Here's what might happen to taxes if Denmark schools' referendums are approved in November
DENMARK — The Nov. 8 midterms are fast approaching, which means Wisconsinites will vote for the state's next governor, local state representatives — and whether to approve millions of dollars in education funding.
In Denmark, the school district is asking voters to approve two funding referendums: a $31 million capital referendum and a $2.77 million operational referendum.
If both are approved, the tax rate for the district would increase by 15 cents per $1,000 fair market valuation on property.
What would that look like for a $175,000 home? A homeowner could expect to pay about $1,300 in property taxes to the district for the 2023-2024 school year.
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What's the difference between a capital and an operational referendum?
Anything on your ballot that isn't about a candidate running for office is considered a ballot measure. A referendum is a ballot measure that allows voters to approve or reject a specific proposal, according to the state's Legislative Reference Bureau.
In the case of school districts, referendums typically have to do with money. There are multiple kinds of referendums in Wisconsin, but for school district funding there are only two: capital and operational.
In Denmark, the school district is asking voters to approve one of each.
In a capital referendum, a school district asks voters if it can borrow money, usually in the form of bonds, to pay for a specified purpose. Usually, but not always, capital referendums are for construction or facility maintenance projects.
A capital referendum is also known as a "referendum to issue debt." If you hear the terms being used interchangeably, they're the same thing.
The second kind of school funding referendum is operational; it's often phrased as a "referendum to exceed the district's revenue limit."
In Wisconsin, school districts are limited in the amount of funding they have access to by "revenue limits." Revenue limits are state-imposed caps on how much school funding can be generated via property taxes and state aid.
If state aid to a school district increases, property taxes go down, but the district's revenue remains the same. That's why districts must go to referendum if they want additional spending dollars.
An operational referendum allows the district to exceed the revenue limit by generating additional dollars through property taxes, on a recurring or nonrecurring basis.
Denmark's operational referendum would allow the district to exceed its revenue limit by $925,000 for each of the next three years, for a total $2.77 million.
What would the money pay for?
The $31 million in capital referendum funding would allow the district to remodel and expand Denmark Elementary School to absorb the Early Childhood Center.
The center would close, and 4K and early childhood students would go to the elementary school. New classrooms and learning spaces would be added for the early childhood students, and a cafeteria and gym would be built for students in 4K through fifth grade.
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The district plans to remodel the drop-off and pick-up areas to improve safety by separating bus traffic and pedestrians.
A new secure entrance would be created with the addition to the elementary school to better control access and visitors. With the addition, the elementary school would be ready for a second story to be added as enrollment grows in the future.
The district estimates the construction would be completed by the winter of 2024.
As for the operational referendum, the extra $925,000 the district would get each year will help make ends meet and keep up with operations, District Administrator Luke Goral said.
Ever since 2014, the district has asked voters to approve three-year operational referendums that allow the district to exceed its revenue limit by $925,000 a year. This year's operational referendum is a renewal of the one voters approved in 2020.
The money will go toward transportation, security, routine maintenance, technology and staff, Goral said. The money is spread out over multiple areas to help sustain the day-to-day operations of the district.
Will taxes go up if Denmark's referendum questions are approved?
In short, it depends.
Local school property taxes are paid on a per $1,000 of fair market value basis.
Last year, the district's tax rate was $8.37 per $1,000 of fair market value and the board approved a $7.67 tax rate for the 2022-2023 year Wednesday.
For this year, the tax rate will be $7.67 regardless of the election results, according to Goral. The impacts on taxes wouldn't be felt until the 2023-2024 school year when the referendums would take effect.
Since there are two referendum questions, there are multiple tax scenarios depending on whether one, both or neither of the referendums gets approved.
Here's what could happen to your taxes for the 2023-2024 school year:
Only the operational referendum gets approved: The tax rate will remain the same at $7.67 per $1,000 of fair market value of property.
Only the capital referendum gets approved: 70 cent decrease to $6.97 per $1,000
Neither gets approved: 85-cent decrease to $6.82 per $1,000
Both get approved: 15-cent increase to $7.91 per $1,000
For a home that has a fair market value of $200,000, a homeowner can expect to pay $1,582 to the school district if both the capital and operational referendums are approved.
Why does the district need this money now?
