Florence: Demise of a School District

By Joanne M. Haas

The week after the Florence County School Board voted 6-1 to shutter the financially strangled district by July 2006, teachers Nick Baumgart, Karen Harrison and Kent Walstrom huddled around a computer in a steamy high school classroom writing an application for an environmental education grant.

Superintendent Jan Dooley, a 20-year Florence business teacher who three years earlier took the fraying administrator reins, sat nearby on this stifling July morning as the teachers paged through forms for the $15,716 Wisconsin Environmental Education Board grant to support a school forest program.

“Let’s proceed like we’re going to have a school,” Dooley said as the three teachers nodded a sentiment voiced 12 hours earlier one floor below in the high school auditorium.

That’s when Florence teachers congregated to vent, to question and to brainstorm the what-ifs regarding the future of their students, their school and their careers.

Florence has reluctantly become the poster child for all that is wrong with the state’s system of school funding, and all of Wisconsin is watching.

Jan Dooley

Anger, anxiety, worry, tension, resignation and fixing for a fight – every emotion seemed to be seated that evening among the teachers gathered in the hall lit by an open side door reflecting the red sinking sun. Not only were the teachers faced with planning the details for the new school year, they also were forced to weigh a plan for the big unknown of the following year: Will there be a Florence district or will it evaporate?

Now that the school board has voted to dissolve the district, the answer rests in the hands of a state-appointed review panel. Just to make it even more unnerving for the staff, the school board vote landed in the midst of contract negotiations for the next two-year period.

“I am going into this school year as if we are going to have a school,” said Baumgart, a Florence graduate who has taught in the district since 1989. “When you look at the reasons not to dissolve, it makes just way too much sense. It just seems so unthinkable that it could happen.”

But that is exactly what might happen. A decision by the review panel – appointed by State Superintendent Elizabeth Burmaster – is due by January 15. The last time a Wisconsin district dissolved was in July 1990 when the Ondossagon district merged with the Drummond, Washburn and Ashland districts in the northwest corner of the state.

Nick Baumgart

In the meantime, this is a community in turmoil about the potential loss of its school system – the one thing that unifies the county. The drive to Florence from points south winds through many small communities where signs bragging about the local prep team’s accomplishments give passing motorists a sense of community pride.

Florence’s pride and concern is no different, as reflected in some of the letters published in the local weekly paper – The Florence Mining News. One letter from a teacher signed Mrs. Koehn states, “There’s still time to save the school.”

Dooley, board members and the teachers point to the state’s 1993 school district revenue control law as the primary cause of the district’s pending demise. But it is combined with other factors, including declining enrollment, escalating fixed costs, a low property tax base, and the region’s low incomes. The median income in Florence County is about $33,000.

Still, in spite of the fear of the unknown and the tension that has divided this sparsely populated but rugged region, there still are glimmers of optimism.

And at the end of the meeting, the teachers agreed to again explore ways to save money in their health insurance coverage – just as they had in the previous contract when they agreed to sacrifice $200,000 for the district. It’s a sign of how badly they want to keep the district alive – showing a willingness to make more financial sacrifices despite the fact that their salaries already are lower than teacher salaries even in other parts of this economically challenged area. Baumgart said a teaching job just across the border in Michigan would mean an immediate $10,000 pay increase. But Florence teachers, like most citizens, have a deep devotion to their school district and community.

Kathy Chellew

“We all have hope that something will happen,” said teacher Kathy Chellew, who has worked at Florence for 13 years following a dozen at a private institution. “It is the best elementary school that you could send your kids to. It is just a great school.

“But we need more money,” she added.

Money, of course, is both the problem and the solution. That’s why the district asked voters three times in 18 months to approve $750,000 to keep the district in operation. After the three referendums went down, the board said it had no choice but to put the district out of its financial misery.

There were signs in August that a fourth referendum might be organized by local taxpayers in an effort to show the Department of Public Instruction review board the community remains committed to educating its children. But as of late August, that fourth referendum had yet to gel.

Still, School Board President Dan Brereton is optimistic a fourth vote may happen. It will have to come from the taxpayers and not the school board, he said.

Into the frying pan
A short three-block walk from the school campus is the Florence County Jail where Brereton, a corrections officer/dispatcher, is on duty in a slightly darkened command office surrounded by well-lit, occupied cells. Brereton, sporting a finger brace after one of the prisoners attempted to remove the digit with his teeth the day before, has become something of a self-taught school funding whiz after his election to the school board just last April.

The night before the deadline for candidacy papers, the Breretons – who have three children in district schools – got a call from a board member seeking candidates for two vacancies. So the political freshman, who moved to Florence from Lodi several years ago, agreed and soon found himself not only on the embattled board but tapped to be its leader.

Brereton promptly became one of the state’s more well-known school board presidents by “taking a stand for education” and taking on one of the biggest issues facing Wisconsin – the school financing system.

“The No. 1 problem is the state funding formula. That’s No. 1. Period,” Brereton said. “Certainly, some past board decisions speeded it up. But this would have happened anyway.”

He said now was the time to vote for dissolution because the district no longer had the resources necessary to provide a quality education.
“As a board, we protected the education of our children as best we could,”

Brereton said. “We drew a line for education.”

Even if the district is dissolved, Brereton said he will stay the course and fight for the school funding formula changes championed by the Wisconsin Alliance for Excellent Schools. The WAES proposal, called the Wisconsin Adequacy Plan, seeks to provide property tax savings through a hike in the state sales tax.

