Frequently Asked Questions
What is an operating referendum?
An operating referendum asks permission from voters to exceed the state-imposed revenue limit for the purpose of funding school operations. It is NOT a referendum to incur debt to complete facility projects.
Is this a non-recurring or recurring referendum?
This is a recurring referendum. A recurring referendum asks for support on an ongoing basis. It will continue to occur each year. KM is asking for what it needs to keep its schools running as they are now, with limited reinstatement of cuts made earlier this year. KM is asking for:
- $2,500,000 for 2020-2021
- $1,500,000 for 2021-2022
- $1,500,000 for 2022-2023
- $1,500,000 for 2023-2024
After the 2023-24 school year, the $7,000,000, approved by voters, will be used to sustain operations on a recurring/annual basis as part of our revenue limit authority.
What is the tax impact of the 2020 referendum?
If voters approve the referendum, the current KMSD tax levy rate of $9.63 will increase 15 cents to $9.78 per $1,000 of property value. Below are the projected ONE-TIME increases, which would be seen on 2020 tax bills:
$37.50 - one-time tax increase for a home valued at $250,000
$45.00 - one-time tax increase for a home valued at $300,000
$52.50 - one-time tax increase for a home valued at $350,000
$60.00 - one-time tax increase for a home valued at $400,000
What does KM mean by "a one-time increase?"
The tax rate, as a result of a successful referendum, will increase by $0.15 (per $1,000 of property value) in the first year. This referendum WILL NOT INCREASE the tax rate above $9.78 in future years. It is a one-time increase. See the example below for a home valued at $400k:
Tax Year Home Value Referendum Tax Impact
2020 $400K $3,852
2021 $400K $3,912
2022 $400K $3,912
2023 $400K $3,912
2024 $400K $3,912
2025 $400K $3,912
2026 $400K $3,912
What would the tax impact be if the referendum is not adopted?
The tax rate, if the referendum is not adopted, will remain at $9.63 per $1,000 of equalized property value. See the example below for a home valued at $400k:
Tax Year Home Value Tax Impact
2020 $400K $3,852
2021 $400K $3,852
2022 $400K $3,852
2023 $400K $3,852
2024 $400K $3,852
2025 $400K $3,852
2026 $400K $3,852
How can the district increase its revenue authority over time and not have a larger impact on the tax levy?
With the approval of the 2020 referendum, the district's levy for debt, incurred to support the 2014 capital projects, will decrease over the next four years, shifting a greater portion of KM's overall levy to support operations. This allows the overall levy to remain stable.
What is the history of Kettle Moraine's tax levy rate?
The Kettle Moraine School Board has always worked to maintain a stable tax rate. The average tax rate over the past 20 years has been $9.79. The current tax rate of $9.63, and the proposed $9.78 tax rate, are both below the 20-year average.
Why are KM taxpayers bearing the brunt of funding our schools instead of the state?
The state's equalization aid formula is designed to fund schools porportionately, based on a community's wealth, as measured by property value per student. As a result of KM's property value, the state has assigned the majority of responsibility to local taxpayers. The chart below illustrates the 66 percent decline in state equalization aid provided to KM.
Is a local referendum more efficient than state-wide taxes in keeping local taxpayer dollars in KM?
Yes, with our local referendum, 100 percent of the tax impact remains in the district. Income and sales taxes are paid into the state of Wisconsin and returned to school districts through equalization aid. Kettle Moraine School District only receives $0.19 of every dollar paid in state income tax. This referendum provides a local solution that allows KM taxpayers to direct support solely to KM schools.
Why does the assessed mill rate on my tax bill not match with the district's (and Department of Public Instruction) published mill rate?
