Referendum Election InformationBig Foot Union High School

Board of Education

March 2013

Understanding the Budget and Fiscal Picture

• Sources of Aid and Revenue for BFHS• State Aid• Federal Aid• Carl Perkins- CTE/Vocational and Career Ed.• Title 1• Rural Grant

• Property Taxes Levy Revenue

Budget and Fiscal Picture – State Aid/Revenue

• State Aid• State aid to schools is computed by a complex formula based on property

values, student enrollment and other factors• The Wisconsin Budget Repair Bill – 2011 Wisconsin Act 10 cut state aid to

95% of K – 12 districts by 10%• Property-poor districts get more aid than property-rich districts because

they have lower property taxes • BFHS is a very low state aid district because of its high property values

• State aid accounts for less than 2% of BFHS district annual revenue• Total state equalization aid received by BFHS• 2010/11 - $120,670 (Pre-Budget Repair Bill)• 2011/12 - $108,628• 2012/13 - $92,229

Budget and Fiscal Picture – Federal Aid/Revenue

• Federal Aid• Federal Aid is separate from State Aid and was not impacted

by the 2011 Wisconsin Budget Repair Bill• Federal Aid supports many existing programs at BFHS• There is no guarantee of Federal Aid • Federal Aid Sources• Carl Perkins- CTE/Vocational and Career Ed.• Title 1• Rural Grant

Budget and Fiscal Picture – Property Tax Levy

• Property Tax Levy Revenue• The Property Tax Levy Limit for schools is computed by a complex formula based on property values,

student enrollment, state aid, exemptions and other factors• Complex Revenue Worksheet Calculation – As simply as I can put it

• The state sets a Base Revenue per pupil (it may increase or decrease this amount in its budget) which is then multiplied by the 3 year average number of students to arrive at a revenue limit

• Several exemptions and adjustments are applied to establish the Fund 10 – General Operations Revenue Limit• Declining Enrollment exemption, Transfer of Service adjustment, Hold Harm non-recurring

exemption, State Aid adjustment, Non-referendum Debt, etc.• Other referendum approved debt (i.e. the 1999 building referendum – Fund 30) and other items are

then added to establish the Total All Fund Tax Levy• The Total All Fund Tax Levy is divided by the district’s Equalized Assessed Property Value to calculate the

Mill Rate• Note – the Mill rate does not determine the amount of tax levied. The amount of tax levy divided by

the district’s total assessed property value determines the Mill Rate• The general educational operations of the school are funded by the Fund 10 revenue• There is a general misconception that because BFHS is a rich-property tax district some of the district’s

property tax revenue goes to low-property tax districts in the state– this is NOT the case. All BFHS district property tax revenue goes to BFHS

Wisconsin Budget Repair Bill of 2011 – Act 10

• Impact of Wisconsin Budget Repair Bill of 2011 – Act 10• In 2011 Act 10 legislation cut the average per pupil allocation (for Fund 10 - General

Operations) by approximately $500 across the state for 2011 and beyond• Because BFHS is a property-rich tax district its per pupil allocation was reduced by $681 per

student in levy authority for 2011/12• Therefore, the 2011/12 the per pupil reduction and additional state educational budget cuts

reduced BFHS district tax levy revenue by approximately $490,000 from the pre-Act 10 level• In 2012/13 the state increased the per pupil allocation by $50 however other cuts and

adjustments further reduced the BFHS district tax levy revenue by approximately $525,000 from the pre-Act 10 level

• The net impact in BFHS district tax levy revenue for 2011/12 and 2012/13 was a loss of approximately $1,015,000

• Fund 10 –General Operations Revenue by year• 2010/11 - $6,501,548 (Pre-Act 10)• 2011/12 - $6,009,484 ($6,638,108 less one-time Energy Efficiency Exemption of $628,624)• 2012/13 - $5,977,258

• A provision in the budget repair bill restricts the options of what districts can collect in property taxes and other revenue by requiring a referendum to replace the loss of state aid

Wisconsin Budget Repair Bill of 2011 – Act 10 Budget Tools

• BFHS enacted the tools asked for in Act 10 to reduce expenses• 50% retirement contribution• 12.6% of health care premiums• Modified post retirement plans

• These tools helped reduced the salary expense in the BFHS budget but were not nearly enough to offset the loss in revenue and aid from Act 10

