A lot at stake in third school funding vote

Northern Ozaukee School District officials are hoping the third time’s the charm for a referendum asking residents to approve increasing the tax levy to cover operational expenses.

“We certainly hope it will be,” School Supt. Dave Karrels said. “I think we’re optimistic. We have tried to do everything we possibly can to make sure people have the information they need when they go to the polls.

“This is really vitally important for the operation of our schools. What kind of schools do we want?”

The School District is asking voters on Tuesday to increase the school levy by $1.1 million annually for four years, an amount officials say is needed to ensure the district can continue to provide a quality education.

Voters turned down referendums to increase the operating levy twice in the last 18 months — the last time by only 107 votes — but in an effort to make the question more palatable to residents the School Board voted earlier this year to reduce the amount they are asking from residents.

Officials trimmed the amount they are seeking from $1.7 million to $1.1 million, and to do that the School Board removed plans to update the track and maintenance shed from the question.

The board also factored in the impact an increase in enrollment will have on state aid.

The referendum will impact the tax levy, but not the tax rate, officials said. That’s because if the referendum is approved, officials will reduce the amount of money they are using to pay down the district’s existing debt and use those funds to keep the tax rate stable.

The referendum funds are sorely needed, Karrels said, especially since the district is seeing an enrollment increase.

“With growing enrollment we’re seeing growing class sizes that need to be addressed,” he said, noting the second, fourth and seventh grade classes are “quite large.”

“There’s no way it can be done with our current budget,” he said.

The School Board recently approved two budgets for the year, one that will be used if the referendum passes and the other in case it does not pass.

The difference between the two is that if the referendum isn’t approved, the district will have to dip into its fund balance — a savings account of sorts traditionally used for cash flow purposes — to offset an $800,000 deficit it will experience.

The Department of Public Instruction recommends districts keep their fund balance at 15% to 20% of the operating  budget, something the district has worked hard to achieve, Karrels said.

Spending the fund balance to finance operations is “not sustainable,” Karrels said, and it’s something that will quickly “snowball.” If the district doesn’t have the money needed to pay its bills until tax revenues and state aid arrive, it will have to borrow money to make ends meet. And that means it will have to pay interest on that money, costing taxpayers more in the long term.

It won’t take long before the district will have to take steps to balance the budget, including freezing wages and cutting staff, Karrels said.

And that, he said, will likely mean losing high quality staff members, and that in turn could lead families to choose to send their children to other districts, exacerbating the district’s issues.

“It takes a long time to build what we have here, a high quality district with a good reputation, and it can disappear quickly,” Karrels said.

“No matter what, our teaching staff and our support staff just keep working. But you know those types of things could change quickly. There are jobs everywhere.”

Karrels said the School Board demonstrated its commitment to keeping the tax rate steady by approving a 2024-25 budget that, no matter the outcome of the referendum, has a tax rate of $7.96 per $1,000 of equalized property value, a decrease from last year’s rate of $8.35 per $1,000.

“I think that was a strong way for the board to say if the referendum would pass ... they have demonstrated their commitment to follow through on their commitment,” he said.

Karrels acknowledged that this may be a tough time to pass a referendum, especially since voters in the Village of Fredonia are also being asked to approve a tax levy increase to fund emergency medical services.

“That is an important service for the community as well,” he said. “But what makes up a great community? It’s government, it’s emergency services, but it’s a strong, quality school system too.”

Northern Ozaukee is not the only school district seeking to increase its levy to pay for operational expenses this fall. The Mequon-Thiensville School District is asking voters to approve increasing the levy by $5.5 million for the 2024-25 year, $6.2 million for the 2025-26 year, $6.9 million for the 2026-27 year and $7.8 million for the 2027-28 year.