The Kettle Moraine School District establishes an annual tax levy. That levy is then distributed on an equalized value (Fair Market Value) basis between the 10 municipalities within the School District. The distribution is not determined by the School District but rather by the Wisconsin Department of Revenue. Because municipalities reassess their properties in different cycles, the state uses "equalized value" as a way of distributing the taxes. Once municipalities receive their portion of the tax from their school district, they then divide that total tax by their total assessed value, and come up with a tax rate that each individual taxpayer pays. There is sometimes a gap between the "assessed value" and "equalized value" in a municipality which accounts for why the mill rates are expressed differently.While some Kettle Moraine taxpayers might see an increase in their individual taxes this year, other taxpayers will see a decrease. The average property tax increase for Kettle Moraine taxpayers in FY 2019-20 is less than one percent (0.2%). If not for increased property taxes for the Wisconsin Parental Choice Program, there would be zero increase. Because of the changes in fair market value/assessed value between municipalities, the Village of Dousman, the Town of Ottawa, and the Town of Eagle are paying more of the total Kettle Moraine School District levy in FY 2019-20. The Village of Wales, the Town of Delafield, and the Town of Genese are paying less. This is not the result of district action, but this is because equalized (fair market values) in Dousman, Ottawa, and Eagle grew faster than the district as a whole. Wales, Delafield, and Genese grew more slowly than the district as a whole, as a result, "who pays" shifted within the community.
If equalized (fair market values) in Wales, Delafield, and Genesee grows faster than the rest of the district in 20-21, and Dousman, Ottawa, and Eagle grow slower, a tax shift will occur in the opposite direction next year with Dousman, Ottawa, and Eagle experiencing a tax decrease, even with the same levy proposed by the Kettle Moraine School District.
What will the operating referendum fund?
Pay electric bills. Heat and cool buildings. Pay our staff. Transport students to and from school. Provide health insurance. Fund sports and extra-curricular activities. Operating referendums are utilized for operating expenses. They are not used to incur debt.
What will happen if the referendum fails?
A failed referendum will force KM to make $1.7 million in cuts to balance its 2020-2021 budget. Those cuts will come from several areas:
NOTE: KMSD hosted KM Budget Forums, which gave community input into the 2020-21 cuts. The forums were open to the public and were held:
- March 2 at Brandybrook Community Center: 9:30 - 11:30 a.m.
- March 3 at Kettle Moraine High School auditorium: 4 - 5:30 p.m.
- March 5 at Kettle Moraine High School auditorium: 6 - 8 p.m.
What were the results of the 2019 Operating Referendum?
How often has Kettle Moraine School District asked taxpayers for operating funds via referenda since revenue limits were established in 1993?
The district asked the community for support in 2001, which was supported. The district asked for support in 2019, which was not supported.
What was cut for the 2019-20 school year budget?
KM made $1.9 million in reductions to balance the 2019-20 budget. Those cuts included:
– 8.7 teaching positions
– Restructuring of administrative positions equaling 2 FTE
– Reduction of administrative support positions
– Restructuring of nursing services
– Reduction of Library Media Specialist staffing
– Reduction in middle school music program staffing
– Elimination of middle school World Language offerings (German and French)
– Elimination of elementary band and orchestra offerings
– Reductions in department and school building budgets
– Technology budget cuts that delayed replacement cycles for computers
– Transportation budget cuts that require additional walk zones for students
– School building budget cuts will result in fewer school-based supports and supplies
– Increases in fees for families
– Athletic participation fees doubled for high school students
– Parent payments increased in the Technology Partnership Program (program providing computers for middle and high school students)
– Middle school athletics and activities were shifted to fee-based programming in the Community Education Department
What has already been done to manage the budget?
Kettle Moraine School District has worked hard to balance its annual budget and be fiscally responsible. Over the past 14 years, the district has made more than $17 million in budget reductions. The district is no longer able to manage the continuing decline in revenue through the strategies that have been utilized over the past decades. Cost savings have been found through the following:
- Increasing class sizes
- Utilizing multi-age classrooms
- Attracting open enrollment-in to mid-point of class guideline ranges
- Reducing support services to students
- Finding efficiencies in transportation
- Eliminating employee post-employment benefits
- Eliminating step and lane compensation increases
- Reducing operating budgets
- Centralizing support services and eliminating support positions in buildings
- Insurance redesign and competitive bidding processes*
- Shifting costs for benefits to employees*
- Compensating for micro-credentials that align to school/district goals
- Restructuring delivery of learning opportunities
- Increased fees
- Contracting for custodial services
- Reduction in legal fees through staff attorney
- Contracting for substitute staff
- Increased fees
* The most common KM employee health plan has a $10,000 family deductible with limited district reimbursement. The average family plan for other Waukesha County school districts has a $2,400 deductible.
