Category Archives: School Finance

Quotes of the Day (We are Not Alone #17)

Chetek School District begins considering an operating referendum.

“What we heard loud and clear from the community was that we want everything and more for our kids…Obviously, with our budget dwindling, we’re going to have to do something to meet the expectations of the community.”

Genie Jennings, President Chetek School District, Board of Education

“I think we have to do it. It’s not a debatable issue. The question is, ‘Is it going to be a community-wide effort with help from the board?’…I think the community will pay for what they perceive as quality, performance and value,…Doing more with less may actually happen, but to provide good services frugally, and to be competitive, we’re going to have to create more opportunities for students. That is the real focus.”

Ken Jost, Member Chetek School District, Board of Education

Thomas J. Mertz

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We are Not Alone #16

The woes associated with the lack of action on the state budget and the fears created by the draconian GOP positions are not confined to MMSD.

This from the Prairie Farm School District:

The political wrangling has more immediate consequences, however. School districts don’t know how much state aid they will receive for their 2007-2008 budget cycles, and counties are uncertain how much in shared revenues they can count on from the state, either.

Statutes provide a guarantee that, while waiting for an official budget to be adopted, these institutions can expect to continue receiving the same compensation levels that they had enjoyed the year before. But some say that provision isn’t a cure-all.

Prairie Farm School District Superintendent Don Hauck said that his district has been affected by the bogged-down state budget. Despite a successful referendum last spring, some planned school projects, such as upgrading HVAC systems, have been placed on hold until more solid figures on 2008 state aid are available.

Hauck also noted that schools will still receive 2007 state aid levels while the 2008 budget is hammered out, but the status quo may be insufficient, since operating costs continue to rise. If more state aid for schools doesn’t materialize, then the difference might have to be made up through increased property taxes.

Thomas J. Mertz

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Why the State Budget Matters to All of Us

From the Capital Times

But school district spokesman Joe Quick said several provisions in the Assembly Republican budget could still create shortfalls or other problems for Madison schools.

Chief among those is funding for SAGE, the program that creates smaller class sizes for at-risk students. As part of a deal to allow the Milwaukee school choice program to expand, Doyle proposed increasing funding for the SAGE program by $250 per pupil. Assembly Republicans cut that money, Quick said, which would mean $716,000 less for Madison schools, Quick said.

Another GOP proposal aimed at reducing health care costs in schools would hit even harder. The Republican budget would freeze the amount local schools could raise from property taxes at $200 per student, instead of the $264 allowed by current law, if districts adopt health care plans that are more expensive than the state’s insurance plan.

That provision would force a $5 million cut because the district has already approved its contract with Madison teachers, Quick said.

“We’ve got contracts in place. We can’t lay off people now” to recoup those losses, he said. “Any cuts that would have to be made would get pushed off until the 2008-09 budget.”

This madness has to stop. Make your voices heard (info here)

Thomas J. Mertz

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John Smart on the State Budget

I’ve had the pleasure of working with John on Wisconsin Allaince for Excellent Schools matters. He get’s it right.

Thomas J. Mertz

“The Department of Public Instruction (DPI) set Friday, Sept. 28 as the deadline for getting a final 2007-09 state budget through the state Legislature in order for the department to have time to run the complicated equalization aid calculation and inform districts of their 2007-08 aid by Oct. 15 as required by statute. If the Legislature fails to meet that deadline, the DPI will have little choice but to use the 2006-07 equalization aid numbers.”

The preceding is from today’s email to members from the Wisconsin Association of School Boards, and points up the serious problem that we’re facing in our schools due to the legislature’s utter failure to responsibly deal with our state’s budget.

Today I also attended a meeting in Mosinee of the new steering committee for the Wisconsin Alliance for Excellent Schools, followed later by a joint meeting of the school boards of Park Falls and Butternut, which are negotiating a possible consolidation. Whenever the subject of the legislature and the budget came up, and believe me, it came up, it was met with hoots of derision!

The following is my most recent commentary from THE-BEE, for your edification.

John Smart

Commentary by John Smart
The Budget
THE-BEE, Phillips WI
Opinion Column
Last updated: Thursday, September 06th, 2007 09:03:09 AM

Definition: A budget is a description of a financial plan. It is a list of estimates of revenues to and expenditures by an agent for a stated period of time.

We all have budgets. Most of us don’t write them down, but we know how much income we have and how much we can spend in order to not go into debt – too far, anyway. We plan for necessities like food, shelter and basic health care, and then determine what else we might be able to afford — like maybe a vacation trip or a new boat. And, if we do go into debt, to buy a house or a vehicle or whatever, we plan how we’re going to pay that debt off.

Governments have budgets, too. In Wisconsin, as in most states, we have a biennial budget, a plan for two years, which means that every two years the governor proposes and the legislature disposes, often essentially writing their own version.

