Renew, retain and reinvest.
That's one way to describe South Washington County Schools' pitch for its three-question referendum on the election ballot Tuesday, Nov. 7. Voters will decide whether to renew District 833's largest operating levy, increase local property tax revenue to protect school programming, and spend more on classroom technology.
The referendum outcome has significant budget and program implications, district administrators say. Approval would allow the district to continue offering current programs, build up depleted budget reserves and upgrade aging or near-obsolete learning devices.
Failure on the levy renewal alone could mean $15 million in spending cuts, and a rejected capital levy will delay some technology improvements and prompt the district to fund others with the same revenue source that pays for teachers and classroom operations.
Question 1 seeks renewal of an existing property tax levy that generates roughly $15 million for operating expenses, or about $780 per pupil. The levy has been on the books for 20 years. It was renewed once, a decade ago. Approval of Question 1 would not increase property taxes, though they would decrease if it fails.
"It's really been part of our general funding mechanism," Superintendent Keith Jacobus said of operating levies, adding that nearly all school districts across the state also rely on local property tax levies to help pay for basic education costs.
"Asking your voters for support through levies is no longer about add-ons or extras," Jacobus said, "it's about just the basic way schools are funded."
A failed levy renewal on Question 1 would leave a $15 million shortfall next year, district finance director Dan Pyan said. Class sizes likely would grow as staff positions are cut, and the district would have to look at busing and program spending reductions.
"It would be a major reduction and we'd have to examine every aspect about what we do with students and how we function as a school district," Jacobus said.
Two years ago the district sought a $525-per-pupil levy increase, and vowed to return in 2017 to seek the remaining $375 per student. The district's goal is to obtain a total $900-per-pupil levy hike that administrators said is needed to maintain current programming and shore up reserves. That first part passed 56-44 percent in 2015. District voters have not rejected a levy measure since 1996.
If the $375-per-pupil Question 2 fails, the district could be looking at $4 million in spending cuts in each of the next two years, Jacobus said.
The district has a roughly $220 million operating budget, of which about $123 million comes from state aid determined by enrollment.
The Legislature and Gov. Mark Dayton earlier this year approved school aid increases of 2 percent this year and next year. Local lawmakers have touted the school funding boost since it passed in May. Meanwhile, school leaders say while they appreciate the increase, it followed years of stagnant state funding and only applies to the state portion of the district operating revenue. And at the same time, the district is seeing a 2.1 percent inflationary increase to its overall expenses, Pyan said.
If voters approve both Questions 1 and 2, the district's reserve funds would climb from $7 million to about $11 million in 2018-19 and $16 million in 2019-20. That would put the reserves at the lower end of the school board's policy of maintaining rainy day funds of between 5 percent and 9 percent of operating expenses. That could result in an improved bond rating, which fell two spots after reserves were tapped as an alternative to spending cuts.
Voters also will decide whether to increase property taxes to provide $2 million a year for a decade for a capital levy. A previous $1 million-per-year levy for technology expired a year ago. The district has some 14,000 electronic devices in classrooms — from iPads and Chromebooks used for personalized learning and testing to digital projectors for classroom instruction — that reach the end of their usable life and must be replaced. In some cases, the devices will not be supported by the manufacturer any longer, said Bob Berkowitz, the district's technology director. The new funding would pay to replace or update devices and for educational software requested by teachers for classroom use. Certain computer programs are needed in class, particularly in high school, Berkowitz said.
"We need to be looking at what are the software packages that kids need to use," he said.
The levy renewal in Question 1 would not increase property taxes, though its rejection would lower them. However, district leaders have said a successful renewal would still result in a small property tax reduction — a $12 annual decrease on a $250,000 home, for instance — because the tax base has grown.
Passage of Questions 2 and 3 would increase property taxes. If both levy increases are approved, it would result in a $219 increase per year to the school portion of property taxes on a $250,000 home, according to district estimates. Commercial property valued at $1 million would see a property tax increase of $937 if both levy increases are approved.
A tax estimate calculator is on the district's website at sowashco.org, along with other referendum information.
The levy increase that was approved in November 2015 followed a more lively and contentious election season, where levy proponents' message was countered by a vocal "vote no" campaign. No similar effort has appeared this fall.
This quieter campaign season could be because the district's plan was known two years ago, when it sought the first part of the levy increase and said it'd request the remaining increase in 2017, said Shelly Schafer, District 833's communications director.
"It wasn't anything new that people weren't anticipating," Schafer said.
The district's voter outreach effort has includes more than 100 meetings, including with district staff, school PTO members, Rotary clubs and other groups. The district also rolled out a multi-week referendum information campaign.
"We certainly have been engaging folks," Schafer said.
The referendum is not the only reason to head to the polls. Voters also will fill four school board seats for four-year terms as well as fill a two-year term for a seat left vacant with former board member Joe Slavin's death in June.
Polls are open 7 a.m. to 8 p.m. Tuesday, Nov. 7 and absentee voting is available. For a complete list of polling locations and other election information, go to www.sowashco.org.