The Hutchinson School Board had a weighty issue to consider this past month, and now that same issue will be in the hands of School District 423 voters on Tuesday, Nov. 8.
Over the past few years, voters have been familiar with bonding issues — voter-approved property tax increases that must specifically target buildings and renovations. It has been 10 years since voters considered a levy, otherwise known as a revenue referendum. That's because it was 10 years ago that voters approved a levy, and its duration is set to expire in the near future. One way to remember the difference between a levy issue and a bonding issue is the saying, "bonds are for buildings, levies are for learning." In other words, levies pay for school operations and learning programs.
Set to expire after taxes payable in 2023 is a $310.88 per pupil levy. It is currently paid for as a portion school district property taxes. The money has contributed to the school's $36 million total operating revenue. Overall, local dollars cover 12% of the school's budget, with the remaining share coming largely from state dollars paid per student, or for programs such as special education.
Residents keeping up with District 423 have likely heard a few issues regularly discussed regarding school finances, and at a School Board meeting this past month, those same subjects were revisited. In short: Hutchinson schools are following a statewide trend tracking lower enrollment overall. As a result, they take in less money from the state, and are faced with budget cuts to make up for the difference. Meanwhile, Director of Business and Finance Rebecca Boll told School Board members, state funding to schools has not kept up with inflation. If it had, she said, the school would receive $1,264 more dollars per student than it does today. Other major revenue streams have not kept up with inflation as well, notably money to fund special education services.
Such factors led the school board to agree in a 5-1 vote to ask voters to approve two items on Election Day:
- The first item will ask voters to approve renewing the $310.88 per pupil levy for another 10 years.
- The second item will ask voters to approve an additional $382 per pupil levy.
If the first item is not approved, the school anticipates it would cut $895,000 from its budget. Other cuts will still be necessary, Boll said, even with the first item approved. The second item would mitigate those cuts further, but not entirely remove their necessity.
The levy burden would be spread amongst the district's overall tax base, including commercial and residential businesses. As for agricultural properties, the house, garage and one acre of land would be assessed. The school plans to have a tax calculator available on its website so voters can see how the levy would impact their taxes.
One good reference point is a home with a market value of $200,000. According to data provided by the school, such a home will see the existing levy contribute $95 to its tax burden in 2023. But starting in 2024, if the first item is renewed, it would likely contribute $91 — $4 fewer — due to a growing tax base. The second item would add an additional $117.
"It's a big ask for our community for sure," said Hutchinson School Board Chair Tiffany Barnard.
Board member Michael Massmann asked Boll to quantify how a failed levy question would impact staff. She said any answer she could give would be potentially incorrect because it is unknown how lawmakers will adjust the per-pupil funding formula in the next few years, and it's possible they could tackle the issue of special education funding. But, roughly speaking, if the levy stays the same, the school is expected to cut 15 full-time equivalent positions, and if no levy passes, it could be up to 30.
"Which will skyrocket class sizes," Massmann said.
School Board member Keith Kamrath advised asking for a smaller amount with the second question. This past year the school has surveyed residents to understand what levy questions are most likely to gain public support. A smaller ask had a higher chance of succeeding. Past voter questions, he said, have shown the importance of making such choices based upon the data.
"The problem that we have is we don't have any good options," he said, noting that no amount the school might ask for will cover all costs, and that it would behoove the board to be more strategic. "I do not like coming home empty handed."
Massmann said he did not believe the proposed questions ignored the data the school had collected, and that the second question was still within the margin of error for a potential "yes" vote, according to the survey.
Board member Erin Knudtson said moving forward board members must be honest about what is in jeopardy without the levy, and what impact a "no" vote would have on students. Kamrath said he believes voters will prioritize their finances, no matter how many good reasons there may be to vote "yes."
Board members Barnard, JoEllen Kimball, Knudtson, Sara Pollmann and Massmann voted to bring the question to voters. Kamrath voted against the motion, saying, "I will respectfully vote 'no.'"
"I think we have a chance," Kimball said.
