Q&A: The Unit 5 referendum unpacked
Unit 5 is asking voters for more taxing authority while promising the total property tax rate would fall. The Unit 5 school board has decided to ask voters for $20.5 million more property tax dollars for its education fund.
Superintendent Kristen Weikle and Unit 5 business manager Marty Hickman said Unit 5 would not apply the 88-cent rate increase all at once.
Weikle and Hickman said in a WGLT interview on Thursday that the district would wait until building bonds are paid off and working cash fund bonds are paid off before fully implementing the education fund tax increase. They said the switch would actually leave the district with a lower total tax rate than it has now.
This proposed tax rate swap follows a line of thought first articulated in 2018 by then-superintendent Mark Daniel as a way to reduce the impact on taxpayers.
The dollar amount raised would likely change as property values continue to grow even before the rate is implemented.
To frame the referendum proposal, here are some numbers:
- The money raised by the proposed rate increase would be 10.21% of the entire Unit 5 operating budget.
- Unit 5's current total property tax rate is $5.61 per $100 of equalized assessed value (EAV). Hickman said under the proposal, the total tax rate for the district would be $5, or $0.60 lower, per $100 of assessed value.
- The total property tax rate for Unit 5 would drop 20%.
- The increase in the education fund rate would be 32.35%.
- Total education fund revenue would rise from the current $63,176,000 to $83,615,000 after the referendum.
Building bonds start falling off in levy year 2024. That is the school district’s 2025-26 budget year.
Following is the interview with Weikle and Hickman lightly edited for clarity and brevity. The school officials laid out how they settled on 88 cents and $20.5 million.
Weikle: When we looked at feedback we gathered from community engagement, in-person meetings, paper or electronic surveys or phone surveys, the community shared with us what option they wanted and would best support. It was the middle of the road option. If at all possible, we did not want to increase the overall tax rate that Unit 5 was applying to the taxpayers. This is actually going to be a lower tax rate. Coming to that number allows us to do what the feedback was — maintain that base of services we provide, and add some, such as lowering class size and add opportunities that we provide students. We needed to look at what a change would allow us to do for at least 10 years out and not just the next few years.
WGLT: Is this breaking an implicit promise made to voters in the last referendum that the money raised then would be sufficient to operate the district? Regardless of everything that's happened since, wasn't that promise made?
Weikle: I was not here. So, I can't speak to that.
WGLT: Isn't that what referendums usually are, though? A promise to be able to operate?
Weikle: I don't think so. My understanding is around that same time period we built multiple new buildings to house the influx of kids in the community. It is probably not realistic to think that a 10-cent increase from a 1982-83 figure would forever allow us to operate a district.
WGLT: Some would argue, though, that the growth in the community since then has not matched those projections made when that last referendum passed and so you shouldn’t need it. What's the response to that?
Hickman: I think up until the last couple of years, the growth did match. We had very high growth up until the last couple of years. There are some things State Farm did that started a little bit of a decrease and then of course, the COVID. Outside of the last couple of years, we were high growth.
WGLT: Here's another argument likely to be made, that the state is not meeting its obligations as defined under the school funding formula for adequacy. Why should local taxpayers foot the bill for what the state should be doing?
Weikle: The state's evidence-based funding formula does have an adequacy target. That target also says, we are not pulling in the revenue that we should locally to support our schools. That affects the dollar amount that we get from the state.
WGLT: If this doesn't pass, what does the school district look like?
Weikle: That's really a question the board is going to have to answer. We do have working cash to help us for the next couple of years. That's not a long-term solution. If it doesn't pass, the board would need to assess the election results and make a decision on what to do and direct the admin to move forward.
WGLT: When they go for referenda, school districts often define what will happen if it does not pass as a signal to voters that this is what's at stake. Do you plan to do that? Do you plan to say we're going to propose that we cut X numbers of teachers, X numbers of sports, X numbers of enrichment offerings, and this is how to make the budget balance if this doesn't pass?
Weikle: The board will have to decide if they want to put something like that out there. I've worked in districts which have done that during (a) referendum. It usually doesn't do anyone any favors. It makes people worried and makes some people mad. We did make around $2 million worth of cuts last year. We did make reductions. This board has been willing to do that. I can't say, though, if that's the direction they're gonna go or not.
WGLT: Even before the board approved going to voters to ask for more support, there was a theme bubbling up in the community that administrative costs for Unit 5 have grown out of proportion since the last referendum to the rest of the district. Would you respond to that allegation?
