Yeah, I knew it was coming.
The timeline threw me.
I knew that he was going to try and bust the state unions, because that was pretty well
known.
My assumption was he would do the fake negotiations with the unions for a while and then say,
they won't negotiate.
Now, I have no other choice because they have that no contract going that failed at the
end of the prior term.
And so I thought he would do some fake negotiations for a few months and then tie it into the
actual budget.
But instead, he just went right for the jugular to begin with.
Zach, I am rolling whenever you're running.
All right.
So you can just talk to me.
Okay.
I don't want the rest of everything here.
I guess let's start a couple of years back.
Take me through this process to get to here and the referenda that Fort Atkinson has gone
through and then how you came to this one.
Sure.
Fort Atkinson has had a number of operational referendums over the years and the community
has supported them in different iterations over the course of those many, many years.
And then two years ago was the first time that the community rejected the operational
referendum.
And in that effort, we made it clear that the needs weren't going to change and that
we would need to come back again, which we did last April.
In last April, we were really clear with the community that if the referendum wasn't
successful, there would need to be significant changes to the district in order to get through
another school year before we would come back yet again for an operational referendum because
of course, the needs aren't changing.
So last spring, we failed the operational referendum somewhat significantly and it was
really perhaps the first time that we really gave pause to things that really changed.
And while we believe the community was very supportive of schools and public schools here
in Fort Atkinson, it really became a referendum on the last property tax cycle.
And no matter what stories we were telling or context we were giving or explanations
we were providing, it really came down to what people had to write a check for just
a couple of months before in property taxes.
So with the failure of that referendum, we cut $3.3 million within a month, which resulted
in a number of layoffs of positions that were filled with people who weren't interested
in leaving the school district, as well as taking advantage of an early retirement incentive.
We also didn't fill positions that were vacant through attrition and the list goes
on.
But within very short order, we cut that $3.3 million which got us into this school year
and as promised, we're back.
We regrouped a little bit based on what we felt was a community survey in the form of
a referendum vote last spring to regroup and change things up a little bit in this effort
that we have coming up in a couple of weeks.
Do you think people understood or could feel the impact?
Obviously within the school district, I'm sure the impact was quite obvious.
But beyond that, one of the problems that school districts have had over the decades
when it comes to these issues is they say, we're going to have to make these cuts, but
then they turn on and also say, we're doing the best we can to provide everything we can
for your child and not make anyone notice that we make all these cuts.
So it's interesting, last year our effort included, we attempted to provide some scale
as to what the numbers meant.
I mean, I think we're always battling a sense of enumerancy when we're talking millions
of dollars.
That's hard for people to contextualize.
So we provided some context as to the equivalent of this in reductions would be A, B, or C.
The first time we did that, so as much as people were anxious for us to illustrate what that
would mean, we got a lot of negative feedback that we were trying to use scare tactics.
So we're always trying to provide people accurate and factual information and represent it properly,
but it's very difficult to help people understand what that might be.
So upon making $3.3 million of cuts, people very quickly realized what that would mean.
So one of the things that we did is through those reductions really tried to preserve
student programming, student activities, and the student experience, and instead looked
at how is it that we right-sized the staff to some of our declining enrollment and take
full advantage of how do we use this position moving forward as opposed to making reductions
only to bring those things back to the district.
That's not the case for us.
So we've really tried to be clear with the public that while we didn't necessarily like
what we had to do last spring, we tried to use it to our long-term advantage and their
long-term tax advantage to the best of our ability.
In the 2021 state budget, Republicans in the legislature gave a $0 per pupil increase,
and at the time they said school districts have all these federal funds coming in for
the ESSER dollars, we don't need to give them any additional state dollars.
Is there a straight line from that decision to where school districts are today with the
large amount of operational referenda and the fiscal cliffs that districts are facing,
or is it unfair to single that era out versus the entire last two decades?
I think ESSER funds in general were characterized as a fix to school funding issues, and if
anything, they were a short-term remedy that helped districts get through a year or two,
which of course, as we know, diverted those funds from COVID-related needs, which was
their original intention.
So for us, it absolutely did not change the long-term financial need of the district,
but we are also very careful not to add a number of positions with those funds so that
it would not exacerbate or make our fiscal cliff even higher, which is where I think
some districts are facing a bigger need now than they would have been in the past.
So when you talk to other district administrators around the state, pretty much everyone in
the same boat, are there disparities between how desperate the need is in various different-sized
school districts?
My sense last spring when we were unsuccessful in our attempt in hearing from a number of
different district administrators was that we're one year away from where you are.
And so my sense, just anecdotally, is this spring, or certainly with the next November
election cycle that districts who aren't successful are going to be looking at significant reductions.