Gene Degner

If the funding system is not changed, he said, other districts will end up like Florence. Gene Degner, director of the Northern Tier UniServ, said the northern part of the state is projected to lose roughly 30% of its students in the coming 10 years.

“My kids will bounce to another district and it will face the same problems,” Brereton said. “If we can limit this to one dissolvement, that is my goal.”

Meanwhile, the board continues to operate the school district. “My priority is to make sure we continue with our quality education next year. So that means trying to retain teachers and hire qualified teachers to get by this next year,” Brereton said.

How did it come to this?
The official Florence County Web site says the county has 5,088 residents spread over 495 square miles.

Known as an outdoor enthusiast’s playground, Florence County’s greatest natural asset may also be the school district’s biggest financial villain. Roughly 80% of this northeastern county’s lands are stunning national, state and county forests, and most are exempt from the property taxes that fund Wisconsin’s public schools.

According to a chart provided by the Florence County treasurer, 312,184 acres were exempt from property taxes in 2004. That left 95,681 acres as taxable – or 30.6% of the total acreage in the county.

Add to that the fact Florence County’s rustic beauty has attracted wealthy absentee landowners who have driven up property values by paying big bucks for lakefront and other vacation properties.

“With the absentee property owners buying up and paying high prices for lands, it causes the equalized value to go up. And the way the (school) funding formula works, that drops the state aid,” Superintendent Dooley said.

Dooley called the school district revenue limit law the “real culprit” behind a structural deficit this school year of $425,000 and a projected deficit of $1.1 million in 2006-07, should the district survive.

“We were a very lean-spending district” when the law was passed in 1993, Dooley said, “so we were capped low. It was bound to catch up with us.”

Another big factor is declining enrollment since state aid fluctuates with enrollment. The district enrollment has been dropping precipitously partly because residents – particularly those who live near other districts – are using the open enrollment option to send their children to neighboring districts. Some are angry about past conflicts with the school board and administration, and some are upset about the school board’s decision to close Aurora Elementary School in 2003-04. That decision caused a lot of pain and anger that, ironically, may have contributed to the subsequent defeats of the three referendums.

An analysis by the Wisconsin Taxpayers Alliance shows Florence’s allowed revenue increase in 1995 was 5.4%, just above the state average of 5.2%. That was when the district’s enrollment was still more than 900 students. Last year when the district’s enrollment dropped below 700, Florence was told to cut revenues by 0.2% in 2004 and 1.5% in 2005.

The district has responded with some very painful cuts, Dooley said, and has sliced $1.4 million in programs and services from a $7.8 million budget in the last three years.

“Since the 2002-03 school year, we have decreased our personnel about 28%,” she said, adding the district has gone from about 113 full-time equivalent employees to about 81 for this school year. That includes 43 or 44 teachers for this school year.

The reductions have largely been accomplished through cuts to education support professionals and a principal, and elimination of a bus route.

James Uren

James Uren, a math teacher for the 6th and 7th grades and president of the Florence teachers’ union, said the cuts mean teachers are taking on more responsibilities and leading larger class sections. “The only cuts left to be made with our teaching staff is to start cutting programs,” he said.

School officials repeatedly point out that while enrollment declines can sometimes lead to some reduced costs through school closings and staff cuts, many fixed costs continue to increase, including gasoline for buses, heating, building maintenance and much more. As state aid declines, the school district must pick up those rising costs.

And things aren’t looking any better this year. District officials expect an enrollment of just about 600 for the 2005-06 school year, meaning a further decline in desperately needed state aid, exasperating what ome are calling the “death cycle.”

Another factor in the district’s fiscal crisis is sharply rising health insurance costs. In addition to the health benefits for current employees, Dooley said a late 1980s contract provision to cover health insurance for retirees – passed as a cost-savings measure – has backfired because of the sudden and dramatic increase in health insurance costs. Last school year alone, Dooley said, this provision cost the district more than $400,000.

While this issue has been addressed in past and ongoing contract negotiations, it remains a fixed cost Florence will just have to manage for years to come, Dooley said.

Dooley said other factors include previous administrative and board decisions, including the $400,000 buyout of a previous superintendent and two principals. Fixed costs and expenses out of the district’s control also play a big role, she said. Sharply rising gasoline prices are a significant factor for a district that covers such a large geographic area. One bus route covers more than 120 miles a day.

In an effort to stay afloat, the district asked voters three times over 18 months for more money. All the referendums called for $750,000 a year, Dooley said. The first one on May 11, 2004, sought the annual allotment for five years.

“That wasn’t a cure-all. That was to buy us time,” she said. It failed by 288 votes. The next referendum was February 15 of this year, and the allotment was sought for three years. That failed by 46 votes. The third try for the same dollars and years was attempted June 28 and failed by 21 votes.

Dooley agrees with the board that the district cannot operate without being able to support normal operations – meaning textbook rotations, building maintenance, technology updates and reliable buses.

“We have downsized to the point that I believe to cut any further into programs will cost further loss in enrollments,” she said. “That would negate the cuts that are made and it wouldn’t be good for the kids.”

Dooley said it was inevitable that at some point, school district revenue controls and the state’s school funding system would begin to force school districts out of business.

“I surely wish it wasn’t Florence,” she said, “and Florence won’t be the last.”

A tragedy for the entire state, by WEAC President Stan Johnson
Resource page on school funding
Resource page on the 2005-07 state budget

Posted August 26, 2005