Pandemic relief aid key to PW-S school budget

The Port Washington-Saukville School District has a lot riding on federal pandemic relief aid that may be in jeopardy because of the state finance committee’s school spending plan.

The district expects to receive at least $1.2 million in Elementary and Secondary School Emergency Relief (ESSER) funds, but even with that aid it intends to use more than $400,000 in savings to balance the 2021-22 budget, according to a preliminary spending plan approved by the School Board Monday. 

“It all comes down to the ESSER funds,” Director of Business Services Mel Nettesheim said.

The Republican-controlled state finance committee’s two-year spending plan earmarks an additional $128 million for schools, less than 10% of what Gov. Tony Evers has proposed and far below the level of state funding required by federal laws to receive Covid-19 relief aid.

Democratic lawmakers have said the loss of $2.3 billion in federal relief aid for state school districts is a legitimate concern, but their Republican counterparts have downplayed the likelihood of the funding being withheld from Wisconsin. Rep. Mark Born and Sen. Howard Marklein, co-chairmen of the finance committee, have said the budget plan they ultimately deliver to Evers will preserve the relief aid, although they have not said how they will accomplish that.

Nettesheim said the aid is so critical to school districts throughout the state that are struggling to recover financially from the pandemic that she can’t foresee a scenario in which the state does not qualify for the funding.

“I think the state will do what needs to be done to get the money,” she said. “I know so many districts are relying on ESSER funds that it would be a really tough year if that money isn’t available.”

The absence of federal relief funds would leave a gaping hole in the Port-Saukville school budget and force officials to consider options that include tapping into fund balance for considerably more than the $410,917 that is currently planned and deferring a second round of technology upgrades planned for next school year, which include new digital screens to replace antiquated Smartboards in three of the district’s schools and the replacement of old Chromebooks for students, Nettesheim said. 

Even with the federal funding, school officials had to address several challenges in next year’s budget, including a 12% health insurance premium increase that will cost the district $540,000. The increase, which is due to claims this year, will be offset in part by a 3% increase in the share of the premium paid by employees. District employees who receive an hourly wage will pay 13% of their premium and salaried employees will pay 16%.

Student enrollment is also a significant budget factor. After a decrease of more than 100 students attributed to the pandemic last year, the district expects to have an increase of 81 students in fall. 

Increasing enrollment is generally beneficial because it results in more state aid, but in some cases it comes with short-term financial hardship. The Port-Saukville School District received a declining enrollment exemption worth $400,000 under its revenue limit this school year, but it’s a one-time bump intended to protect districts against the financial implications of declining enrollments, and next school year the district won’t receive it. At the same time, enrollment for the purposes of state aid is calculated on a three-year average, so it takes years for districts to fully benefit financially from increasing enrollment.

Wisconsin public schools experienced an average 3% decrease in enrollment from September 2019 to September 2020, according to the Wisconsin Department of Public Instruction, and while enrollments have been declining since the late 1990s due to demographics, officials say the pandemic has exacerbated that trend. In particular, some parents of students who are of kindergarten or pre-kindergarten age elected not to send their children to school during the health crisis. 

The Port Washington-Saukville School District budget also calls for a $62,400 increase in its community service fund primarily to help pay the salary of the school resource officer. The salary and benefits of that officer, who splits his time between city and school duties, is currently paid by the city. The school district will now pay 60% of his salary during the school year, Nettesheim said.

For all the challenges in the budget, the impact on taxpayers promises to be relatively minor. The tax levy is expected to increase by $225,225, or 1.3%, and the tax rate to increase by 3 cents to $8.99 per $1,000 of valuation. Assuming a 1% increase in property values, the owner of a home worth $200,000 would pay an additional $24 in local school taxes.

Going forward, Nettesheim said, student enrollment and state school funding will be  critical.

“We’re definitely going to have some significant challenges if we don’t see enrollment numbers continue to climb or if the state doesn’t provide more funding for schools,” she said.