District Administrator's Corner

by Brian Krey, Business Manager, guest writer River Valley School District I am grateful that River Valley Schools have this space to inform, educate, and sometimes entertain stakeholders near and far on a weekly basis. There won’t be much entertainment this week, but I hope to inform and educate readers on three items over the next few weeks that include the district financial forecast, ESSER (COVID-19) federal grant dollars, and land/property sale revenue. In April, 2019, the River Valley community supported an operational referendum that addressed deficits in the 2019-2020, 2020-2021, and 2021-2022 school years. We are grateful to everyone in our community for your generous support. This referendum asked for $6.55 million over three years, and the projected tax rates for each year were estimated at $10.70, $10.97, and $11.58. It’s important to note that these referendum dollars are being utilized to maintain what we currently have at River Valley (staff, programs, course offerings, class sizes). Without these referendum dollars, River Valley would not be able to provide many of our current elective and academic classes or programs and class sizes would be significantly higher.  There are many factors that impact our tax rates, including changes dictated by the state (district revenue limit and state aids), and the overall assessed value for our district. Thankfully, a combination of these items have resulted in lower tax rates than anticipated two years ago. In addition, the River Valley Board of Education did not utilize the full referendum amount in 2020-2021. The district tax rate in 2019-2020 was $10.09 and this year (2020-2021) the rate is $9.65. This year’s tax levy of $9.65 is the lowest it has been since 2008. In addition, River Valley’s tax rates have decreased six of the last seven years.     Actual Tax Rate Projected Tax Rate (2 years ago) 2019-2020 $10.09 $10.70 2020-2021 $9.65 $10.97   This past February (2021), I presented a financial forecast to the board of education with surplus/deficits for the next three years. Our current projections show deficits of $3.7 million in 2022-2023, $4.66 million in 2023-2024, and $5.19 million in 2024-2025. These budgets with projected deficits do not add any additional staff or programs. Again, our forecasted budgets are built upon maintaining our current elective and academic classes and programming.  Another operational referendum will be required to ensure our students are provided a quality education moving forward, beginning in the 2022-2023 school year. Operating by referendum is not sustainable… and this problem is not unique to River Valley. According to the Wisconsin Policy Forum, between 2008 and 2018, 189 school districts passed 387 referendums to raise school taxes for operation purposes, similar to River Valley. The primary reason River Valley has projected significant budget deficits is due to the amount of revenue our district has been allowed over the last decade. Each year, the state budget provides a revenue limit amount per pupil for each school district. The percentage that the state budget has adjusted our revenue limit amount per pupil each year, over the last decade, is listed below.   Year Per Pupil Annual Increases for River Valley Operational Budget approved from State 2010 – 2011 2.10% 2011 – 2012 -4.90% 2012 – 2013 0.50% 2013 – 2014 0.75% 2014 – 2015 0.75% 2015 – 2016 0.00% 2016 – 2017 0.00% 2017 – 2018 0.00% 2018 – 2019 0.00% 2019 – 2020 1.71% 2020 – 2021 1.71% *These increases average 0.26 percent increase annually in district revenues from the state budget over the last decade. Another reason that many districts are in budget deficits is due to the current public school funding formula. This funding formula was created to guarantee 66 percent (2/3) funding from the state when it began in the 1993-1994 school year. This guarantee was later repealed in 2003, but the formula has remained unchanged. Currently, River Valley School District receives 37 percent in funding from the state, which requires local taxpayers to fund the remaining amount (63 percent). Our district’s general fund expenses have averaged a modest 2.27 percent increase over the last five years, only because we have closed schools, decreased staff, and made cuts where it has been possible to our budget. In addition, we no longer have post-employment/ retirement benefits and have bid out or changed health insurance plans over the last decade for cost savings. Lastly, school districts are not immune to inflationary and annual increased costs. We will continue our efforts to serve our students and community in the most economically efficient and instructionally effective manner possible. Do not hesitate to contact me with further questions.