Appleton school district is budgeting for a shortfall, but says it won't become common practice

APPLETON - The Appleton Area School District is approving a shortfall in its budget this year, but district officials are calling it a “strategic” choice.

This year’s revenues are projected to be about $3.2 million less than what the district plans to spend, said Holly Burr, executive director of finance, at a public hearing Monday night.

Multiple factors play into the shortfall including an overall decrease in the revenue limit, which dictates how much it can get from a combination of state funds and property taxes, and inflation driving up the cost of contracted services such as cleaning and transportation.

This year’s budget was presented under the assumption voters on Nov. 8 approve two referendum questions, which ask for $130 million for a new elementary school, moving sixth graders to the middle school and additions at three high schools.

Last year, the district ended with an $8 million surplus and has excess in its general fund, which makes up about 80% of the budget, to offset that over-spending.

The district has intentionally built up its fund balance over recent years to improve its financial standing and prevent the need for short-term borrowing, Burr explained at a board work session last week. But she also explained that a “healthy” fund balance is about 25% of expenditures. The district’s fund balance is closer to 30%, so it has the means to make up for that shortfall.

“This is a strategic, planned and fiscal way to maintain a healthy fund balance while not impacting programs at the school,” Burr said at the public hearing.

This budget prevents the district from not having to cut any programs, but it isn’t a practice the district usually does or plans to continue to do, Board President Kay Eggert added during the public hearing.

“This is not a precedent for going forward,” she said.

This time last year, district officials said they were concerned about the 2022-23 budget. Federal stimulus money and pandemic-induced savings helped cushion last year, but concerns existed about enrollment trending downward, the state not increasing the district’s revenue limit and inflation.

The district has continued to see pandemic-induced savings, although in less obvious ways. At a work session with the school board last week, Burr said field trips still aren’t at pre-pandemic levels and staff aren’t traveling out of district as much for professional development.

The district is expecting increases in operational costs this year because of inflation. Costs for contracted services such as cleaning and transportation usually go up each year, but the numbers this year “scare” the district, said Superintendent Greg Hartjes.

“That is where our challenge is,” he said.

More:There are few female high school principals in Wisconsin. Appleton just got its first.

How much is the district spending?

AASD’s budget for the 2022-23 school year totals $243.9 million, an increase of about $12 million from last year.

Almost 60% of the money will come from the state, another 30% from local property taxes and 6% from the federal government through grants, reimbursements and the remaining COVID-19 stimulus money.

That's a jump from last year's unaudited budget of $230 million.

Just over 60% of this year's budget will be spent on salaries and benefits for staff members.

Staffing has continued to offer savings opportunities, too. While this isn’t ideal for educating students, it helps the district budget when positions go unfilled, Burr explained.

The district has eight more educators than it did last year, but there’s an overall decrease in total staff because it has 34 fewer support staff employees – secretaries, maintenance staff, paraprofessionals and administrative support.

Despite that decrease in staffing count, the district is spending $3 million more in salaries and $3.2 million more in benefits this year compared to last. This is largely due to a 3.6% wage increase for all employees.

Another 20% will be spent contracting out for busing, food service and cleaning. The rest of the money covers supplies, equipment and other miscellaneous costs.

What's it going to cost me?

This year's proposed tax rate is $7.10 per $1,000 of property value, marking the seventh straight year of the tax rate dropping.

Last year's tax rate was 56 cents higher, at $7.66 per $1,000 of property value — the lowest in more than 30 years.

More:Appleton school referendum now will cost taxpayers only $4 per $100,000 of property

With this year's rate, the owner of a $200,000 home can expect a tax bill of $1,420. The owner of a $250,000 home could expect to pay $1,775.

AASD is turning to taxpayers for a total of almost $74.5 million, which is a 2.5% increase — or almost $1.8 million — in the tax levy. This is a bigger increase than last year's 1.3%.

That increase to the tax levy includes an additional $1 million for private school vouchers. In total, vouchers make up $5.6 million of the tax levy.

Where can I find a copy of the budget?

The district posts the budget on its website here: aasd.k12.wi.us/district/district_budget.

A recording of Monday's budget hearing and the board meeting can be found on the district's YouTube channel: www.youtube.com/channel/UCHo-l09YGgt4uKnCWYvt8Pw.

Reach AnnMarie Hilton at ahilton@gannett.com or 920-370-8045. Follow her on Twitter at @hilton_annmarie.

This article originally appeared on Appleton Post-Crescent: Appleton school district tax rate will go down again to 35-year low