Elmbrook Budget Would Cut Spending, Taxing But Could Boost Fees

The Elmbrook School District would collect about $6.1 million less in property taxes for the 2011-12 school year, a move the superintendent called "unprecedented" and prompted by "the new normal."

General fund spending would decrease by nearly $6.8 million, or 7.9 percent, largely due to the district shifting pension and health costs to its employees, reducing its teaching staff by 30 full-time equivalents and slightly increasing class sizes, Superintendent Matt Gibson said.

"I've never presented anything like this before," Gibson said of the cuts to spending and taxing. "It's usually been an increase. We always hope that the increase will be less than the cost of living."

But lunch prices will rise by 10 cents and families could see fees increase for activities and extracurriculars, under the budget Gibson presented last week to the School Board.

The unusual changes are prompted by Gov. Scott Walker's state biennial budget proposal to lower school districts' per-pupil revenue caps by 5.5 percent, after years of raising the caps by 2 percent annually. For Elmbrook, that means cutting property taxes, because the district receives little state aid due to its high property values.

Under Walker's proposal, Elmbrook could collect $647 less revenue per student. And Elmbrook will have fewer students for which it can collect revenue, with total enrollment projected to decrease by 95 students next fall.

To offset the revenue cap cut plus proposed cuts of more than $800 million in state aid to schools, Walker championed sweeping changes to not only require teachers and most public employees to pay more toward their health and pension plans, but also to eliminate collective bargaining except for inflation-capped raises, end state collection of public employee union dues and require annual elections to keep unions in business.

"I came out in favor of the budget repair bill because of its cost reduction potential, not its collective bargaining impacts," Gibson said.

"Our long-term budget is much better off as a result of the budget repair bill," he added.

Elmbrook had an existing deficit for next year of nearly $3 million. That grew to $8 million with the revenue cap cut. The budget repair bill saved Elmbrook about $3.8 million, leaving Gibson and his team to find another $4.2 million in cuts.

He proposed $4.6 million in cuts to give the School Board some room to decide what cuts it wanted to implement. The board will review Gibson's budget in greater detail at its May meetings and hopes to approve the budget June 14. 

"The budget is really largely being balanced this year by the employees," Gibson said. With 5.8 percent pension contributions and likely higher health insurance premiums after contracts expire June 30, employees will take an "up to 10 percent hit" on their paychecks, Gibson said.

"I just want to thank them because that is a lot to happen in one year, whether it's private sector or public sector," he said.

Gibson said he hoped to make "the new normal.... the best normal that we possibly can." 

The other big savings in the budget came from:

• Cutting the district's teaching staff by 30 full-time equivalents, due to declining enrollment and retirements of about 50 employees. 

In music, for example, three employees are retiring.

"We're not replacing all of that, but yet we're covering all the (music) programs and services that we currently have," Gibson said.

For specialized courses that draw few students at each high school, Elmbrook might schedule the course at one high school instead of both, and have students travel to the other during the school day to attend the class. It's possible the schools' parking lot supervisor could transport the students in a district van.

"With 90 minute classes, it's much more doable than in our prior schedule," Gibson said.

• Increasing class sizes. "We didn't want that, but when you're cutting a budget by $4.2 million, it's hard to avoid that," Gibson said. "It's not dramatic increases in class sizes, but I think it's something we need to watch."

According to a memo by Christine Hedstrom, assistant superintendent for human resources, class sizes would rise from 22 to 24 at elementary schools, from 27 to 28 in middle school houses and from 24 to 25.5 at the high schools.

Other changes in Gibson's budget include a smaller than normal contribution for capital improvement and maintenance costs, and a $400,000 set-aside for current employees' future retirement costs, rather than the $500,000 funded in recent years.

Elmbrook also is considering switching from a defined retirement benefit plan to a defined contribution plan, said Keith Brightman, assistant superintendent for finance and operations. The district would set aside certain dollars for retirement of future employees and "what those dollars would pay for is what the employees would get" rather than a guaranteed benefit level.

Brightman said the Elmbrook's long-term strategic planning was critical in Moody's recent decision to upgrade the district's bond rating to Aaa, which lowers future borrowing interest costs.

Below are charts showing Elmbrook's major revenues and expenditures, and proposed changes to them for the 2011-12 school year.