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Nicolet cutting costs after governor's budget comes in at zero

Utilities, health care keep going up; projects take $300,000 off the top

Feb. 27, 2013

Glendale - Like many districts around the state, Nicolet was hoping for Gov. Scott Walker's 2013-15 budget proposal to include an increase in the revenue limit which controls how much districts can take in via local tax levy and state aid.

State Superintendent Tony Evers had petitioned Madison for a revenue limit increase to the tune of about $200-250 per student, which would help ease the belt-tightening around the state after the 2011-13 state budget first cut the overall revenue limit by 5.5 percent in the 2011-12 school year and included a modest increase for the current year. To Nicolet, that meant a decrease in its per pupil revenue limit by $847 per student in the 2011-12 year and a $50 increase in the 2012-13 year.

Walker's recent 2013-15 budget proposal, to the dismay of Nicolet administrators and the School Board, holds the revenue limit flat over the next two years.

The prospect of no new money, combined with declining enrollment and increased operating costs, means the district will start cost cutting to fund upcoming capital projects and mitigate inflation.

Business Manager Jeff Dellutri told the School Board on Monday that the district will present a list of potential cuts along with a draft 2013-14 budget to the board in mid-May.

"It's a challenge," Dellutri said of the budgeting process, and as a result of the flat revenue limit, "some things are going to go up, so other things have to go down."

Costs on the horizon

Dellutri estimates the district to pay about $300,000 annually for 10 years to pay down debt on a stormwater overhaul and expanded special education center, necessitating cuts over that period. The price tag of the two projects combined is an estimated $2.5 million, though costs could fluctuate when the district goes out to bid for the work.

"You're going to have to cut $300,000 right off the bat," Dellutri told the board.

Board member Joseph Kasle pointed out that the district will need to continue cutting after that, since zero increase in revenue limit from the state doesn't keep pace with inflation.

"It's one thing to say zero. In reality our electricity goes up … everything goes up," Kasle said. "So how do we measure such things, and say it isn't really going to be zero, it's going to be (some negative amount)? Our revenue stays the same but our expenses don't."

Dellutri said a safe guess of yearly increase in transportation cost is around 3 percent, utility costs increase by an amount that's difficult to estimate, and health insurance and dental typically increase as well.

The board and administration have been contemplating several new budget items as well, including security improvements and a full-time guidance counselor who would work with students and court prestigious universities on behalf of applying Nicolet grads.

The draft budget presented in May will show a clearer picture of future costs, potential cuts, and the fate of any new programs.

"What we need to do is sit down and prioritize what we want to do," Superintendent Rick Monroe said.

Sources of revenue?

Board member Morton Grodsky asked what sources of additional revenue the district could explore.

Dellutri's projections show the district dipping into its reserves over the next three years to sustain the budget, though the district's fund balance should remain more than 25 percent of the overall budget, per board policy. Monroe commented that the district will likely seek a continuation of its $2.1 million annual operational referendum which was passed in 2011 and is effective through the 2015-16 year.

The district will increase student fees as time goes on, Dellutri said, but the district's best bet is to increase enrollment.

Historical data and projections presented by Dellutri show a decline in enrollment over the last three years and an expected decline through the next three.

He said more students, and therefore more funding from the state and local taxpayers, are the surest sources of funding.

"Your time is probably better spent trying to attract students here," Dellutri said.

Monroe commented that the district is considering new ways to bolster enrollment, and that his strategy has been to work with Nicolet's feeder districts and the surrounding area to increase the district's visibility and create a feeling of community.

"We're developing a sense that Nicolet is a choice school," he said.

BY THE NUMBERS

0

percent increase in state-mandated revenue limit in Gov. Scott Walker's proposed biennial budget

$300,000

starting point for budget reductions going into the 2013-14 school year

3

years left before Nicolet's operational referendum runs out, at which point the district would need to resort to further cuts and use of reserves

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