Since the last operational referendum in 2020 was approved for only three years, the district must get it renewed to avoid cuts.
"When someone asks me, 'What happens if you would not get those dollars?' We would literally have to cut 5% of our budget and of course, you can't do that all in one spot," Goral said.
The district's overall budget is about $18.5 million.
With inflation pushing up costs and revenue limits being locked in at 2019 levels, school districts across Wisconsin are feeling economic pressure.
For the $31 million capital referendum, Goral said the absorption of the Early Childhood Center into the elementary school will make the district more efficient.
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Some parts of the childhood center are 100 years old, and the building has lots of maintenance needs, he said.
"Even if we were to stick a lot of dollars into that building, it still wouldn't solve several over other issues with traffic flow, pick-up, drop-off, (a) secured entrance (and) shared staff," Goral said.
With an annual maintenance budget that fluctuates between $50,000 and a few hundred thousand, the district couldn't cover the costs of a project that large without a capital referendum.
What happened to Denmark's pandemic relief money?
Most school districts in Wisconsin got both federal and state pandemic relief aid to help cope with lost learning and disruptions due to COVID-19. There are a few different grant sources, but the largest is known as the Elementary and Secondary School Emergency Relief funds, or ESSER.
Denmark got about $1.5 million in state and federal relief dollars, and the district has already allocated that money, according to Goral.
"We have used those (funds) for student services, for staffing, for some maintenance projects," he said. "...Basically, there's just not enough, unfortunately, to do any sizable projects."
ESSER has specific guidelines for how it can be spent, especially in terms of maintenance projects. And the freeze on the revenue limits for schools has led many districts across Wisconsin, including Denmark, to fill the funding gaps with ESSER dollars.
How long would it take to pay off the capital debt?
Because a capital referendum is a referendum to issue debt, the district would have to pay back the $31 million loan it wants to take out.
The plans to pay off the debt in 21 years.
Is Denmark the only school district going to referendum?
No. Statewide, 42 districts are asking voters to approve referendums. In Brown County, the Green Bay School District is asking voters to approve a $92.6 million capital referendum, and the Pulaski School District is putting a $69.8 million capital and a $8.5 million operational referendum on the ballot.
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When will voters decide?
The general election will take place Nov. 8; early voting started Oct. 25.
The latest you can register to vote is in person at your polling place on Election Day. For a list of voter deadlines for the upcoming election, visit myvote.wi.gov, scroll to the middle of the page and click the "Wisconsin Election Deadlines" box.
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You can also visit myvote.wi.gov to start the voter registration process and find your polling place.
Here are the Demark School District referendum questions you can expect to see on your ballot:
Denmark School District Exceed Revenue Limit Referendum - Question 1
"Shall the School District of Denmark, Brown, Manitowoc and Kewaunee Counties, Wisconsin be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, by $925,000 per year beginning with the 2023-2024 school year and ending with the 2025-2026 school year, for non-recurring purposes consisting of operating expenses, including ongoing educational programming and maintenance, transportation and technology?"
Denmark School District General Obligation Bonds Referendum - Question 2
"Shall the School District of Denmark, Brown, Manitowoc and Kewaunee Counties, Wisconsin be authorized to issue pursuant to Chapter 67 of the Wisconsin Statutes, general obligation bonds in an amount not to exceed $31,000,000 for the public purpose of paying the cost of a school building and facility improvement project consisting of: construction of an addition and renovations at the Elementary School, including an early childhood center, cafeteria, gymnasium and secure entrance; site improvements; possible removal of the current early childhood center; and acquisition of furnishings, fixtures and equipment?"
Danielle DuClos is a Report for America corps member who covers K-12 education for the Green Bay Press-Gazette. Contact her at dduclos@gannett.com. Follow her on Twitter @danielle_duclos. You can directly support her work with a tax-deductible donation at GreenBayPressGazette.com/RFA or by check made out to The GroundTruth Project with subject line Report for America Green Bay Press Gazette Campaign. Address: The GroundTruth Project, Lockbox Services, 9450 SW Gemini Dr, PMB 46837, Beaverton, Oregon 97008-7105.
This article originally appeared on Green Bay Press-Gazette: Here's how Denmark's November school referendums might impact taxes.