Budget and Fiscal Picture – Budget Impact

• BFHS Budget Impact• District aggressively cut departmental budgets to reduce

expenses and try to balance the budget• District did not replace support staff who retired or left the

district• District cut and/or deferred technology, maintenance and capital

spending to reduce expenses • Even with budget reductions the General Fund balance has been

required to balance the recent budgets• 2010/11 - $110,492 (Actual)• 2011/12 - $199,218 (Actual)• 2012/13 - $194,793 (Projected)

Budget and Fiscal Picture – General Fund Balance

• What is the General Fund Balance?• This is the excess savings that the district maintains to fund operations, collateralize short-term

borrowing and long-term projects, and provide a safety net for the school

• Why is fund balance important?• Impacts short-term borrowing rates

• Since the revenue from the tax levy comes to the school in one lump sum schools borrow short-term funds in the open market by using the General Fund Balance as collateral

• The short-term interest rate that the school pays in the open market is based on the fund balance as a percentage of expenditures

• The higher the fund balance percentage, the lower the borrowing rate charged

• Impacts bond ratings of the district for larger projects and expenditures

• What level of fund balance is considered good for a district?• Generally, a 15% – 20 % fund balance is required to receive advantageous rates

• BFHS current fund balance percentage• 2011/12 - 13.70%• 2012/13 - 11.96%

• The proposed referendum is projected to bring it up slowly to desired levels• 13/14- 12.5%, 14/15- 17.29%, 15/16-18.70%, 16/17-19.34%, 17/18- 16.36%

Fund Balance Levels

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

0

5

10

15

20

25

13.711.96 12.5

17.2918.7 19.34

16.36

Fund Balance %

Fund Balance %

Tax Levy, Property Values and Mill Rate

• District tax payers are annually levied the Total Fund Levy amount as determined by the per pupil allocation in the state budget multiplied by the 3 year average of students

• Property values may rise or fall but do not impact the amount of tax revenue the district can levy

• What is a mill rate?• The Total District Fund Tax Levy divided by the District

Equalized Property Tax Assessed Value• Represented as the dollars assessed in taxes per thousand

dollars of equalized property value

Referendum Tax Levy Impact

• In 2013/14 the initial $300,000 recurring tax revenue from this referendum will add to the existing tax levy amount

• On March 1, 2014, the final $1.2 million annual loan payment from the 1999 school addition and remodeling referendum is to be made

• Therefore, in 2014/15 and beyond:• the $1.2 million building levy is removed from the tax levy• the $650,000 recurring tax levy from this referendum is added• the net effect is a $550,000 reduction in total district tax levy

• What impact does this referendum have on mill rate? (Projected)/thousand• 2013/14 - $3.45 (up from $3.20)• 2014/15 - $3.22 (down from $3.45)• 2015/16 - $3.14 (down from $3.22)• 2016/17 - $3.07 (down from $3.14)• 2017/18 - $2.91 (down from $3.07)

• Note: In 2015/16 and beyond – Our projections assume that property values begin to rise potentially reducing the mill rate further

Projected Mill Rate

2012-13 2013-14 2014-15 2015-16 2016-17 2017-182.62.72.82.9

33.13.23.33.43.5

3.2

3.45

3.223.14

3.07

2.91

Mill Rate

Mill Rate

Individual Tax Payer Impact

• What will the cost be to me in extra taxes? Assumption based on Baird Model projection of proposed BFHS referendum

• In 2013/14, the initial $300,000 referendum revenue limit increase is projected to increase property taxes by $25 for each $100,000 of assessed value• Assessed Value: $100,000 => $25.00 (Estimated)• Assessed Value: $400,000 => $100.00 (Estimated)

• In 2014/15, the combination of the end of the annual $1.2 mil 1999 building referendum payment and the additional $350,000 referendum revenue limit increase will bring the mill rate back down to pre-referendum levels

Projected Tax Impact

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18260270280290300310320330340350

320

345

322314

307

291

House Value 100,000

100,000

Projected Tax Impact

2012-13 2013-14 2014-15 2015-16 2016-17 2017-18520540560580600620640660680700

640

690

644628

614

582

House Value 200,000

200,000

Municipality Impact

• Municipality percentage of property tax levy (Portion of the annual recurring $650,000 referendum)• Delavan Township – 4.2% ($27,300)• Fontana Village – 46.5% ($302,250)• Linn Township – 28.0% ($182,000)• Sharon Village/Township – 5.2% ($33,800)• Walworth Village/Township – 16.1% ($104,650)

