The recently-approved Wauwatosa School District budget for 2016-17 contains a spending increase of 2 percent over last school year, an increase the school board said is due mainly to a loss of nearly 15 percent of state aid.
To adjust for the hole left by the decrease in state aid, the new spending plan increases the tax levy by 5.5 percent, from $45.2 million to $47.6 million.
With the approved levy, taxes on a home with an assessed value of $220,000 will be about $1,631 in 2017 compared to $1,565 in 2016; an increase of $66.
The school board gave final approval to the budget Oct. 24.
State aid decreases
Director of business services for the district John Mack told school board members the current need for an increased tax levy has nothing to do with the school district’s spending, which has remained even, and everything to do with the complicated state aid formula.
“We’re controlled by the revenue cap, so if the spending doesn’t go up, the levy shouldn’t either, but this happened in about 20 other districts in the state,” Mack said. “If equalized value had stayed the same, we would have received almost $800,000 more in equalization aid.”
The Wauwatosa School District received nearly $17 million in state aid for the 2015-16 school year and will receive $14.4 million for the current school year, a decrease of 14.8 percent. Out of 424 districts in the state that receive funding, only 13 of them received a bigger decrease in state funding than Wauwatosa.
Overall, 60 percent of the state’s 255 public school districts will receive more general state aid this school year than they did in 2015-16. General aid is made up of equalization aid, also known as the school aid formula, integration aid, also known as Chapter 220 aid, and special adjustment aid, also known as hold harmless aid. Sixty-one districts had a 15 percent reduction in their aid from the prior year because they fell into the 85 percent hold harmless provision.
About $2.5 million of the state aid lost is the result of the city of Wauwatosa releasing a large Tax Increment Financing (TIF) onto the Wauwatosa tax rolls from the 2015-16 school district budget. A small drop in enrollment was also a minor factor in the funding decrease.
TIF is a municipal development tool originally designed to help cities redevelop areas that were blighted, in need of rehabilitation or conservation work, or suitable for industrial development. Over the years laws governing TIF have changed resulting in a current law that is more expansive than the original.
Wisconsin’s TIF law permits cities and villages to divert property taxes from their typical uses to subsidizing private development in a specific area. To attract private investment the local government borrows money to make improvements (streets, sewers, etc.) in a certain area or to provide grants to the developer. Property taxes generated from new or refurbished buildings within the designated area are used to repay the debt. The greater the private investment and property value growth in the TIF district, the faster the borrowing is repaid.
Successful tax incremental financing requires private development to generate tax revenues to fund public investment. Sometimes that investment does not materialize and local taxpayers foot the bill. In 2009, lawmakers allowed cities and villages to identify TIF districts, created before October 2008, that were unable to meet their financial obligations.
Salaries and benefits make up a majority of the budget at just over 72 percent.
Salaries for all teachers increased about 0.4 percent while the amount allocated to retained teachers' salaries went up nearly 2 percent, which Mack said is due to the district’s efforts to retain highly effective teachers and staff.
“We’re trying our hardest to reward people who are committed to Wauwatosa,” Mack said.
Salaries for all of the staff in the district show an increase of a little more than half a percent.
The amount spent on benefits overall is up 4.2 percent compared to the 2015-16 budget, largely due to an increase in the cost of both health and dental insurance provided to employees.
An additional $800,000 is included in the budget under “non-capital objects” which is allocated to fund classroom renovations of all math rooms at the secondary level.