But the governor of Wisconsin has a very powerful veto option, which allows him [or her] to alter the budget by deleting and/or rearranging language, so the budget can change again in the governor’s approval phase. [Many politicians noisily disapprove of this powerful veto option — usually the ones who are not in power!]

Also, in most states and the federal government, the budget must be passed in a timely manner or the government simply grinds to a halt. In Wisconsin, however, we have a provision that allows the government to just continue on, following the old budget, while deliberations continue. And that’s what’s happening now.

Gov. Jim Doyle presented his version of the budget to the Legislature in February, and the Joint Finance Committee of the Senate and the Assembly held public hearings and private deliberations and eventually passed their version in June. They sent that budget to the full Senate and Assembly for passage. The new budget for 2007 through 2009 was supposed to be passed by July 1st — but it wasn’t.

As of now, Wisconsin is the only state in the nation that does not have a budget. [Illinois and California passed theirs recently, leaving us all alone.] We are becoming a national joke.

The State Senate passed its version of the budget, built on the governor’s and the Joint Finance Committee’s proposals, and adding their own ideas. But then, the Assembly sailed off on its own course, passing a very different budget indeed. These two budgets have almost nothing in common. They seem to have come from two different states!

So, they formed another committee to somehow blend these two into one workable budget that can then be passed by both bodies and returned to Gov. Doyle, who will work his own magic on it. One good point for us, up here in the Northwoods, is that two of our own, Senators Russ Decker [D-Weston] and Bob Jauch [D-Poplar], serve on this committee. For a change, we won’t be dictated to by the more populous parts of the state!

But — in the meanwhile — our local schools and our great state university can’t finalize their own budgets because they don’t know what the state budget will eventually allow them. The same uncertainty is true for municipalities and other state entities.

Assembly Republicans have suggested appropriations that would negatively impact our local school districts, that would starve the UW Law School into oblivion, that would cut state funding for the UW Extension, seriously affecting our excellent public radio and television services as well as other Extension programs like 4H.

Healthy Wisconsin, the health care reform plan proposed by Senate Democrats, is under intense debate, with groups like Wisconsin Manufacturers and Commerce [against] and Citizen Action of Wisconsin [in favor] battling it out in competing public meetings around the state. This traveling circus includes a giant statue of a pig, bought and paid for by an out-of-state, right-leaning organization called Americans for Prosperity, that is carted around the state to protest what they see as gross expenditures.

A Town Hall Meeting on Healthy Wisconsin will be held on Sept. 17 at the Taylor County Community Center on the fairgrounds in Medford starting at 6:00 p.m.. The special guest will be State Senator Kathleen Vinehout [D-Alma], one of the authors of the Healthy Wisconsin plan. Please come and learn more about the plan.

Environmentalists are alarmed that the Assembly Republicans want to slash the state’s Knowles-Nelson Stewardship Fund, which buys up forest land that is being sold off, primarily by large timber interests, in order to preserve such land for recreational use by future generations.

The Legislature’s Republicans are digging in their heels, however, and tell their constituencies that they are just trying to keep from raising taxes. But, of course, they tried to get sales tax relief for people who deal in gold bullion — doubtless a huge number of needy Wisconsinites. They also removed the governor’s proposed tax increases on cigarettes and the big oil companies.

Wherever you stand on these issues, there is a reality here that should be addressed: the Democrats hold the upper hand. We have a Democratic governor and State Senate. Republicans control the Assembly, but only by a three vote margin. The budget will probably go the Democrats’ way no matter how long they drag it out.

Clearly the Republican strategy is to talk loudly about cutting taxes and programs, which will appeal to their own conservative constituency. Perhaps this is a good long-term political plan, but it does little to advance the state’s immediate needs.

Do we really want to abolish the UW Law School or public broadcasting? Do we really want sales tax relief for gold bullion investors and big oil companies? Don’t we really want good schools and health care for those who need it — and a workable budget in place?

Remember, the fiscal year started on July 1st.

John Smart lives in Park Falls, is a member of the Wisconsin Governor’s Commission on the United Nations, the UN Association of the USA and Citizens for Global Solutions. He was a Peace Corps volunteer in Uzbekistan from 1995 through 1998, serves on the Park Falls Board of Education and chairs the Democratic Party of Price County.

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Two Legged Stool

The Wisconsin school finance “system” is often called a “three legged stool,” with the legs being 2/3 funding from state revenues (1/3 from local and federal sources), the QEO to limit teacher contract costs and the revenue caps to limit local property taxes (note that this is mostly about tax issues and not about education).

The Legislative Fiscal Bureau just released an analysis that shows 43.8% of the districts in Wisconsin receive less than 65% of their revenues from the state.

Two legged stools are designed to fail. So is our school finance system.

Thomas J. Mertz

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Charter Problems in Oshkosh and Appleton

$600,000 of federal funding for charter schools that the Appleton district was counting on and $150,000 of funding for Oshkosh is in jeapardy.

