School district surplus stirs debate

Spend it or lower taxes, some question
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The Shawano School District is enjoying budget surpluses worth more than $1 million, but the money might not go back into taxpayers’ pockets.

School Board members are wrestling with whether to reduce property taxes next year or use surplus funds for facility improvements such as new football stadium bleachers.

The debate has started as administrators close the books on the 2015-16 school year and prepare to unveil a new spending plan for 2016-17. The school district’s most recent budget was $26.7 million, including property tax collections of $13.1 million.

Officials say the district finished the 2015-16 school year with a surplus of about $500,000 and that another surplus of nearly $600,000 is forecast for next year.

Members of the district’s Finance Committee went back and forth earlier this week on different options for using the uncommitted funds.

Board member Derek Johnson argued for fiscal restraint and questioned whether the district could hold down property taxes. Johnson repeatedly asked administrators to identify the minimum amount needed to operate the school system for the coming year.

The school district should not collect $15 million in taxes if it only needs $10 million to function, Johnson said.

“I think it’s an honest question,” he said. “If we can have an honest discussion about it, I’d like to know how much we need to bring in.”

Administrators reported that past budget surpluses have generally been used to pay for building upkeep and other capital improvements.

They presented a list of potential expenditures at the high school that include $325,000 for football stadium bleachers, $300,000 for lighting system upgrades, $200,000 for heating improvements, $100,000 for expanded restrooms, $75,000 for concession stand renovations and $35,000 for new gymnasium curtains. Other possible expenditures were identified at the middle school, including $300,000 for new bleachers in the gym.

Louise Fischer, the district’s business manager, said the surpluses have resulted from lower-than-expected employee health insurance costs and other savings achieved elsewhere.

Having a surplus is better than facing a deficit, Fischer said, adding, “There’s a lot of school districts that are very envious.”

Looking ahead to the 2016-17 budget to be presented Aug. 22, administrators told the finance committee that the budget also will be affected by projected increases in student enrollment, more faculty members, rising utility costs and uncertainty about state funding.

Despite the current and projected budget surpluses, officials urged caution about reducing property taxes, saying that such a move could mean the district would get less state aid under the state’s current formula for public education funding.

Board member Beth McFarlane voiced frustration that the state’s formula seems to punish districts by cutting state aid to those giving local taxpayers a break.

“We’re in a difficult spot,” McFarlane said. “We’re trying to be frugal, and if we’re frugal, we get punished.”

Johnson and others, however, argued against spending surpluses on unplanned capital projects. Instead, they said, the district should have long-range capital plans and should create a separate fund where surpluses could be maintained and spent in an orderly manner.

Administrators expressed enthusiasm for creating such a fund, possibly starting with some of the current surplus funds.

The district plans community meetings on the 2016-17 budget for Aug. 31 and Sept. 6, followed by the districtwide annual meeting Sept. 19.