• The large number of non-Wisconsin resident, high valued properties in Fontana and Linn means the tax levied from these properties will fund a significant portion of the referendum• Estimated percentage of non-resident property values• Fontana – 67% x $302,250 (or $201,500 of the $650, 000)• Linn (J6) – 67% x $182,000 (or $121,333 of the $650,000)

• Therefore, an estimated 50% of the annual recurring referendum tax levy requested by BFHS will be borne by the non-resident high valued properties ($322,833 of the proposed $650,000)

Referendum impact on BFHS Revenues

• Fund 10 General Education Operations Revenue• 2013/14 referendum revenue increase - $300,000• 2014/15 referendum revenue increase - $650,000 (and

beyond)

• 5 year budget revenue projections• Total 5 yr referendum revenue increase - $2,900,000• Total 5 yr projected per pupil revenue increase - $130,000• projected state per pupil increase of $50 per year

• Total 5 yr projected revenue increase - $3,030,000

What will the increased revenue be spent on?

• Estimated 5 year budget expense increases (use of funds)• $500,000 ($100,000/year increase)

• Funds for the maintenance and purchase of additional technology resources for the school• Funds for the upgrade of software licenses and maintenance of the technology budget• Technology budget spending was cut or deferred to meet budget cuts

• $350,000 ($70,000 x 5 years)• Funds for the hiring of and reconfiguration of at-risk services personnel for students

needing specific academic intervention in year 1• Hire to meet existing and future need

• $280,000 ($70,000 x 4 years)• Funds for the hiring of an additional teacher of Math in year 2• Hire to meet state requirement of additional math credit for graduation

• $210,000 ($70,000 x 3 years)• Funds for the hiring of an additional teacher of Science in year 3• Hire to meet state requirement of additional science credit for graduation

What will the increased revenue be spent on?

• Estimated 5 year budget expense increases (use of funds) continued• $160,000• Funds to redesign and configure the front entry way to the school - Safety

Entrance• Funds for meeting deferred maintenance requirements• Funds for maintenance and operation of the physical plant• Maintenance budget spending was cut or deferred to meet budget cuts

• $55,000• Funds to replace school vehicle that will serve the district for years in

transporting students and student groups• Capital expenditure was deferred to meet budget cuts

• $410,000• Proposed contribution to the General Fund Balance to increase percentage to

desirable level

What will the increased revenue be spent on?

• Estimated 5 year budget expense increases (use of funds) continued• $775,000 • Annual budget expense increase (Estimated 1.5% annual increase on

$7,000,000 budgeted expenses)

• $250,000• Funds for the purchase of textbooks, supplies, and other educational

necessities• Funds for the maintenance and enhancement of our career and technical

education classes and programs• Funds were deferred to meet budget cuts

• $40,000 • Funds for the replacement of 2 school copiers over a 3 year period• Capital expenditure was deferred to meet budget cuts

What’s Not Included

• There are no funds set aside for the development of athletic fields or a sport stadium

• There are no funds set aside for the development of additional sports or sport teams

• There are no funds set aside for the reconstruction or other major renovation to the auditorium

Key Points- Budget and Fiscal Picture

• I hear the Governor talk about increased funding to schools. How does that impact BFHS?• Because BFHS is a high property tax district (low state aid

district), BFHS will get virtually nothing in additional funds from state sources

• The latest budget forecast continues the freeze on levy limits for public schools

• What if the per pupil levy authority increases by more than 50 dollars?• BFHS will have additional monies available to maintain programs

and possibly head off going into fund balance in 2017/18

What is the district asking for?

• In a nutshell:• BFHS School Board is asking to tax for funds over the levy limit on a

recurring basis in the amount $300,000 in 2013-2014 and $650,000 in 2014-15 and beyond

• BFHS School Board is asking for these funds in order to maintain and enhance our educational programs and offerings for our students and community

• BFHS School Board is asking for these funds in order to provide each child who attends BFHS• an exemplary education• opportunities for academic growth in all curricular areas• the capability to be college and career ready

District Mission Statement

It is the mission of Big Foot High School to maximize each child’s learning and to develop productive, responsible citizens.