Gov. Scott Walker's proposed 2013-15 biennial budget has North Shore school districts problem solving in a variety of ways to address an equal variety of budget problems.
The controversial budget proposal includes an increase in state aid to public schools and an expansion of the voucher program which allows students to attend private schools in lieu of underperforming public schools. More importantly when it comes to local district budgeting, the governor has proposed freezing the revenue limit - which dictates how much districts can take in from the com bination of local taxes and state aid - over the next two years.
The prospect of flat revenue, paired with likely increases in basic operating expenses like transportation and electricity, means a number of North Shore districts are already looking at shortfalls as they begin to assemble their 2013-14 budgets. While some districts have more breathing room than others for various reasons, area district officials say a frozen revenue limit creates a zero-sum game in which any increase in operational costs - be it utilities, capital projects or salary increases for teachers - competes directly with the classroom.
"Is zero (increase to the revenue limit) a realistic or sustainable proposal? Of course not," Whitefish Bay District Business Manager Sean Yde said. "It's almost ridiculous in some ways, unless you're bent on destroying public education."
Preliminary budgets varied
Several North Shore districts are projecting shortfalls already as administrators and school boards begin to wade through the specifics of their preliminary 2013-14 budgets. Thus far Nicolet has identified a $300,000 gap and Shorewood is working to balance a nearly $520,000 deficit.
Shorewood is proposing roughly $760,000 in budget reductions in response, composed largely of a reorganization of support and custodial services, health insurance modifications, staff retirements and employee turnover. At the same time, administrators and board members are charting the course of core budget forces like state aid and salary numbers over the next five years to help prioritize expenses.
"It all depends on how well you plan and how well you can adapt," Shorewood School Board President Rob Reinhoffer said. "We've got a great community that supports public education, so there's no reason to believe the sky is falling here."
With a bit of budgeting acrobatics, Nicolet may be able to knock about $200,000 off the top of its budget shortfall by classifying several of its capital projects as energy-saving, which under recent legislation would allow the district to bypass the revenue limit freeze and raise taxes by an average of 1.5 percent over the next three years.
Meanwhile, the Maple Dale-Indian Hill and Brown Deer districts aren't yet resorting to budget reductions to balance their books.
Unlike many other districts around the state, Brown Deer levied less than the maximum allowed by the revenue limit in the 2012-13 school year, meaning a freeze would leave them with about $400,000 of breathing room to begin with, though the district has an automatic increase built in to its levy over the next eight years to fund its referendum-approved campus overhaul.
The new, less maintenance-prone and more energy-efficient consolidated Brown Deer campus, Business Manager Emily Koczela said, should save operating costs over the long term, which will help in light of the proposed levy freeze. By making health insurance plan modifications - one of the governor's Act 10 "tools" - the district may be able to fund employee raises as well.
New to Act 10's rules
In another unique scenario, teachers in the Maple Dale-Indian Hill district are still under a negotiated contract through June 30. In the coming year, Maple Dale-Indian Hill is poised to take advantage of the Act 10 tools to increase employee health insurance contributions, make employees pay for their own pensions, and begin plan modifications to curb the cost of insurance premiums.
Maple Dale-Indian Hill Business Manager Gary Swalve said that while the district is in a relatively good position due to the impending availability of the Act 10 tools, the district will be in the same situation as others next year, faced with the need for more cuts and already-reduced employee benefits.
"Once you do that, in the following year, then what do you do?" Swalve said. "It's difficult times for sure."
While the districts are doing what they can to streamline their budgets in the wake of Walker's proposal, school administrators and elected officials have been critical of the governor's move to expand voucher schools and the prospect of a frozen revenue limit.
Some administrators and school board members around the North Shore have suggested that the revenue limit should be tied to the consumer price index, pointing out that with a frozen revenue limit, inflation will continue to eat at their budgets from the bottom up year after year.
"Unless the revenue limit is tied to the CPI, you're always going to be cutting programs to make up for whatever the shortfall is," said Yde. "It would be unsustainable unless you use budget assumptions which prevent any increase in cost."
According to a preliminary budget report from the Shorewood district the revenue limit has increased by an average of .3 percent over the last 10 years while the Milwaukee-Racine CPI has increased by an average of 2.4 percent, creating a budget gap in each of those years.
In a recent letter to Walker and the state Joint Finance Committee, the members of the Nicolet School Board advocated for a CPI increase. Swalve agreed, but said there should be a limit in place to protect districts and the state from large swings in the CPI.
"(CPI would be) better than what it is now," Swalve said. "Now it's an arbitrary decision."
The state Legislature is expected to finalize the biennial budget in May for Walker's approval in June. In the meantime district officials will continue to plan based on frozen revenue, though they might wish otherwise.
"I sure hope reasonable people look at this," Yde said. "We try to manage as best we can within the parameters the state gives us, but that doesn't mean they're doing what's best for education."