All property taxpayers, parents, community members, business community members, students and district staff wish to have their school board set policies that enable the highest level possible of excellent educational opportunities to students while exercising the utmost in fiscal responsibility.
Wisconsin’s funding formula for school districts sets aids that are shared from the state to districts, and the amount of aid is dependent upon property values within the district. The higher the property values, the less state aid received. Conversely, the less state aid received, the more districts look to their property taxpayers to fund their district.
Over the past 30 years or so, this responsibility has shifted more and more to residential property taxpayers and away from corporate property taxpayers. As a result, residential property taxpayers wish to have the complete picture of what taxes they are paying and why they are paying them (what is being funded).
The Chippewa Falls Area Unified School District has equalized state aids of over $27 million. All monies that remain unspent (in Fund 10 — the general fund) do not receive state aids.
It is important that the Fund 10 balance remain adequate to maintain proper cash flow, and so the district can maintain a favorable credit rating.
However, having more Fund 10 balance than necessary, in essence, has the effect of the district losing state aid monies. We only receive state aids on dollars that are spent. In other words, Fund 10 is not a fund for money to just sit, but proper levels should be maintained for cash flow. Fund balance should not be drawn down too low, but the fund also should not have more money than necessary, either.
Revenue limits were set by the state Legislature and took effect in 1993. These limits set a maximum amount of money that districts may raise (allocate) per pupil through their two primary sources of funding: state aids and property taxes. The Legislature committed to a level of 67 percent in general aid to districts, however it is now under 60 percent.
Revenue caps may fluctuate only due to changes in enrollment and/or the consumer price index. There are many variables that revenue caps do not effectively take into consideration, and therefore funding under revenue caps is very tenuous.
What happens if a district underfunds any of the categories it is responsible for? What happens if debt is not paid off?
The Chippewa Falls Area Unified School District is in a fiscally sound position and debt-free with the exception of local post-retirement benefits. The district has paid a vast majority of this estimated benefit but there is a remaining $9 million debt. Therefore the district has an excellent bond and credit rating. This is due to wise decisions having been made for the past several years, funding programs adequately so as to not fall short at the end of the fiscal year, and district planning with a vision for the future.
However the district has funding concerns and future potential financial obligations that the School Board must consider. Among those are salaries in some areas that are well below the average for Big Rivers Conference schools and capacity issues if additional classrooms are needed. And, of course, there is the debt obligation for post-retirement benefits.
While some may think it wise to underfund and/or go without fully funding this account, it is a debt that we carry and must honor. We have seen what has happened to businesses and public entities that have not funded critical accounts such as these, and the Chippewa Falls district not only funds this as a business obligation but as a human resource obligation.
To continue to operate without debt, without having to go to referendum, and with sound bond and credit ratings will not only help our district to be viable further into the 21st century but will also continue to empower us as a district of choice. Due to the state’s funding formula and dramatic cuts that have already impacted districts, there is little choice but to levy to the extent allowed under the law, allocate those funds wisely, and receive matching state aids accordingly.
It is tempting to underfund and/or to levy to a lesser degree, thus denying ourselves state aids, but doing so places the district at risk if a fund falls short, making a need for referendum and/or an increase in borrowing necessary. This in turn negatively affects our credit rating, our bond rating, and our vision for the future.
Please note that by submitting this, I do not presume to speak for the entire board, but rather am one voice on the board and as a board member feel an obligation to communicate this information.
Patricia B. Allen of the town of Anson was elected to the Chippewa Falls School Board in 2012.