School districts may initiate two types of referendums to increase funding - capital and operational. 

One type of referendum that a district may consider is a referendum to issue debt for a specified purpose. These are often referred to as “capital referendum,” because the funds are typically (but not always) for construction and other large capital projects.  A capital referendum provides the authority to issue a certain amount of bonds/notes to pay for a capital project. The District approved a capital referendum in 2018 for the Fox River building project.  

The second type of referendum a district may initiate is a referendum to exceed its revenue limit without issuing new debt. These are referred to as an “operating referendum.” An operating referendum provides additional revenue to pay for the operational expenses of the District, such as salaries/benefits, educational programming, routine maintenance, utilities, etc. This is the first operational referendum that the district has sought.

There are two types of operational referendums - recurring and non-recurring.  

A recurring referendum does not have an end date.  The additional funds are added to the base revenue each year in perpetuity. 

A non-recurring referendum, which is most commonly used by school districts,  provides additional revenue that has an established end date. Voters are asked to allow the District to exceed the revenue limit by a set dollar amount for a set number of years.  If additional years are needed, the District must ask for referendum approval.  In most cases, districts will continue to ask for subsequent referendum dollars.  

The District is seeking a non-recurring operational referendum that will expire at the end of the 2028-2029 school year.

367 school districts (87%) have asked an operational referendum question since 1990. Only 54 (13%) have not asked. Prior to the April 4, 2024 Operational Referendum question, the Waterford Graded School District was part of 15% of all school districts in the state that had never gone to an operational referendum. The fact of the matter is state funding has not kept up with inflation, and our expenses continue to rise across all areas of our budget.

A school district can only place a referendum question on a ballot after going through an official process. The referendum process starts when a school board adopts a resolution to exceed the limit. The permission to exceed the revenue limit can be for either recurring or nonrecurring purposes, i.e., can continue indefinitely or be only for a set period. 

The school district clerk must then submit the referendum to voters at the next primary or general election, as long as at least 70 days pass between the resolution’s adoption and the election. 

The Waterford School District has met these requirements and an operating referendum question will be included on the November 5, 2024 ballot.

Districts may not conduct referendums to exceed the revenue limit or issue debt more than twice per year. 

 Information from DPI

Voters will see the following question on the ballot on Tuesday, November 5, 2024: 

Question:  Shall the Waterford Graded School District Joint No. 1, Racine County, Wisconsin be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, by $3,000,000 per year for four years, beginning with the 2025-2026 school year and ending with the 2028-2029 school year, for non-recurring purposes consisting of operational and maintenance expenses?

In Wisconsin, every school district operates within a state-mandated revenue limit. This limit constrains the funding a district can receive from state aid and local property taxes. In recent years, rising inflation costs have surpassed revenue, a trend anticipated to persist for the next five years or more. Specifically, per-pupil funding has fallen behind inflation by approximately $2,200 per student since 2013. That results in 3 million in lost revenue for the current school year alone.

Wisconsin school districts faced two consecutive years with no increases in per-pupil funding from the state (2021-22 & 2022-23). Across the state, school districts are navigating escalating costs and the difficulties of retaining and recruiting educators, given the declining interest in the education sector.

Despite these challenges, our district's leaders and the Board have been prudent in maximizing the value of each taxpayer dollar, striving to meet our community's expectations for outstanding schools.  However, even with established short-term and long-term budgetary strategies, we anticipate a shortfall of more than $1.2 million next year and a cumulative deficit of $9.7 million over the next five years.

In essence, our current operating budget cannot propel our mission of inspiring, challenging, and supporting every child to thrive, explore their passions, and develop their potential, thereby paving the way for a future of limitless opportunities without the necessary support through a voter-approved operational referendum.

If approved, the referendum would provide the District with $3,000,000 each year for four years, beginning in the 2025-2026 school year. The referendum would expire at the end of the 2028-2029 school year.

In short, no. If the referendum doesn’t pass, the District will continue to prepay debt as we have the past several years.  With a focus on stewardship to taxpayers, we remain committed to being fiscally responsible and exploring opportunities that benefit our community and taxpayers in both the short and long term.

A common misconception is that fund balance is a cash account and therefore corresponds to the district's bank balance. In simple terms,  fund balance represents the fund's total assets minus its liabilities

It is crucial for school districts to maintain a fund balance adequate to sustain operational expenses, avoid short term borrowing and accumulate sufficient assets to make designated purchases or cover unforeseen expenditures. 

Many districts encounter cash flow shortages at various points in the year when they do not have enough cash reserves to support monthly expenses prior to receiving their aid or tax levy. Avoiding short term borrowing means we do not have to allocate precious resources to interest costs associated with debt and can use those funds to support students.

Continuing on this path of deficit spending and relying on the fund balance will inevitably lead to a negative balance eventually. This scenario would significantly hinder our ability to meet essential obligations, potentially impacting payroll, educational resources, and essential programs.

The estimated increase in the school district's portion of the mill rate of $0.25 would occur in the 2026 tax year, which would be $25.00 on a home with a fair market of $100,000 (a $300,000 home would be a $75.00 increase). Impacts for individual taxpayers are determined by the total value of property in the District and how it changes compared to the rest of the state.  

It is important to note that this will not be the yearly mill-rate increase for the next four years. Future mill rates will be determined by multiple factors, including the total value of property in the school district compared to the rest of the state, the state funding that is driven by this property value comparison, school district enrollment, levy amounts for debt service and community recreation, district spending compared to the rest of the state, state-approved changes to the per pupil revenue limit, and other factors, many of which are outside the District's control.

In recent years, the Board of Education and District Administration have worked diligently to balance the District’s excellent performance against constantly changing financial circumstances to meet the needs of all of our students.

In short, we have managed to do more with less by maintaining spending while expanding learning opportunities for students. However, it has become increasingly difficult to retain and attract high-quality staff and meet the needs of our learners, as school funding has not kept pace with rising costs. 

The Waterford Graded School District remains committed to explore opportunities to benefit the students, community and taxpayers. This process will need to continue even if the referendum passes.  Some examples include:

• Continuously review staffing and ensure alignment with student and programming needs.

• Annually review benefits and options to manage costs to the district and the employee while maximizing offerings in an effort to continue to attract and retain high quality educators and staff.

• Evaluate and review educational programming to improve efficiencies while maintaining a strong commitment to our students’ educational experience.

• Prepayment of debt for the capital referendum for Fox River thus saving the district over $1 million in interest to date. This will result in the debt being paid off two years ahead of schedule.

• Continue to utilize and explore other opportunities for state and federal grants.

• Review policies to ensure they allow for optimal utilization of financial resources.

The full list of referendums in the state of Wisconsin can be viewed on the Department of Public Instruction website.