One of the things about school budgeting in Madison (and Wisconsin) that is not well understood is that the “budget” passed by the Board of Education in the Spring or Summer is at best a compilation of educated guesses. The headline from this story on the Onalaska district says it all:
Onalaska school budget set … sort of
The maneuvers with the MMSD budget this Spring confused many, partially because it wasn’t obvious how much guess work was involved (the fact that in order to “balance the budget” administrators and Board members bandy about numbers like $2746.34 as if they were real exacerbates this confusion). Here is a partial list of items that were projections or guesses this Spring in Madison:
How many students in the district
Where these students would be
The terms of the teacher contract
The terms of the educational assistant contract (unsettled for over a year and still pending)
The level of allowed revenues per student under the revenue caps
The definition of state categorical aids
The amount of state categorical aids
Private and governmental grants
The costs of utilities
Under these circumstances it is understandable that the district can and must “find money” for many unanticipated expenditures as the year goes forward and the Board and/or administration revisits decisions and projections. These kind of “changes” only appear problematic because few grasp how contingent and tentative the “budget” is.
MMSD has historically produced budget projections within 1% of the actual total expenditures (they are rightly proud of this), but individual budget lines vary greatly from the projections (I did some random checking some months ago and found multiple variances of 15% or more). Even the 1% in a budget of nearly $340 million is $3.4 million.
Usually by this time of year (even in year when the state biennial budget is passed) some of the pieces begin to fall into place. This year the political dickering over the state budget has left much unsettled as the school year begins. Back to Onalaska:
One problem with the budget is no one knows where the money will come from or how much local property taxpayers will have to cough up for the year. That is because the Wisconsin Legislature has not come up with its own budget and set the amount it will give to local school districts. The state pays approximately two-thirds of the school budget.
“There are numbers on the page but we won’t know the big numbers until October,” said Larry Dalton, the district’s finance director. He predicted a local tax levy of about $11.2 million, which would mean a higher levy than last year but a much lower tax rate for taxpayers. Dalton said the rapidly rising equalized valuation in the school district — now more than $1.6 billion — means the tax rate will be 2.2 percent lower than last year.
If the state comes through with about the same proportion of costs as it did last year, Onalaska taxpayers would have another historic low in the local tax rates for schools at about $7.26 per thousand in property value.
This last line points to another area of confusion, one I intend to explore at greater length in another post. For now I just want to emphasize that often in Madison and elsewhere, school districts both reduce their mill rate (level of taxation) and increase their spending (due primarily to a growing tax base).
Thomas J. Mertz
AMPS 