School Referendum Could Add $196 to Next Year's Tax Bill

Higher taxes or larger class sizes?

That appears to be the choice that will be presented to Shorewood residents in April as school officials moved forward Monday with planning for two possible referendum questions aimed at addressing the district's financial crunch.

The Referendum Advisory Committee came up with some specifics on the two questions: whether to refinance the district's debt to the Wisconsin Retirement System and whether to borrow millions to fund non-pension retirement benefits for employees.

“There is a clear choice here: raise taxes or cut the quality of your education,” committee member Sean Cummings said.

Tax hikes for quality education

Even without a referendum, the district's property tax rate next year is expected to rise by 74 cents per $1,000 of assessed value - or $128 for a resident with a $200,000 home.

But approval of the two referendums would add between $138 to $196 to that tax bill, depending on how much the district would borrow to fund non-pension retirement benefits.

The committee is still discussing whether to borrow $8 million, $10 million or $13 million. Borrowing $8 million would add $138 to the tax bill of a property assessed at $200,000; $10 million would add $160; and $13 million would add $196.

The referendum is part of comprehensive plan that aims to make the district financially stable by 2016. The district is facing a $700,000 deficit next year and that is projected to grow to $872,000 if no action is taken.

School Board President Paul Zovic said Shorewood could look forward to increase class sizes if the referendums weren’t passed.

“We had already cut $7.5 million… and we’re not going to cut $700,000 by changing light bulbs, it would be increased class sizes,” Zovic said. “It’s going from a class size of 20 to a class size of 28 — that’s a big difference and we don’t want to go there."

Zovic added, however, that the district's liberal arts curriculum wouldn’t be touched.

“We won’t advocate for the cutting classes like Spanish or orchestra," he said. "That’s what makes Shorewood Shorewood."

Addressing an unsustainable system

The referendum options would serve as a short-term solution to the district's budget gap and are part of a long-term plan that includes increasing resident enrollment, fundraising and setting up an endowment.

Refinancing the debt to the retirement system would free up $245,000 annually, and borrowing $13 million to fund retirement benefits provide the district with $450,000, money that could be used toward more funding for the classroom.

“Everyone knows the current system is unsustainable," Cummings said. "We can’t hope to reverse, but we can hope to break even.”

The School Board must decide by Feb. 18 whether to put the referendum on the April ballot.

The committee is filled with members of  ad-hoc villagewide financial strategy committee, parents from each Shorewood school and other residents. A set in motion the creation of the committee and will determine what groups they need to communicate with and educate on the referendum when they meet again next Monday.

The committee will also look at only putting one question on the ballot instead of two.