Why is there a need for support?
Several factors have impacted the district’s current financial position. Click here to learn about them.
If KM's enrollment is declining, why is the district going to referendum?
Schools are funded on a per-pupil basis, which reflects the average cost to serve a student. The average cost includes personnel expenses, as well as infrastructure expense. Over the past 10 years, KM has seen a decline in the number of students served by 507 students, spread across 10 schools - an average of 50 per year. As an example, if the district serves 50 fewer students in a given year, that is a decline of one student from every fifth classroom. Moving from 30 to 29 (or 24 to 23) students per class does not reduce our personnel costs, which is the majority of KM's budget. Yet, the revenue loss to our district budget is $500,000. If those 50 students were concentrated in one or two grade levels, it would allow KM to eliminate two certified teaching positions at a savings of approximately $170,000. Yet, the cost to heat, insure, and maintain district buildings will not decrease. In either case, the district's savings do not align with the reduction in revenue.
If KM's enrollment is declining, why doesn't the district right-size staffing?
Reductions in staff, at both building and district levels, in alignment with KM's student population, has occured and will continue to occur. For the 2019-20 year, $467,000 was reduced by aligning resources to enrollment. An additional reduction of $802,500 was made by eliminating positions in order to balance the budget, not justified by decline in enrollment. The district is going to referendum to sustain the funding needed to support the level of education KM community members have come to expect.
If enrollment is declining, why doesn't KM close a school?
Closing Magee - a concept often cited as a cost-savings measure - was studied by the District Sustainability Study Group. The district would save $368,000 in operational expenses while potentially losing $500,000 in open enrollment revenue.
Closing Magee would add to the district's deficit. This concept would require a complete redistricting of elementary attendance boundaries, moving fifth graders into the middle school and eighth graders into the high school. The concept would be disruptive for KM families, potentially increasing open enrollment out. It would also increase transportation costs as students would be transported further distances to their elementary attendance area. The group determined closing Magee would not make financial sense at this time.
How does Open Enrollment affect the district's budget?
Open enrollment students provide the district an additional revenue source, which provides relief to taxpayers. Kettle Moraine is considered a “district of choice” by many parents in surrounding communities.
- 561 students opened enrolled in
- 201 open enrolled out
- KM is 13th in Wisconsin in total Open Enroll "In" students
Open enrollment students have helped fill classes to our class size guidelines and keep our current programming; KM does not hire more staff to accommodate open enrollment students. Because revenue from open enrollment helps keep the tax levy down, the program benefits our taxpayers.
Why Doesn't KM Reduce Administration Costs?
Kettle Moraine has reduced administration costs for two consecutive years and has the second-lowest administrative spending of the 19 districts in Waukesha County. Compared to districts of similar size, KM spends $712,128 less on administration each year. The district has historically had a lean administrative team, and 2019-20 is no different. According to the Department of Public Instruction’s Comparative Cost Data for 2017-18, the district had the 34th-lowest administrative spending out of 421 school districts on a per-pupil basis. This places the district squarely in the lowest 10% of the state in spending on school administration as defined by the Department of Public Instruction. In the two subsequent years, the district has continued to make cuts in administration, reducing administration costs annually by $224,714.
How does the compensation of Dr. Deklotz and Dr. Ewald affect KM's budget?
Dr. Deklotz received a 8.73 percent salary adjustment in 2016-17 as the result of her earning her PhD, and being named the State Superintendent of the Year. Since 2016-17, she received a three percent increase in 2017-18, a 2.13 percent CPI raise in 2018-19, and took a voluntary pay freeze and reduction in benefits for 2019-20.
