Hudson School District Awash In Taxpayer Funds
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Over $1 million dollars…
Question: What was the amount of over-taxation for fiscal year ended June 30th, 2005 in the Hudson School District?
Next Question: Where’s my rebate check?
A limited review of the recently released audited financial statements of the Hudson School District contains an interesting line item on pages 16 of the 47 page document.
The total fund balance is now in excess of 20 million dollars. Furthermore, excess revenues over expenditures (read, overtaxation) was just over a cool $1 million. Folks, you have been overtaxed for several years now and the fund balance of this district is now in excess of $20 million dollars…. You don’t suppose this crowd is anticipating a large purchase anytime soon do you? Net assets are at $27 million.
Also, there is a shifting of money from the general fund to the special ed fund of approximately 4 million. Total expenditures in the special ed fund (approx $6.5 million) constitute slightly more than 1/8 of the total district expenditures (almost 14%). One wonders, with payroll of around 5 million in special ed (roughly 77%), why not just fund the special ed fund with revenue from the get go and not have to make this interfund transfer, it creates the appearance that special ed is underfunded, with no where near enough being budgeted. But perhaps there is something else going on here…
Two points should be made here, first of all there is absolutely no reason why this district could not institute local levy educational credits – tomorrow afternoon. Secondly, there is clearly no reason why any referendum should be proposed as this district is awash in excess taxpayer money.
Lastly, for administration officials to claim that they are being fiscally responsible by not levying to the maximum is lame – the financials clearly shows that they overtaxed the citizens by over $1 million. Had they levied to the max it would have been an overtaxation of $2.5 million!
All of this while spending an average somewhere in the neighborhood of $10,500 per pupil (more or less, depending upon whom you ask) – amazing. Comments regarding fiscal responsibility by administration officials are meant to distract you from seeing the $1 million of overtaxation and the fact that Hudson is awash in taxpayer money.
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Like an airline flying with full airplanes, a school district operating with schools near capacity sees a financial efficiency. By contrast an airline flying big new planes only half full will lose money. And a district with over-built school capacity will need to cut curriculum (see River Falls district’s recent post-construction financial problems.) Hudson is runnning at about 95% capacity because the taxpayers denied their request to build enough new buildings to put them at about 70% capacity.
Another large factor in play here is the “use it or lose it” aspect to the Wisconsin revenue limits. Hudson could have levied for a much lower amount in each of the last several years. That would have permanently restricted their ability to levy for a larger amount later without getting voter approval through referendum, something no school board relishes. The revenue limits increase each year by about $200 per student. A growing district is allowed to levy more per student while they may actually see a lower cost per student as the district nears capacity on the school buildings. This leads to a surplus condition. But the revenue limits are sort of like if an individual had a credit card that had a $5000 limit this year and increased by $200 every year, but the increase only happened if the entire $5000 was used the year before. If instead only $4,500 was used, then the following year the limit could only be increased by $200, up to $4,700. If the max was used that year, then the limit could go up again the next year by $200 to $4900. But the district’s limit was permanently reduced by taking less than the max in that one year. This drives the increasing fund balance to increase just as if the individual chose to draw their entire credit line each year and put some away in a savings account. By doing so they get to take the money from the taxpayers, bank it, retain the right to tax again next year at an increased amount, without having to go to referendum to tax at that higher amount.
Before the current climate of taxpayer watchdogs arose, school districts typically found “projects” on which to spend the extra funds. Hudson’s included adding irrigation to lawns, proposals to air condition schools, etc. But once the watchdogs got on their case they really had only one option left. Bank the money. Before long the watchdogs got on their case about the size of the surplus funds. Don’t expect them to levy much less. Do expect to see the majority of this fund balance be used eventually to build new schools.