters of the Rice Lake District approved $3.88 million for an upgrade of an 1980s era system. Superintendent Paul Vine said, “We use the savings to try to maintain and support other student educational programs.” A failed boiler at Waterloo High School led to school officials to investigate an upgrade. In February of 2008, voters in the Waterloo District approved $1.5 million to replace a 50 year-old boiler that was 60% efficient with a new 98% efficient system. As a news story noted:

Without voter approval to exceed the state-imposed revenue caps, the board would have had to cut educational programs to pay for a new boiler. Revenue caps limit the amount of money a school district can raise through the property tax levy. The project is nothing the district can do within its budget officials have said.

The Colby district is going forward with a similar referendum. The current system operates at 50% efficiency, the upgrade would be 95% efficient. The financial numbers are good, in the longer term:

A district-wide upgrade of heating, ventilating and air conditioning systems would cost about $841,000, but it would pay for itself in a little more than nine years and save the district over $92,000 annually, according to the study.

Like Waterloo, Colby can’t make the investment required to realize these saving without going to referendum. meanwhile, Colby struggles to with annual same service cuts like most other districts in Wisconsin. Two failed operating referenda in 2006 have already led to the closure of a school and an early learning center, and cuts to “classes like agriculture, foreign languages, business, consumer ed, music, and art” are now being contemplated (thanks to Terri Wiersma of the Marshfield News Herald for information and a local perspective).

The Colby referendum will also seek to  refinance existing debts at a lower the interest rate. High interest rate debts and obligations, particularly those associated retirement benefits, are a growing problem for many Wisconsin districts. the inability of districts to do the fiscally responsible thing by refinancing is yet another example of the “penny wise and pound foolish” choices our school finance system creates. I’ll probably be posting more on this in the future.

Efficient word burning, like that sought by Colby, is also more sustainable than fossil based fuel consumption. A study by the Biomass Energy Resource Center concluded that:

Biomass heating in schools holds great promise to advance renewable energy policy, stabilize and reduce school heating costs, benefit the local economy, support the forest products industry, and reduce greenhouse gas emissions.

So we can add global energy and greenhouse gas issues to the growing list of benefits that our state school finance system makes it difficult to realize. While I’m at it, I want to point out that the long bus rides caused by school closures, mergers, consolidations and dissolutions forced on districts by the state finance system aren’t helping the environment or energy consumption.

Currently about eleven districts on Wisconsin are using wood heat. There is a nice report on the Barron system here. Barron saves an estimated $100,000 a year via efficient wood heating and cooling. That’s money that is instead being used to educate students.

What a great idea, too bad our state finance system puts short term property tax cuts ahead of education.

Penny wise and pound foolish.

Thomas J. Mertz

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Filed under "education finance", AMPS, Best Practices, Budget, education, Elections, finance, Local News, Referenda, referendum, School Finance, Uncategorized, We Are Not Alone

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