Elcho Teachers Asked to Delay Cashing Checks

By Joanne M. Haas

Cautioning that the checks could bounce, Elcho School Superintendent Wayne Johnson asked some teachers and staff to delay cashing their December 29 paychecks or to cash them out of town.

"It was quite the shock" to teachers and other staff, who have their own bills to pay, said guidance counselor Amy Jacobs.

On January 2, Johnson appeared before a local township board and requested early delivery of the scheduled January 15 tax payment to the school. The township complied, and the payroll was covered.

Elcho School Board member Richard Burby later said the employees should not have been told not to cash their checks. The board would not have let the checks bounce, he said. He said the district could have borrowed money on a short-term basis if it became necessary. Although the district had a cash flow problem, it has a $1.2 million fund equity, Burby said.

Burby, a member of the board of directors of the Wisconsin Association of School Boards, said Elcho has excellent staff and it is the district's obligation to see that they get paid.

"In order for us to maintain credibility with our employees, there's no way we're not going to pay them," Burby said.

According to Johnson and Burby, the district's budget situation was caused by a number of factors, including the impact of state-imposed revenue controls, an end-of-the-year cash flow problem, a 700% increase in the sewer/water rate, hikes in fuel costs for buses covering the district's 400 square miles, and a doubling in natural gas fees. In addition, December included a payroll schedule of three rounds - December 1, 15, and 29 - instead of the usual two.

Elcho's problems are not unique among Northwoods schools. Revenue controls took effect with the 1993-94 school year, passed by the Legislature and signed into law by Gov. Tommy Thompson with the goal of easing property taxes. A district's state aid and property tax revenue, and therefore its spending, are linked to enrollment and property values. Districts must get voter approval to exceed the limits.

Elcho's problems are just beginning

In 1998, Elcho voters approved a $3 million referendum that included a major building addition, asbestos removal, computer labs, furniture and building renovation.

"You can't hit them (again) in three years," saying the building is beautiful but the district now needs more money for teachers and programs, Johnson said.

Johnson said the district is just now beginning to see the signs of problems to come as a result of revenue controls. "We will not really start feeling the pinch for two more years," he said.

Guidance counselor Jacobs, who is one of three co-presidents of the Elcho Teachers Association, said the district had "quite a surplus" for years and never needed to short-term borrow to make ends meet at the end of the calendar year. But since the building project, and the increases in operating expenses, "that balance is now down to where it can't carry us over."

The Elcho district has a high poverty rate - 51% of the district's 434 students participate in the free breakfast and free lunch programs - but has high property value because of the large number of vacation homes.

The district employs 40 teaching professionals and covers the area generally bordered by Rhinelander to the north and Antigo to the south, Tomahawk to the west and Wabeno to the east.

The budget cuts have some asking about consolidation with Rhinelander or Antigo, a bad option Johnson said would put some kids on the bus for four hours per day.

Johnson, in his fourth year as administrator, said the district has been recognized by the state Department of Public Instruction and state tax groups for improving test scores.

But there is concern, officials said, that revenue controls will force the district to make budget cuts that will undermine its ability to maintain that high quality of education.

"We have an excellent facility and excellent teachers and quality programming, and I would hate to see that deteriorate," Burby said. "But if this keeps up and we have to reduce services to students, the ones hurt most are the children, and that's wrong."

Burby said modifications are needed to revenue controls.

"It's tough to tell students you can't offer the same quality of education you had last year because you had to cut back on staff and materials," he said. "How far can you go and still have a truly quality education system?"

When state revenue controls allow a budget to increase 2.1% but expenses are up 4% "you don't operate very long," Johnson said.

Jacobs called the budget situation "a scary time" because staff and resources keep getting cut while children's needs increase.

And, the situation is not helped when the state "is throwing standards and testing at you, but taking away the resources."

And while the paycheck problem has never happened before, "that doesn't say down the road it might not again," she said.

Edgar administrator wonders if small districts can survive

Barkley Anderson, district administrator for Edgar Public Schools, wonders whether the revenue control law is designed to encourage smaller districts to consolidate.

"It is pretty tough for school boards if you don't have control over your revenues and expenditures," Anderson said. "Are small districts like Edgar and Elcho going to be able to keep going?

"At the end of the tunnel, is there a scheme for consolidation?" Anderson asked.

Edgar's enrollment of 670 students is down from a high of about 700. Under the revenue control law, falling enrollments mean declines in state aid, regardless of rising costs. This year, the district is facing a $70,000 shortfall in its $5 million budget.

Targets include elementary arts and music. Cuts have already been made to summer school, busing for athletic events, and more.

The voters in this rural farming area will be asked in April for permission to raise $150,000 to "get us by for three or four years," Anderson said.

Anderson said Edgar's heating bills have doubled - from the $5,000 bill in December 1999 to $10,500 this past December.

"The bottom line is school districts need more money just to keep up with the basic things that we provide," he said.

"People get upset with school boards when they have to cut things," he said.

Colby voters recall five board members

That definitely was the case in the Colby district. After the Colby School Board - facing similar budget struggles - voted to redefine the use of the local elementary school in Unity and turn it into an early childhood center, the community recalled five members.

Problems persist in other surrounding school districts, Anderson said, from Florence to Wausau to Stevens Point.

He found the January meeting of the Wisconsin Association of School Boards frustrating in that a resolution asking for flexibility on revenue caps failed.

"There are still some schools making money on the revenue cap formula because their enrollment is increasing. You really have a distinct difference between the haves and the have-nots. You're either losing money or making money," he said.

Study documents growing pain of revenue controls
Resource page on school district revenue controls

Posted January 30, 2001; Updated February 7, 2001