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 through taxing less for the Community Services Fund (Fund 80) and using the Capital Expansion Fund (Fund 41). See answers 2 through 7 below for related information.
The referendum asks the community for the approval to spend more than the revenue limit will allow starting in 2009-10. 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.
The referendum is 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.
Superintendent of Madison Schools, Daniel Nerad
Why has a recurring referendum been chosen? Watch the video.
President of the Board of Education, Arlene Silveira
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.
The tax impacts are based on the best information available now and projected into the future:
A. The value of a home is projected to increase in 2010-11 and 2011-12 by 4% over the previous year.
B. The Maintenance Referendum - currently approved through 2009-10 - will be approved again past 09-10.
C. The school district will begin to use Fund 41 in the 2008-09 school year.
D. The school district will levy $2 million less in taxes for the Fund 80 portion of the budget for the 2009-10 year.
The Board of Education has directed the Superintendent to implement C and D.
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).
Assistant Superintendent for Business Services, Erik Kass
A. Because the tax rate is based on Madison property values and because Madison property values are projected to go up by 4% in 2010-11 and 20011-12, the dollar amount collected in taxes will increase by 4%.
B. Because the school district will use $2 million of the cash balance in the Fund 80 portion of the budget for operational costs, a lower amount of tax dollars will be needed for 2009/10.
C. Under the State of Wisconsin’s equalization aid formula, the Madison School District has to give back dollars to the state because Madison has higher than average property values and higher than average cost per pupil.
However, by using Fund 41, (funds are categories of the local budget) the district can spread the cost of capital projects over a longer period of time. This means the MMSD will receive more from the state and will rely less on the local property tax.
Assistant Superintendent for Business Services, Erik Kass, on lessening the tax impact
Assistant Superintendent for Business Services, Erik Kass, on Fund 41
A passed referendum will provide the funding to allow the school district to avoid the reductions necessary to stay under the revenue cap. Even then, some cuts will be necessary (see 5 above) since the funding via the referendum will not cover the full amount of the projected budget gaps.
There are no plans to add programs and services with referendum funding in the three year referendum period.
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 Madison's 2008-09 budget, 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.
The district has cut over $60 million in programs and services and has eliminated over 700 positions since revenue limits began in the 1993-94 school year.
a) the property wealth of any given community in Wisconsin, and
b) the school district's average cost per student.
A “property poor” community with a below average cost per student receives more state aid, while a “property wealthy” community with an above average cost per student will receive less state aid. Madison falls in the latter category.
The state aid formula (equalized aid) attempts to “equalize” the disparity in communities' property wealth and in districts' spending per student. Thus, in relatively property wealthy communities and where districts spend more per student -- such as Madison -- the district’s taxpayers are adversely affected by the state aid formula in that the district receives less aid or funding from the state --“negative aid.”
In the end, for every additional dollar of revenue authority granted by a referendum, the MMSD stands to lose state aid which in turn can only be replaced through additional property tax.
The funding from the referendum would, according to Supt. Dan Nerad, "provide MMSD students with a quality education and the kinds of skills that will allow them to function in this complex every-more-challenging world… It's not just simple work skills. It's people skills, problem-solving skills, thinking skills that our kids are going to need."
There's more on this Question from Supt. Nerad in the video below.
In addition to the $3 million budget shortfall (gap) that has been addressed in the 2009-10 budget, $5 million in cuts would be necessary.
The MMSD along with the community will go through a strategic planning process in the second half of this school year that will help to prioritize what the district should focus on. Possible budget reduction strategies will come from this process.
These cuts, coming after $60 million in budget reductions over the last 14 years, will have a direct effect on the classroom.
Supt. Dan Nerad says that the MMSD is not taking anything for granted in this referendum. The referendum plan addresses the needs of Madison students (seeking additional funding to maintain current programs) and the needs of taxpayers ($3 million in reductions for 2009-10, and Funds 41 and 80 - see 3 and 6 above).
There's more on this question from Supt. Nerad in the video below.
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.
There have been and there will be cuts of central office administrators. Central administrative positions have been reduced by over 20 positions -- equal to 34.4% -- in the last eight years. See table below.
