Planning & Financial Background
Predicting the need for an operational referendum
Operational funding is based on the revenue limit formula. The formula is complicated but, conceptually, it calculates the maximum amount of money a district receives by multiplying a set amount per student by a three year membership average. The amount a district receives per student can increase in two ways. The state can determine an increase in its biennial budget or a district can go to referendum. During the 2021-23 state budget, schools did not receive any increase in the amount they get per student. School districts were directed to use one-time federal COVID relief funds (ESSER) to balance budgets. SASD discussed this strategy at length at a number of public board meetings during the 2021-22 school year. While, using one time federal funds to pay for ongoing operational costs is not sound budgeting or a wise practice (similar to using a savings account to pay for monthly bills), the district determined that these funds were significant enough that we could manage our budget through the 2022-23 school year with this state directed strategy. We will balance our budget with the use of ESSER funds and some staffing reductions through 2023. It was predicted and communicated out to the community, that at this point, the district would need to reevaluate budget projections and available state information (e.g. will there be increased funding during the next budget cycle) to determine if it will pursue an operational referendum at that point to avoid reductions to programs and services for students.
Increased operational costs
As a service business, approximately 77% of our district’s operational budget is consumed by our payroll costs. Attracting and retaining high quality staff in an industry with employee shortages is a challenge. We strive to provide competitive wages and benefits in order to attract the best candidates to our district.
In addition to staffing costs, our district relies on numerous resources and services, such as textbooks, technology, utilities, transportation, and building maintenance to keep our schools running. Over the last few years, costs have increased significantly due to inflation.
State funding and enrollment
Current state funding increases are not keeping pace with inflation. Over the 21-22 and 22-23 school years, there were no increases in the funds the District received per pupil. This school year (23-24), the state government passed a $325 per pupil increase. Though we are extremely appreciative of the most recent increase in state funding, this 2.8% increase over the prior year revenue limit does not make up for the increases in operational costs due to inflation.
Additionally, the District's overall enrollment has been declining for about 20 years. The District is hopeful for the future as enrollment numbers have seemed to stabilize this school year (23-24). However, due to the previous decline in enrollment, the District has received less funding from the state over the years.
How do we compare?
A new report from Forward Analytics, K-12 On The Ballot: Using Referenda to Fund Public Schools, shows Wisconsin’s K-12 schools increasingly rely on dollars approved at referendums to fund local education.
In 1993, Wisconsin adopted a school funding formula that imposed revenue limits on school districts. This was in response to average annual school levy growth of over 9% in the early 1990s. Under revenue limits, K-12 school levies rose less than 2% in 13 years and less than 5% in 22 of 29 years. Since 1993, 356 of 434 school districts have put more than 1,500 operating referendum questions on the ballot, with 58% of them approved. From 2012 - Present, allowable increases in the limits have lagged average inflation. In six of eleven years, the limits were not raised.
Other area district operational referendums passed since 2019 include Deforest, Madison, Middleton Cross Plains, Monona Grove (twice), Mount Horeb, Oregon, Sun Prairie (twice), Verona, and Waunakee (twice).
2022 Facilities Referendum & the completed Anderson Complex
The projected operational budget deficits are unrelated to the 2022 Facilities Referendum or the completion and opening of the Anderson Complex and Collins Field. Both projects are slated to come in on budget. We are grateful for the generous support of our community and we eagerly anticipate the completion of these projects, as our students will benefit greatly from these important updates.