A Focus on Financial Responsibility

Today’s current economy has everyone – from households to businesses – tightening their belts and cutting their budgets. The Green Bay Area Public School District has been no different. Over the last four years, the district has cut more than $28 million from its budget, and will be cutting another $6 million this year due to shortfalls in the state funding formula and unfunded mandates.

These budget cuts have placed a strain on the district’s general budget, with capital improvements and technology upgrades put on deferment. Now the district has reached a tipping point, and on Tuesday, April 6, 2010 residents will have the opportunity to vote on two referenda questions, each to address basic needs in the Green Bay Public Schools. Question 1 requests permission to borrow $11 million for urgent facility repairs throughout our schools, and Question 2 requests permission to borrow $5.7 million to address significant technology needs. Each question must be voted on independently.

Won’t My Taxes Increase?
When a Wisconsin school district needs to borrow money, by law it must be put to public referendum, and presented to all registered voters. This is unlike city and county municipalities, which can borrow funds once approved by its elected council or board members.

Because of old debt retirement, adding new debt will still result in taxes going down.

The few times the district has gone to referendum, it has tried to do so with a minimal impact to taxpayers. For this basic needs referendum, taxes will not increase if both questions pass; in fact, they will go down $2 on a $100,000 home. Because the district is retiring old debt from the 2000 referendum remodeling East, West and Southwest High Schools, a certain amount of new debt can be brought on without increasing taxes. In fact, taxes will keep going down every year, until the new debt is paid off entirely in six years (2016-17 school year). If both questions are not approved, taxes will decrease by $20 on a $100,000 home.

If both questions pass, your taxes still go down.

The Time is Right
Right now, we have a unique window of opportunity to address our serious facilities issues and technology upgrades without raising taxes. As previously mentioned, the district is soon retiring the last of its debt. Even if both referenda questions pass, we will still be debt free by 2016. This current referendum investment will be paid off in six years.

Financing is also very favorable to the district at this time. Right now, Federal construction bond programs offer very low or even zero-interest financing on many projects in the referendum if approved by voters this spring. This low interest financing, which expires in 2010, will reduce the cost to taxpayers by saving the district more than $1 million in financing costs. Additionally, traditional interest rates are at a historic low.  We have earned a favorable financial rating due to our strong fiscal management which will help us secure the lowest interest rates possible.

Lastly, we are in a highly competitive construction market. All projects will be competitively bid and will put qualified people in the community to work – a local stimulus package.

While there may “never” be a good time to propose referenda to the community, moving forward right now does have its advantages, as outlined above. If the referenda questions are not approved, the District will continue to face the same immediate, urgent facility and technology needs with no funding source. The projects will likely continue to be deferred, at risk of substantial additional costs due to an increase in construction costs as well as the damage from failing systems that could have been prevented.  For technology, the District will be forced to continue to choose between funding programs and technology, as there will not be enough money for both.  The time to move forward is right now.

If you would like more information about the referendum, please go to www.greenbay.k12.wi.us/basicneedsreferendum.

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