$30M budget passed by Shawano School Board

Higher property values allow for early debt repayment
By: 
Lee Pulaski
City Editor

With little commentary, the Shawano School Board approved a budget just under $30 million Monday for the 2019-20 school year.

Taxpayers can expect to see a slight drop in their district property taxes as the budget includes an 11-cent cut in the tax rate to $9.58, which means someone with property worth $100,000 would pay $958 in school district taxes.

The tax rate could have been as low as $8.88, due to a much higher bump in the property valuations — 5 percent instead of 2 percent — but the board voted to pay off $1 million more off its debt early, specifically the debt incurred when the district built Hillcrest Primary School and renovated Olga Brener Intermediate School. According to business manager Louise Fischer, doing this will help to keep the tax rate steady and allow the debt to be completely paid off one year earlier.

There is currently about $21.9 million in debt for the district, including the renovations at Shawano Community Middle School, which officials expect will be paid off by 2031. Getting ahead on the debt would allow the district to pay off its existing debt by 2030.

“The purpose of this is to pay off our debt sooner, save money on loan interest costs, and also our money would be invested in the meantime, so we’d be making money off of it,” Fischer said, noting that some research into current interest rates show the district could save anywhere from $50,000 to $65,000 on interest costs by paying off more debt now.

Fischer told the board that this was a good time to get ahead on the debt, due to higher property values and a state budget that provided more funding to schools. She said there’s a possibility to do something similar in 2021 if property values continue to rise, which would really help when the bonds are eligible for refinancing in 2023 (Hillcrest and Olga Brener) and 2024 (SCMS).

The 2019 third Friday count in September, the official number the Wisconsin Department of Public Instruction uses to determine how much aid it furnishes to schools, showed a 51-student decline, more than double the number Fischer had estimated when she presented the budget in community meetings and the annual meeting in September. That brings the official enrollment of the district to 2,279.

Fischer said the latest decline shows the district’s three-year rolling average, which the state uses to determine how much equalization aid districts get, will be 40 students less when it comes time for next year’s budget. She said that this year’s equalization aid for Shawano was up $359,000 to about $15.3 million compared with what the district received in the 2018-19 school year.

If the school district moves forward with a proposed referendum for a new recreation center in April 2020, and voters approve it, that increase on the tax rate would take place in 2021.

Fischer reported the district will be paying more money toward private school vouchers in the area than she originally presented. She said the district would be paying $876,000 toward the vouchers, not $728,000 like she had presented in September because one of the schools is offering special education.

Fischer noted that $857,000 of that expense is going to the three parochial schools in Shawano — Sacred Heart Catholic School, St. James Lutheran School and Wolf River Lutheran High School. The remainder is going toward private schools outside the district that are educating students living in the Shawano area.

“When I pressed DPI (Department of Public Instruction), they didn’t give it. They don’t have to give it,” Fischer said. “They just tell us to tax it and levy it on everyone. It’s really frustrating.”

Of the $6.43 in the tax rate that goes toward school operations, vouchers account for 62 cents of that, almost 10 percent, according to Fischer.

Fischer noted that the district is also getting a one-time payment of $326,000 due to the city of Shawano closing two Tax Increment Finance districts. The money is going into one of the district’s accounts that handles capital improvement projects, which brings the total in the fund to almost $1 million.

The district is also getting $131,000 more from the open enrollment program, where families are allowed to enroll their children in schools not in the district they live in. Fischer said the district is expecting to get $362,000 because of the number of students coming into Shawano School District exceeding the number leaving for other schools.

While the funding is welcome, it’s not always reliable, according to Fischer.

“I’m concerned about the up and down of open enrollment,” Fischer said. “There’s no way to really predict it. This is a figure that really helps our budget because we have a net and not an expense, but it would be nice if we could get some stabilization or develop a trend where it goes up every year.”

lpulaski@newmedia-wi.com