And for most districts, just giving that the majority of our budget is related to staff
in related expenses, that means downsizing significantly very quickly in order to make
up these large numbers of dollars.
So I think you'll see a number of districts in pretty dire straits very quickly if they're
unsuccessful.
When you look at the voters that are going to be voting in April, this area is represented
by a Republican.
They have voted for conservative legislative government, and those representatives have
then turned around and created the situation that school districts are in.
Is it possible to educate voters as to how we got here without pointing a finger and
saying, hey, your votes elsewhere created this scenario?
I think we've worked hard to be as apolitical as possible.
And it's not to our benefit to align one way or the other, but certainly the dichotomy
societally is not playing to our favor.
So it's difficult to talk about complex financial issues with people anyway, but then when you
have to work from the premise that they already have a preconceived notion that we are politically
motivated or that we're responding to what we did or didn't get from Madison is a hurdle
that can get pretty tall pretty quickly.
Another piece of this that I believe is relatively new, certainly for us, but I know of other
districts as well, is the uptick in municipal referendums.
And so in our case, we had the city pass a safety referendum a couple of years ago,
which had an impact to people's tax bill.
And I know in another municipality nearby, the same thing happened.
So I think there's a bit of referendum fatigue, and it's equated to a larger tax bill in many
cases.
You know, it's complicated when we get into school finance, but then when people try to
compare it to municipal finance, that's equally complicated, but in a very different way.
It really promotes the idea that we're not always being transparent, or we're not always
being clear, or that if people can't do the math on a tax bill that we're hiding something,
and those complexities really make it hard for us to tell a story that people understand
and are willing to accept, even though it's very, very factual.
Once again, those municipal referenda come right back around to state funding, or under
funding of municipal government.
Yeah, and we've had greater flexibility to my understanding with referenda than the municipal
governments have in the past.
And so the systems, while connected and related, operate significantly differently.
And so now it feels like people are paying a little more attention to how municipal budgets
and funding systems work, where the focus had been on schools for many, many years.
So walk me through what you saw last night, or what you heard last night, in terms of
the questions and the response you got in the forum.
Yeah, so we've built this effort this spring on pivoting.
So as we've gotten questions, we've been very quick to offer answers, and really trying
to be as concise as possible, and responding to what we're hearing and seeing from whatever
outlet.
So last night, I was very happy to see some people turn out, and I was very happy to see
some people ask some questions, and then stick with their questions when they weren't quite
getting the answer that maybe was helping them fully understand what was being discussed
or talked about.
So I felt like that was a great example of how those public sessions would have been
in the past, where they haven't been as much in the last few years.
And really, it was very clear to us that even in our best efforts to be as simple or to
be as concrete as possible when talking about school finance, it's still very, very difficult
for people to understand how all of that works.
You can't change all of the language and still provide a concrete example or a concrete understanding
of how school finance works.
I guess this is the question you're trying to figure out, but how do you explain to people
something you basically need in economics to agree to understand when their understanding
of budgets is like kitchen table, checkbook, economy versus the complicated rubric as
state government about pools of money and allocations and how you can transfer funds.
So one of the issues that comes up every year in December and January is people getting
their tax bill and trying to understand how you couldn't take the tax levy rate and divide
that into the amount of taxes and get the numbers and those types of things.
So as an example, schools use equalized value and municipalities use assessed value.
So right there, people start with the idea that either the city or the municipality or
the district isn't telling the story or that those numbers should be able to add up the
way that they feel they should.
So it continues to be a story that's very hard to tell.
And of course, when it's tied to someone's checkbook, there's a fair amount of emotion
related to that as well.
So we were very careful in the board was due to fall last spring and we actually saw a
decrease to our levy rate this year and people saw a minus sign on their tax bills because
with property values fluctuating as much as they have in the last two years through no
fault of our own, people did see an increase in taxes.
When you look at, I guess let's start with this, explain diffeasance and then how do
you explain it to the public so they understand what you've been able to do.
So our community was gracious in supporting a $22 million referendum two years ago of
which were embarking on the work now in earnest.
And with that debt, the board had the ability to keep the tax levy rate somewhat stable
from last year to this year and with the operational referendum failing, they, in keeping
that rate at that level, created the opportunity to defuse or prepaid debt.
So in our case, they prepaid $7 million of the $22 million in bonds in under statute.
That's one of the things that they can do.
But those funds cannot be used for operations.
So the idea of diffeasance or prepaying debt is difficult for people to understand.
But it definitely is a strategy that is a long-term benefit to the taxpayer.
In our case, it equates to around $3.4 million in savings of interest over the term of those
20-year bonds.
And the other piece, and in some cases, people are challenging us and saying, well, the board
could have just let that tax levy rate drop.
Which is true.
They could have.
