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Nicolet financial forecast foretells 2016 referendum

Declining enrollment, state revenue limits drive need for more funds

Feb. 18, 2014

Glendale — A review of the Nicolet School District's financial forecast makes a 2016 referendum a near necessity, barring substantial budget cuts.

The forecast, presented to the School Board at a working meeting last week, shows how the district has avoided dramatic budget cuts in recent years through a combination of referendum funding and employee benefit reductions after Act 10.

In 2011, Nicolet voters approved with a 54 percent majority an operational referendum to raise property taxes and exceed the district's state-mandated revenue limit by $2.15 million annually through the 2015-16 school year. The biggest motivating factor of the referendum was continued declining enrollment, which has a direct impact on district finances because funding is tied to overall enrollment, Finance Director Jeff Dellutri said.

According to Dellutri's presentation, as enrollment has declined over the years a gap has grown between Nicolet's allowable revenue under state law and its operating expenses. Since 2011, that gap has been filled with the extra taxes allowed by the referendum and cuts to employee pension plans, health insurance changes and other budget cuts.

By tracking enrollment numbers at Nicolet's feeder districts and usage of bus services for area private and parochial schools — for whom Nicolet is obligated by state law to manage busing — district administrators predict a continued decline in enrollment. Their forecast shows a roughly 100-student decline between now and the 2018-19 school year.

Last year the School Board borrowed $4 million to fund energy-saving projects. The payments for those projects is an allowable exemption to state revenue limits, meaning the district was able to raise taxes by an average of 1.5 percent over the course of three years.

As he has said in the past, Dellutri explained that the plan to offset the enrollment decline will be to go to referendum in 2016 for the combined amount of the approved 2011 referendum and recent energy-saving projects. Such a referendum would keep taxes essentially flat in 2016 if the referendum passes.

"We're hoping that the community will continue to support the district, because we think we've managed this (referendum) really well," Dellutri said.

Dellutri also addressed a concern cropping up among Glendale residents, who opened their tax bills this year to find the district portion had increased by 9 percent. Dellutri said the increase was the result of the state Department of Revenue increasing Glendale's equalized value, which increases the city's share of school district taxes in relation to the other Nicolet communities.

The swing is the opposite of a DOR re-evaluation several years ago that saw Glendale's portion decreasing significantly while the other communities picked up the tab.

"You hate to have these fluctuations," Dellutri said. "It really is something totally out of our control. It's really market driven."

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