Revenue controls threaten Laona's future District administrator fears they may force consolidation

• Update: On September 8, Laona School District voters defeated the $175,000 referendum

• Financial problems may force district to eliminate distance education program
• Resources on school district revenue controls

Revenue controls are forcing school districts throughout the state to eliminate educational programs, cut back on technology and maintenance and sometimes lay off teachers.

“I got kids using textbooks here that have tape on top of tape on top of tape because I can’t afford to buy them books.” Storm Carroll

But in Laona, these state-imposed revenue controls are having an even more far-reaching impact — they threaten the mere existence of the district, according to District Administrator Storm Carroll.

“If things don’t change, I can assure you that in three years, this place won’t be here, at least not as Laona School,” he said.

Carroll is fighting on two fronts to save the district. Most immediately, he is asking residents of the Laona School District to approve a $175,000 referendum on September 8. If approved, that would help him shorten the list of proposed budget cuts that range from sports programs to drivers’ education to distance learning programs to laying off the district’s only principal. Secondly, he wants to educate the public and policy-makers to what he sees as the severe inequities and inconsistencies in the school finance and revenue control laws.

Imagine you’re a small business owner, says Laona School District Administrator Storm Carroll. Your annual expenses are $150,000 and rising every year. But the state government passes a law that says your business can only take in $100,000 a year.

“How long will you be in business?” he asks.

That, says Carroll, is similar to the situation faced by Laona Schools as a result of state-imposed revenue controls.

The district faces a financial crisis that could force it to shut down and consolidate with a neighboring district. That’s a scenario Carroll is desperately fighting to avoid.

“If this school district consolidates with another one, this community will lose its identity,” he said. “Nobody wants to live in a community that doesn’t have a school.”

Carroll is waging a battle to prevent the dismantling of his district.

Referendum scheduled

His most immediate strategy is to ask district residents on September 8 to approve a $175,000 referendum to exceed the state-imposed revenue controls and avoid some of the drastic cutbacks and layoffs he has outlined for the community.

These $284,000 in cuts include the possible layoff of the district’s only principal, who oversees operations of three contiguous schools covering pre-kindergarten through 12th grade. Carroll would be the district’s only administrator.

The long list also includes cutting 1½ teacher aides, a custodian, a secretary, the distance learning program, drivers’ education, the gifted & talented program, and non-high school sports programs.

Also on the chopping block is the highly successful Student Achievement Guarantee in Education (SAGE) program, which cuts class sizes in early grades and is proven to raise the achievement levels of children. The program is targeted to low-income students.

Potential budget cuts 1½ teacher aides Distance education Summer school Drivers’ education Gifted/talented program All junior high and elementary school sports The fall play Graduation/scholarship advisor Mock trial L Club Assistant golf Balance of curriculum writing College credit reimbursements School board legal services School board travel Administrative travel Administrative equipment Administrative dues and fees Take home bus Breakfast program Entire SAGE program Some CESA services Cuts from requisition book PK-12 principal One custodian One secretary One bus route (consolidate) 6th grade field trip Half of elementary music and art program

Unnecessary and unfair

The whole budget-cutting exercise is time-consuming, expensive and a distraction from the district’s need to focus on educating children. And, according to Carroll, it is unnecessary and unfair.

The primary source of all this frustration and anxiety in his district, he said, is the 1993 law that placed revenue controls on school districts. The law was passed in conjunction with the state’s decision to increase its share of school costs. In an effort to maintain control over those costs, the state placed severe restrictions on teacher salaries (through the “Qualified Economic Offer” law) and placed tight restrictions on how much money school districts could raise and spend (through revenue controls).

Carroll believes both those laws threaten the quality of education. And he thinks neither was well-thought-out.

The revenue control law, he said, punishes districts such as his in three ways.

Spending levels: Revenue controls are based on the district’s spending level in 1993. From that starting point, districts can raise spending by a limited amount per pupil. That means that districts which had high spending levels in 1993 can maintain those high levels under the revenue controls. Districts such has Laona, which have been conscientious about spending in the past, are forced to maintain that low spending level.

