State Aid Up 31 Percent for Shorewood Schools Due to Assessor's Error

will see one of the largest state aid percent increases among public school districts in Wisconsin next year — a whopping 31 percent — due to late last summer.

The district will receive an estimated $1,128,518 in additional state aid next year — $4,759,539 compared to $3,631,021 this year — according to state Department of Public Instruction data. That's the third-highest increase statewide, behind Twin Lakes No. 4 and the Stone Bank School Districts.

By comparison, the Whitefish Bay School District expects a 2.16 percent state aid increase and Fox Point-Bayside schools a .83 percent decrease next year.

DPI’s data is only preliminary and actual aid figures will not be known until October after final enrollment and other information is calculated.

It's ironic that the very same  had village officials scrambling to avoid a $2 million artificial increase in their property tax levy. To avoid that spike, , borrowed cash to fund the difference, and then will raise the levy the next year by the same amount.

Where the error came from

occurred when Associated Appraisal Consultants Inc., the village's assessor, recorded the value of Shorewood’s Tax Incremental Financing District No. 1 — which blankets much of the business district — as $77 million instead of $77,000. It then sent that figure to the state Department of Revenue, which then published that incorrect value.

Department of Revenue officials said state law prohibited them from changing the inflated value after it had been published. And as a result, the total equalized value of property in Shorewood was artificially inflated and village property owners could have had to fork over $2 million more on their tax bills.

State education officials use the value of the village, excluding the special taxing district, when calculating aid each district receives. And while the total value of Shorewood is overstated because of the error, the value excluding the special taxing district is actually understated, resulting in the increase of state funds, said District Business Manager Mark Boehlke said.

And this gift will keep on giving. Even when the assessment is corrected, there is a 15 percent cap on state aid decreases in any given year, Boehlke said.

"It will take a few years for the district to even out to where it would otherwise be," he said.

Boehlke said , state officials would likely find a way to fix the funding glitch, but when contacted after the funding estimates were released, the state said it would go with the current numbers.

How to use the extra cash

The increase in state aid typically means a decrease in the tax levy and the district's portion of resident's property tax bill, but Boehlke said the district is talking with its financial advisors about using some of the extra cash for a energy conservation project in the district.

The Shorewood School Board has yet to approve a 2012-13 preliminary budget. The board that allowed the district to move forward with hiring of new staff. School officials recently hired .

Shorewood expects to save nearly $475,000 in this budget cycle due to the , while it is still vetting additions like a at a cost of $75,000, and a computer technician at $70,000.

The DPI estimates are derived from two areas: the and the relevant school district data from the 2011-12 school year. These include membership, shared costs and property value, according to a press release from the DPI.