The voters in the West Bend School District voiced a definitive “no” to the referendum question to raise taxes and borrow $47 million to build and renovate buildings. Now that the School Board has that answer, they must plan to meet the needs of the district within the taxpayers’ means.
Going into the election, the superintendent and School Board president said that there was not a “plan B” if the referendum did not pass. Such a statement is a gross admission of poor management. That kind of planning is like a guy running up his credit cards and neglecting his house because he plans to win the lottery. Well, the district did not win the referendum lottery. Now they need to manage the taxpayers’ finances responsibly.
When it comes to schools, everything is driven by one number: enrollment. It determines both the revenue and expense side of the equation. According to the most recent enrollment projections prepared for the West Bend School Board by the Applied Population Laboratory at UW-Madison, enrollment for the district will be declining substantially for the foreseeable future. Using four modeling techniques, they project that by the 2027-2028 school year, enrollment will decline between 11.6 percent and 20.3 percent across the district. That is between 772 and 1,345 fewer kids in the district in less than 10 years.
This decline in enrollment is not a reflection on the West Bend School District. It is a trend that is impacting government schools across the state due to the availability of more school options and a demographic shift of young adults having fewer kids. The decline in enrollment is neither good nor bad. It just is. And our government schools are responsible for providing a great education for the kids we have — not the kids they wish we had. This is the reality that the School Board must manage to.
On the revenue side, this means that the district can expect flat to declining revenue every year. Most of the district’s revenue comes from two sources. The property tax levy raises about $38.5 million. Due to revenue limits imposed 25 years ago, the school district is limited by how much they can raise property taxes every year. State taxpayers kick in about $30.7 million to the West Bend School District. Both the revenue limits and state aid are driven by enrollment. As enrollment declines, the School Board can expect less state aid and they will not be able to raise property taxes enough to compensate due to revenue limits.
The good news is that as revenue declines with enrollment, so do expenses. While it is difficult to reduce spending with a decline in enrollment of one child, a reduction in enrollment of 10 percent to 20 percent is a different story. All fixed costs become variable costs with time. Roughly 70 percent of the district’s expenses are for salaries and benefits for employees. The other 30 percent goes to everything else. It is reasonable to expect that the district should reduce the number of employees commensurate to the number of children being educated. Likewise, with 1.14 million square feet of buildings in the district, it is reasonable to expect that the district can reduce the number of buildings to match what the kids need.
What does this mean in real terms? It means that the West Bend School Board should plan on reducing the number of employees in a controlled manner. The easy way is to not backfill retirements and resignations, but if that is not enough, then separations based on the needs of the kids and the district must be done. It is not an attack on teachers to let them go when they are not needed. It is responsible planning to meet the needs of fewer kids.
Similarly, as the buildings in the district become less utilized, the School Board must consider plans to consolidate facilities. The school district has five elementary schools. Would four be enough if there are 20 percent fewer kids? Of course. This is always a contentious issue, but it does not have to be. The mission of the school district is to educate kids — not operate unnecessary buildings.
As the School Board manages a projected decline in enrollment, they should also work to eliminate unnecessary expenses by fully utilizing Act 10. For example, asking employees to pay the same percentage of their health insurance premiums that most taxpayers pay would free up hundreds of thousands of dollars every year. This budgetary liquidity would allow the district to pay great teachers more money by implementing the merit pay system that was abandoned last year.
The voters of the West Bend School District sent a very clear message to the School Board. The voters expect the School Board to work with the money they already have. Knowing that the district is facing a systemic decline in enrollment, the School Board must manage to that reality.
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