Question:

Shall the Iowa-Grant School District, Grant and Iowa Counties, Wisconsin, be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, regularly by $1,200,000 beginning in the 2024-2025 school year to sustain educational programming, operations, and facility maintenance?

How did we get to this point? 

Superintendent Michael Shimshak addresses frequently asked questions

• Costs of operations exceed what the state allows: As I have quoted Billy Joel before, “We didn’t start the fire…” Beginning in 1994, the State of Wisconsin has imposed revenue limits, which are in effect, spending limits on public schools. These limits had been indexed to inflation until 2009. Since then, while school costs continued to rise, the revenue limits have not increased accordingly. In fact, for six of the past ten years (2015-16 to 2024-25), school districts received no allowable increase, even as wages, utilities, and other operational costs went up. To make ends meet, school districts have had to cut expenditures, spend down reserves, and or ask voters for more revenue authority through referendums. Iowa-Grant has done all of these things (see below).

• You can’t eat your seed corn: Spending down reserves is unsustainable. Eventually, there is no more money in the bank. A district needs to have reserves because revenues come into the district periodically throughout the year and not every month the way expenditures do. When districts have an inadequate fund balance, they must borrow money to manage cash flow. The cost of borrowing money just adds to the deficit for the following year.

What will the money be used for? First, while the board is looking long-term at improving facilities, the money will not be used for new facilities. Instead, the increase in revenue authority is needed to meet basic needs and to maintain existing programs. The kinds of expenditures we need to cover include wages, utilities, transportation, insurance, our food service program, special education costs, and the co-curricular programs we offer. Deferred maintenance and mechanical systems that are beyond their lifecycle create a financial liability for the district. By deferring maintenance, one can end up paying more in the long run.

We have more than fifteen air conditioning units at IGEMS that are well beyond their life cycle with an estimated cost of $30,000 per unit. Additionally, one larger condenser unit at IGEMS could cost up to $50,000 to replace if it fails. We must replenish capacity in our capital budget to handle these kinds of expenditures after completing a major electrical upgrade to the high school and funding some other large capital projects, like a school van and building exterior maintenance through this fund. (Updated 8/26/2024)

How was the amount determined? In addition to our internal analysis, we’ve consulted with Baird Financials and used their proprietary software in forecasting our expenditures and revenues for the next five years. The Baird model predicts compounding deficits based upon declining enrollment projections and even in consideration of further staff reductions. 

How much will my taxes go up? Even though the referendum question asks for authority to levy 1.2 million dollars, the Board of Education took action at its August meeting to phase the increase in over time to lessen the tax burden on district residents. The board committed to levy no more than $400,000 of any new revenue authority gained through a successful November referendum in 2024-25. As a result of the board’s action, the estimated impact is expected to be an increase of  $266 on a $200,000 property, or less than $24 dollars per month.  The district intends to start with a lower levy and take advantage of the state aid formula to even out the tax impact over time. This is the same strategy the board used in 2016. (Updated: 8/26/2024)

What have we already done to manage expenditures? We've worked hard to live within our means. Employee benefits and wages have been less than the inflationary index. Continuing to do this will make it more difficult to attract qualified staff during a time of state-wide teacher shortages. We have been reducing staff through attrition whenever possible. So far this has meant reducing a math position at the high school, four classroom teachers at the elementary middle school, and one teacher’s aide position in the pre-kindergarten. Some of these reductions have been manageable because of declining enrollment, but now we are at a point where further reductions will cut into program quality, for example, larger class sizes and fewer offerings at the high school. Finally, we have deferred maintenance. This is not a savings for the district because eventually the maintenance must be done. We have used about half of the capital projects rainy-day fund to upgrade the electrical system at the high school, the well house which serves both buildings, and some exterior repairs at both buildings. Our buildings are more than sixty years old (high school) and thirty years old (IGEMS) so deferring maintenance catches up with you.

What will happen if the referendum does not pass? If the referendum were to fail, I will be recommending the board of education immediately schedule another ballot question as soon as legally possible, with an intensified informational campaign so that the residents might have one last opportunity to save the school district. The district urgently needs the increased revenue to stay viable as a school district. 

Our forecast models predict that the fund balance will be depleted completely within two years. In the interim, program reductions could include everything from co-curricular activities to further staff reductions and lay-offs, eliminating the school lunch community eligibility option, and ultimately considering the option of dissolving the school district.

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