Weikle: I don't think that's accurate. We have one of the highest student-to-administrator ratios compared to other districts. That's less admin to support students when there are challenges. It's less admin to support families when they have concerns and less admin to support our staff when they need assistance. It definitely puts a strain on the district. We are very thin administratively compared to a lot of other large districts.
WGLT: Enlarge on that, would you? Come up with some apples to apples. What do you mean by one of the lowest?
Weikle: I'll use our special education administrators as an example. We have four special education administrators for over 12,000 students. That's a lot of students per one special-ed administrator. When I look in our curriculum department, we have one curriculum director for 17 K-5 elementary schools. We have one curriculum director for grades 6-12. That's it?
WGLT: What's usual?
Weikle: Usually they would have at least two to five, sometimes more. We have one director of special education. A lot of districts our size might have an assistant director. What I can say is, we've lost some administrators to other districts who pay a whole lot more money than we do. And we've had people turn us down to come here, because we don't pay enough.
WGLT: Why go for referendum now? It's a general election in a year that is likely to draw a high turnout of voters who have traditionally thought they were, as the saying goes, ‘Taxed Enough Already.’
Weikle: We took the feedback from those community engagement sessions. The feedback from a wide demographic was there is quite a bit of support to go (for a referendum) at this at this point in time. We're really at a critical point. In a school district, you can't just not look ahead to future years. While we have a couple of years of working cash money, we wouldn't be doing our jobs very well if we weren't looking at three years down the road. For levy year '22, we're not going to start to receive any of that money, half of it in the following year, '23, and the other half in '24. We do have to plan well in advance.
WGLT: Many times referendum campaigns take more than a year to develop to adequately educate the voters. You've been doing community engagement for some time, but not actually making a referendum campaign case. Do you have enough time to do the job adequately?
Weikle: I understand there wasn't a lot of time at the last referendum to campaign (it passed.) Our job (as the administration) will be to provide factual information. We won't be able to campaign and encourage someone to vote for or against. We'll just be providing factual information.
WGLT: That last time, then new superintendent Gary Niehaus, who came in in the middle of the campaign, said going for that referendum so quickly was a risk. How big a risk do you think this is?
Weikle: Anytime you take a question to taxpayers there's a risk involved because you just don't know who's going to show up to vote. You don't always know how they're going to vote. There will be some that will always vote yes and support schools. There are always going to be some people that vote no. Ultimately, it is up to the board to decide when to take this question to taxpayers. Based on the feedback through the engagement process, it really did lead us to believe that the board should at least consider asking the taxpayers. Working cash is not a long-term solution. We're looking for ways we can provide stability and the best education to students in Unit 5. By taking a question to the taxpayers it allows that opportunity to occur. Secondly, I hope the community really takes the time to listen and learn about factual information so they can make an informed decision.
WGLT: Does this balance the budget? Will there remain a small structural imbalance if it passes?
Weikle: We're only talking about the education fund with this. This would help us keep that base of opportunities and options we're providing to students, as well as add some additional things, either back or on, which is what the feedback was.
WGLT: I didn't hear yes there.
Weikle: This year we're anticipating an $11 million deficit. If we have this, yes, this would take care of that deficit in the education fund. Again, I can't say forever and a day that will always be the case. We feel this would help us for at least the next 10 years. A lot of variables could change, right? The state could change their funding formula. The EAV could either increase drastically or decrease drastically. You've got contracts that are going to change. But we do feel comfortable for at least the next 10 years, this would help with that deficit.
WGLT: Please respond to this line of thought. OK, you've made a case that something needs to happen. But why do you need to add anything on to the taxpayers' back? Can't you just close the hole and not improve the student-to-teacher ratio, but just stay with what you have because the school district is doing fine as is?
Weikle: Again, the community engagement was to hear what our community wanted, a diverse, widespread group. Some people who have kids in the district and some people who don't have children in school anymore responded to those surveys. This is what they said they wanted. So, that that's what we were doing,
WGLT: Will that rate swap, in effect, from bonding for buildings and the working cash tax bonds, to operating tax rate, handicap the district's ability to meet future needs for facilities? Wouldn’t it be tough to convince voters to pass a new building referendum because they've already in essence, traded tax rates?
Hickman: The answer is the tax rate will be lower. If there was growth in the community and we needed some sort of a building referendum, there's still room there to come back up and still be at the tax rate that we have today.
Addendum: Unit 5 said another factor that has changed in the years since the last referendum is a marked increase in unfunded state mandates.