Their decision-making was to do as I just described.
But also in acknowledging that the state calculation for state aid is based on an averaging of
years in how much districts spend.
So had they let that tax levy rate drop, it would have impacted our state aid after next
year.
So there's a lot more to those types of strategies or decisions that boards are making than
a quick answer that some people would offer is, well, why didn't you just do this?
Or why didn't you just do that?
So while complicated, I think very beneficial to the long-term financial stability of our
school district.
Representative Johnson described it as manipulating.
And there was some pushback on whether that word is appropriate.
But there's a psychology that comes with, if you can tell people you can pass this and
your taxes won't go up, that makes it easier to say than if your taxes had gone down and
then rise back up to where they were a year ago.
There's just a different impact mentally for whether people will support that.
Absolutely.
So as I just described, in addition to the idea that this isn't a referendum that we
can live without.
So we're forced to create an effort that will hopefully be as successful as possible in
passing a referendum.
And a piece of that is trying not to explain why people should pay more or perceived to
be paying more in taxes after the last year.
So it is somewhat strategic.
So we definitely wouldn't say it's manipulating because it's definitely even at a consumer
level that somebody could do with their own finances.
It's just that we're happening to do it with a very large economy of scale, given that
we're looking at the full school district.
When you look around the state and the number of districts that are at a fiscal cliff that
may or may not be able to pass an operating referendum or maybe a year away from that,
are we only going to see a rise in the use of this methodology to make it so that it
looks like operating referendum come in at a zero dollar tax increase?
Well, I don't know that every district has the same opportunities that we have.
And we didn't happen into the spot that we're in.
I mean, we and our passports have worked really hard to create a stable tax rate.
And then it worked really hard to prepaid debt as they've been able to all along.
So it's not by chance that we're in this place.
It's been fairly constructed over a period of years.
But I think for other districts, if they are not passing an operational referendum, the
only other way they can keep that tax rate stable or where it had been is to prepaid
debt if they have debt.
But of course, when districts run out of debt, that opportunity evaporates as well.
Seems like that would be a good thing to run out of debt.
But if that means that it's more difficult to actually be able to mentally get people
to support an operating referendum in the future, that that actually is a bad thing.
Well, you know, just at a cursory level, when tax rates, of course, came out and then people's
tax bills came out this winter, you look at a number of different districts.
And I know in other parts of the states, I noticed tax levy rates drop very, very significantly.
And when I looked into it a little bit deeper, it's because they also no longer had debt.
So the ability for a board to be strategic or to do long-term financial planning as we've
been talking about becomes really difficult because there are no other choices for them
to have.
And then, of course, when you are looking at doing capital or building type projects,
that's a much different type of referendum effort as well.
So one of the other things is that you are going to referendum on an April ballot that
no longer features a competitive presidential primary, doesn't have any statewide races
of note for the rest of the state superintendent or Supreme Court.
What are you expecting for turnout and how will that impact your success?
Well, I think there were a lot of conversations for districts this, well, late fall, just given
one you need to make decisions about referendum as to whether or not to go in the primary
or April or November.
So it's been interesting to see districts' decisions.
Generally speaking, referenda have been more successful with higher voter turnout, although
in the last election cycle, that wasn't necessarily the case.
So I think there's a little bit of change there that the state is trying to figure out
what that might look like moving forward.
I think we'll have a pretty significant turnout.
I think that this is a topic that is getting a fair amount of community discourse, and
I think our experience last year has definitely helped people understand maybe a little bit
more fully as to what happens when these aren't successful.
Do you think it helps when you can say this isn't just us, that this is something that
the entire state's going through?
You know, I think communities, everything feels intimate to a community, especially a smaller
community, and it feels very insulated in that this is a Fort Atkinson issue or this
is another school district issue.
So we're always trying to provide context to people and help them understand that these
issues transcend our school district and apply to virtually all school districts around
the state.
So if you can get people to have that type of scope, I think it is helpful, but it really
does come down, and especially with the last, you know, shift in property values, it really
pronounced for people that their taxes could look significantly different based not just
on schools, but also municipality efforts as well.
If this doesn't pass, will you be forced to come back in November?
So the board will need to make some decisions about, you know, what does that look like
for us?
You know, what are options for us to get through next year?
Do they look at coming back for an operational referendum in November?
Do they try to wait until the following spring, but those are decisions the board will have
to make.
Anything else that you want to add along these lines?
I don't think so unless there's something that you...
Nope.
I just want to make sure you have the opportunity to say and spell your name and give your title.
Sure.
Is Rob Abbott, R-O-B-A-B-B-O-T-T, and I'm the district administrator.
Alright.
Thank you very much.
That was good.
Yeah, you're back.
So I guess the next step is...