In 2000-01 there were 59 FTE (full-time equivalent) central administrative positions funded through the operating budget. Due to cuts and to shifting of the funding for some positions to other sources (grants, reallocation from consultant fees,) there are 38.65 FTE central administrative positions funded through the operating budget this year.
In addition, some of the 38.65 central administrators are not truly administrators in that they do not supervise other staff members. They are service professionals such as attorneys and educational coordinators.
One of the most challenging government requirements for public schools is under-funded mandates. The two that most adversely affect the Madison public schools are special education aid and bilingual aid.
Both the state and federal governments require schools to provide services in these two areas, and case law has made it clear it is the local school district’s responsibility to provide the services. But the mandates are woefully under-funded.
In the 1993-94 school year, when state-imposed revenue limits began, the state provided almost 45% of a local school district’s expenses related to special education. Today, the state pays less than 29% of the mandates' costs. This is a loss of nearly $9.4 million per year in resources compared to the reimbursement rate when revenue limits began.
The same is true for bilingual aid. When revenue limits began, school districts were reimbursed for 33% of related costs; the current reimbursement is slightly more than 11%. This is a loss of $2.2 million per year in resources compared to the reimbursement rate when revenue limits began.
Combined, the loss of resources is $11.6 million per year compared to the reimbursement rate when revenue limits began. If the reimbursement rate was the same, the district would not be projected to have to cut $8.2 million from its cost-to-continue budget for the 2009-10 school year.
Legislative Liaison Joe Quick talks about state reimbursement
Madison Schools has worked with the major state education groups (teachers, school boards, school administrators) to talk to state legislators about how revenue limits are affecting the classroom. Members of the MMSD Student Senate have testified before the Joint Finance Committee during budget deliberations to tell personal stories. Supt. Art Rainwater (ret.) also testified at several legislative budget hearings to tell legislators the impact of revenue limits.
In 2007, then-Student Senate President Jacinth Sohi spoke at a Capitol news conference in support of Assembly Joint Resolution 35, which required the state Legislature to make changes to the school funding formula by July 1, 2009. All eight members of the Madison state legislative delegation were co-sponsors of the measure, and Rep. Sondy Pope-Roberts, who represents part of Madison, was the resolution’s main author.
Working in concert with the state’s education groups, MMSD advocated a funding increase for special education and bilingual aid for the 2007-09 biennial budget. The final budget increased special education funding by $17.4 million for the 2007-08 school year and $36.1 million for the 2008-09 school year. It is estimated that MMSD will receive an increase of $2.75 million during the two year period. Bilingual aid was increased by $3 million in the last state budget, providing an estimated $100,000-plus to the MMSD.
MMSD has also worked with parent groups and other local education advocacy groups to talk to their legislators about their concerns related to school funding. The district will continue to press this issue in discussions with legislators about school funding.
A group of representatives of statewide education groups, the School Finance Network, has been working for nearly a year to develop critical elements of a new school funding formula. MMSD will continue to work with its state partners on pushing the Legislature to make changes to how Wisconsin's schools are funded.
A "yes" vote means the school district will have the authority to exceed the annual revenue limit by the amounts specified.
A "no" vote means the school district will not have the authority to exceed the annual revenue limit by the amounts specified.
Here is the wording that voters will see on the November 4 ballot:
“Shall the following Resolution be approved?
AUTHORIZING THE SCHOOL DISTRICT BUDGET TO
EXCEED REVENUE LIMIT FOR RECURRING PURPOSES
BE IT RESOLVED by the School Board of the Madison Metropolitan
School District, Dane County, Wisconsin that the revenues included in the School District budget be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, for recurring purposes by: $5,000,000 beginning in the 2009-2010 school year; an additional $4,000,000 beginning in the 2010-2011 school year (for a total of $9,000,000); and an additional $4,000,000 beginning in the 2011-2012 school year (for a total of $13,000,000 in 2011-2012 and each year thereafter).”
The cost to the district to add a referendum to the ballot is estimated at between $30,000 and $32,000. The costs of an election are pro-rated among all units of government participating in the election. The costs include ballot printing, poll workers and other expenses related to managing and running the election.