Salary-focused budget will require district to tap savings

PW-S spending plan aims to attract, retain teachers, address challenges during new era of inflation
Ozaukee Press staff

The Port Washington-Saukville School District’s proposed 2022-23 budget accomplishes the district’s goal of increasing pay to attract and retain top educators and manages to deal with challenges like inflation, rising health insurance costs and an exodus of students through open enrollment, but it promises to do so at a cost to its savings.

The School Board, which historically has been reticent to dip deeply into reserve funds, approved a spending plan that relies on $602,182 from fund balance.

“Right now, the budget is set to have a deficit” without the contribution from fund balance, Director of Business Services Mel Nettesheim said.

The budget also relies on about $1.5 million in federal pandemic relief money, the balance of the $2.5 million in Elementary and Secondary School Emergency Relief funding the district will receive. That is money the district will not receive next year, Nettesheim warned.

“The ESSER money will go away next year, and what to do when that funding runs out is a question for every school district right now,” she said.

At the heart of the proposed budget are salaries and benefits, which constitute 74% of the district’s operating expenses and are a growing priority for districts throughout the state that are competing for a shrinking pool of educators.

“Our budget is built on salaries and benefits,” Nettesheim said.

The Port-Saukville School District budget calls for an average salary increase for teachers of as much as 4.5%, more than the 3.8% average teacher salary increase in Southeastern Wisconsin.

An analysis of teacher pay shows the top of the district’s pay scale is $9,168 higher than the average top salary in other districts in the North Shore, although the district’s starting salary is $60 below the average, according to Nettesheim.

“It’s awesome to have this (higher top end of the pay scale) in the North Shore because it can definitely help us recruit top candidates,” she said. “But the starting salary is definitely an area of improvement for us.”

The budget also assumes a more than 6% pay increase for educational assistants — the new term for paraprofessionals — and a maximum increase for administrators of 3%.

The raises come at a time when the district faces a number of financial challenges, including a $350,000 — 8% — increase in the cost of health insurance. The district’s premium is increasing 12%, but the financial impact to the budget is being softened by an increase in the contribution employees make to the premium.

And while enrollment is projected to remain steady or decrease slightly, it is in effect decreasing rather significantly because the district has lost 20 students to open enrollment, the state program that allows students to attend the public school district of their choice. Under that program, the district effectively loses state aid for its students who attend school elsewhere, which is estimated to cost it $138,859 next school year.

That concerns school officials, who say they will make it a priority to find out why students are leaving the district. The answer, they suspect, may have something to do with the pandemic, which prompted some parents to homeschool their children or enroll them in virtual schools, or in some cases send them to districts that had Covid-19 protocols they agreed with.

“We may be seeing the residual effects of Covid,” Nettesheim said. “Did they leave the district because of Covid and not come back because it would mean another difficult move?

“Either way, we have to learn why students are leaving the district.”

Special education costs are also increasing, as they are in many other districts, and under a state funding system in which local districts pay the majority of those costs, they can have significant impact on budgets.

“We have roughly spent $6 million a year on special education, and $4.1 million of that comes from the district,” Nettesheim said.

Another challenge facing the Port-Saukville School district, as well as public school systems throughout the state, is the increasing number of children who are eligible for and use Wisconsin’s voucher programs to pay for private school tuition.

When students participate in Private School Choice Programs, their resident public school districts lose state aid.

State levy limit rules allow districts to increase their tax levies by amounts equal to the lost aid, which means school vouchers have a neutral impact on budgets. They do, however, increase the cost of education born by taxpayers.

The district’s Private School Choice levy will increase by $300,000 next school year to a total of $700,000.

All of this is occurring against the backdrop of inflation that is increasing the cost of materials and services the district buys while putting pressure on it to pay its employees more and keep in check taxes paid by residents who are also feeling the economic pinch.

The proposed budget calls for a property tax levy increase of $314,574 — 1.8% — and, because of an expected increase in equalized property value, a negligible increase in tax bills. The actual impact to taxpayers, however, won’t be known until the district has key figures such as property values and enrollment and the board approves the final budget and tax levy in October.

The district is, of course, also thinking ahead to future school years, particularly with a 2022-23 budget that relies on $1.5 million in ESSER funds it won’t have and a significant contribution from fund balance it doesn’t want to make a habit of tapping.

Nettesheim noted that the district was careful not to spend relief funding on recurring costs and will now make a concerted effort as part of its strategic plan to “right-size” the budget by prioritizing funding for its most effective programs and decreasing spending on less important initiatives.

She, like school officials throughout the state, also hopes the Legislature will increase state funding for public schools in the next biennial budget after two years of flat per-pupil aid in recognition of the fact districts are grappling with the end of ESSER funding and rising costs.

“Our hope, and we’re not alone, is that the Legislature will address this sooner rather than later, especially with inflation,” Nettesheim said.


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Ozaukee Press

Wisconsin’s largest paid circulation community weekly newspaper. Serving Port Washington, Saukville, Grafton, Fredonia, Belgium, as well as Ozaukee County government. Locally owned and printed in Port Washington, Wisconsin.

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Port Washington, WI 53074
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