Dr. Ewald’s salary over the past four years has changed from $130,000 in 2015-16 to $131,475 in 2019-20.
Increases in benefits (fringe) have been tied to the increases in healthcare. Administrators, teachers, and support staff who qualify for benefits, receive the same health plan and the same district contribution.
Does the district pay advocates and/or a firm to post positive messages online regarding Kettle Moraine schools to affect the April 7, 2020 referendum?
Unbelievably, KM has seen this accusation. No, KM does not pay for advocacy. Many people are simply proud of KM and passionate about sharing facts and THEIR opinions.
How do Kettle Moraine's charter schools affect the district's budget?
The four KM campus-based charter schools contribute in a financially positive way. The revenue generated (per student) for open-enrollment students in the District's Charter Schools exceeds the average (per student) marginal cost in those programs. As a result, the district generates some modest "net revenue" which increases KMSD's economies of scale and helps distribute our district's fixed costs over a larger number of students that otherwise would be distributed over a smaller group of students.
What can be done about the state’s school funding formula?
The Kettle Moraine school board has been advocating for a change in the school funding formula for over a decade and will continue to do so. In 2018, Superintendent Deklotz held community conversations on school funding and several Kettle Moraine parents and taxpayers testified before the Blue Ribbon Commission on School Funding about the inequities in the formula. The district will continue conversations with legislators on this topic. Resources related to this topic:
- Blue Ribbon Commission on School Funding
- Wisconsin Department of Public Instruction - School Funding Reform
- District Sustainability Study
If the state fixes current issues with the funding formula, are there provisions in this referendum to reverse the imposed tax?
Yes, the referendum question asks voters to grant revenue limit authority to the Board of Education, but that does not mean the Board is required to exercise that authority. Many Wisconsin communities, who have passed referendums, have “under levied” when the revenue available to them exceeds the amount needed to operate. The School District of Hudson is a good example.
KM's 2020 referendum does not require the district to use the entire authority each year. It allows up to that authority. A budget is drafted each year, approved by the board and presented to the community at the district's Annual Meeting. The community then approves or modifies the levy supporting the budget.
What did the 2014 referendum cover?
Prior to 2014, the District’s Master Facilities Planning Process identified $85 million in facility and technology needs. A community survey informed the school board in pursuing a referendum of $49.6 million to fund projects related to safety and security, capital maintenance, technology infrastructure and learning space renovations. The community approved that referendum, and our schools and community greatly benefited from the support.
Examples of projects that were not included in the 2014 referendum scope include outdoor facility maintenance projects and technical education / STEM (Science, Technology, Engineering & Math) spaces.
What does KM owe from the 2014 referendum?
KM owes $38,735,000 from the 2014 facility referendum. Like most school district and municipal projects, the capital improvements are amortized over 20 years. The original debt retirement date was April, 2035. Similar to a household pre-paying their mortgage, KM has budgeted in a fiscally-conservative manner, which is projected to allow the district to retire all currently-existing debt by April, 2032. This will save the district millions of dollars. The district has been able to accomplish this while reducing the tax rate for four consecutive years.
The district has a debt capacity of $390 million, as is set by state statute. Kettle Moraine utilizes 9.91 percent of the debt capacity allowed by statute. The district's bond rating of AA2 is one of the best in the state of Wisconsin.
Will the operating referendum fund facility projects?
Operating referendums are utilized for operating expenses. A portion of the annual operating budget funds capital maintenance and/or infrastructure needs. Every year, the amount budgeted for capital maintenance and/or infrastructure needs is shared with the public and approved at the annual meeting.
How do I learn more?
School district leaders are committed to sharing information and answering questions in any way that is convenient for you.
- Attend an Information Session - click here for dates, times and locations.
- Call Superintendent Pat Deklotz at 262-968-6300 ext. 5301
- Stop by Superintendent “Open Door” Thursdays, 3-5 p.m. 563 A J Allen Circle Wales (Please call ahead for an appointment)