At issue is the degree of autonomy the charters enjoy. In order to receive the monies, the schools must give the federal authorities “proof showing that the charter schools have autonomy in such areas as curriculum, budgeting and governance.” In Wisconsin, charter schools are legally “instrumentalities” of their school districts, an arrangement that may make it impossible to meet the federal requirements.

Barb Herzog of the Oshkosh district explains the predicament:

Barb Herzog, executive director of administration for the Oshkosh school district, said while all three schools already have their own governing board, the district doesn’t have an interest in making charter schools totally independent of the school board because there aren’t funds to do that.

Herzog said if the charter schools were to become totally independent they would have to become responsible for staffing, building, insurance and other costs on their own.

“Even though the charter grants are substantial, it still wouldn’t be enough money to do that,” Herzog said. “They rely on support from the district.”

Never count your chickens until they hatch; never count your federal money till the check is cashed.

Thomas J. Mertz

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Quote (paraphrase) of the Day

From State Superintendent Elizabeth Burmaster’s “back to school” interview (more here).

One thing the superintendent says schools need as soon as possible is a state budget. School districts have a sense of apprehension she says because they don’t know if allocated state aid will meet growing operational costs.

Thomas J. Mertz

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We are Not Alone #15

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

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    Where is the Outrage? Where is the Anger?

    From Marjorie Passman (excerpted in the Capitol Times, full version below).

    Where is the Outrage? Where is the Anger?

    Has anyone noticed the education budget proposed by the State Assembly? If so, where is the outrage, where is the anger?

    Because of the Republican promoted revenue controls on school districts, Madison schools have been compelled to reduce services by roughly 60 million dollars over the past dozen years. For the first time they have increased class size in elementary schools; the opposite of what should be occurring to promote increasing quality education, and next year’s budget cuts will reach into every curricular and extra-curricular area – there is nothing that will be left untouched. So how does our State Assembly plan to help? It proposes to fund our schools at $1200 less per student than the national average. Wisconsin should be THE leader in public education, not less than average. Our children deserve better.

    According to the Wisconsin’s Department of Administration, rough estimates of revenue limit reductions under the Assembly 2007-09 Budget Plan seem to indicate that MMSD will be reduced by $4,932,419, and we will lose 66 teachers as a result. In fact, all school districts will suffer. Ashland’s total revenue loss is $444,902 with 6 fewer teachers, the Green Bay area will see a $4,008,270 loss with 54 fewer teachers, and Chippewa Falls will be down $966,865 so 13 teachers will have to be released.

    Lest parents think that they can move out of Madison to nearby school districts, think again. The combined losses of the McFarland, Middleton-Cross Plains, Monona Grove, Oregon, Sun Prairie and Verona School Districts comes to a whopping 5 million dollars with a corresponding decrease of 59 teachers. There is nowhere to run.

    And don’t fall for the claim that more money is actually going into education. More money may be going into the general fund for tax property relief but it is not earmarked for education. We all know by now that such undirected spending never finds its way into our children’s classrooms.

    No longer can anyone claim that our state spends big bucks on education, that government spending must be brought under control by slashing taxes. It is certainly time to bury these old misconceptions, and to end this stubborn impasse on educational spending. The new school year is upon us. Shouldn’t the citizens of our state know what their school budgets will be before classes begin?

    Our children deserve better than this political nonsense.

    Marjorie Passman

    There is a lot of outrage in our house, and from groups like, Take Back the Assembly. Now we just have to keep spreading the outrage!

    Thomas J. Mertz

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    Who is to Blame?

    (Hint, it isn’t the Oshkosh Area Board of Education.)

    State Rep. Carol Owens (R. Oshkosh) issued a press release opposing school closings in the OASD. Owens voices such admirable thoughts as: “Our small community schools are
    the backbone of the community,” and ““Our smaller, local schools need to be supported and not divided.” Bravo Representative Owens.

    Of course sentiments divorced from actions are easy. Rep. Owens is in a position to work for meaningful state finance reform or at very least support the band aids and revenue limit increases in the JFC (or Senate or Governor’s) budget that would help some of the districts like Oshkosh and Madison avoid the draconian choices they face and truly allow Boards of Education keep under enrolled but vital schools open. Instead Owens votes the party line and our schools suffer.

    Before posting this I tried to get a handle on the situation in Oshkosh and although it is a relatively low spending district, there are many things that parallel Madison. Strings programs are perennially targeted for cuts. Enrollment is relatively stable, but growing on one side of town and shrinking on the other. As Owens noted, attempts to deal with this (and the budget contraints of the state finance system, I’d add) have divided the community.

    It is hard to say how intentional it is for some who resist adequate funding of education but the divisions created and the loss of popular programs because of fiscal pressures under the current system do result a loss of faith in and support for public education and that is certainly the long term goal of many anti-government, free market zealots.

    Thomas J. Mertz

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