Laona has kept its tax rate down by spending down its fund balance. However, its fund balance is now at 18.2%, while the recommend fund balance is 27%, Carroll said.

“We are being penalized because we spent wisely in the past,” he said.

Enrollment: Since revenue controls are based on enrollment, districts such as Laona which are losing students are punished. Since 1993, Laona’s student population has declined by 10 students. (The district has 332 students this fall). As a result, state aid has gone down by about $70,000 per year, amounting to $210,000 in lost revenue the past three years. But expenses keep going up. Textbooks that cost $25 in 1988 cost $75 today, he said. Buildings still need to be heated (up 7.5% this year) and maintained, phone bills still need to be paid (up 6% this year), and the loss of 10 students spread throughout 13 grades does not warrant a reduction in staff.

In fact, he said, under revenue controls, the district’s revenue will increase 0.8% this year, while costs are rising at 3.9%. That requires cuts in programs and services.

To compound that problem, budget cuts one year reduce allowable spending the following year.

“When your expenditures go down, your revenue caps go down,” Carroll said. “You spend less, you get less, you spend less, you get less. It just spirals down.”

The state has passed a law designed to ease the impact on declining enrollment districts, but Carroll said that law provides little relief — it merely delays the financial impact by one year.

Property tax base: The Laona School District relies on a relatively small number of property owners to pay for its operations. Two-thirds of the property in the heavily forested district is not taxed because it is owned by the federal or state government.

The federal government used to pay “impact aid” in lieu of property taxes, but that has dwindled from $85,000 a year in 1988 to practically nothing today, Carroll said.

Half of the other one-third of the property is owned by two large corporations — Consolidated Papers Inc. and Conner Forest Industries Inc. — Carroll said. Under the state Forest Crop Law and Managed Forest Law, these corporations and other large property owners pay substantially less in property tax on land that is not being actively logged or otherwise utilized for business in return for opening the land up for public use. The state compensates the district for some of that lost revenue, but Carroll said the district loses out.

“We have a couple senior citizens up here paying more on their ramshackle homes than these corporations pay on hundreds of acres of land,” Carroll said.

The large burden of paying for the schools is falling on private property owners, many of whom are senior citizens on fixed incomes. “And now I must ask them to pay 3 mils more to bail us out,” Carroll said.

In the September 8 referendum, district residents will vote on a plan to increase their taxes by $3 per $1,000 of valuation. For the owner of a $50,000 home, that means an additional $150 in taxes. Without the referendum, the levy is $14.30 per $1,000 of assessed valuation, or $715 for a $50,000 property.

Even if the referendum passes, Carroll said, the district still will have to cut $109,000 from the budget.

Carroll blames Madison

Carroll does not hide his anger at the governor and Legislature for creating today’s school tax and financing problems. Over the years, he said, tax policy coming out of Madison has shifted the tax burden from corporations to homeowners — and that is what created the property tax crisis.

Then, in addressing the tax problem they created, he said, they have ignored the impact of revenue controls, school finance policy, state aid cuts and teacher salary caps on education and children — especially on children in poor areas.

“I want to know why a kid in Three Lakes is worth $2,000 more than a kid in Laona,” he said, pounding his fist on the table.

Loss of local control

Above all, he is angry that school districts “have totally lost local control.” No other governmental entity — counties, cities, technical college districts — have restrictions on how much money they can raise. They merely determine what they need, assess how much the community can afford and tax accordingly, he said.

Even the state does not have to go to referendum to spend hundreds of millions of dollars on huge construction projects, such as “all those damn prisons,” he said.

Carroll also believes the state should stop interfering with the local collective bargaining process and let districts determine what to pay its teachers.

“Teachers deserve to be paid well,” he said. When job requirements are taken into consideration, “it’s the lowest damn paying profession there is.”

Carroll is fighting hard in the battle to pass the September 8 referendum, but he’s in a much larger war to preserve quality education in every part of the state.

“If you don’t fight for what you have, you’re going to lose it,” he said.

Posted August 25, 1998; Updated September 9, 1998