LEAVE IT THERE. THANK YOU VERY MUCH.
>> THANK YOU VERY MUCH. >> JUST BEFORE THE APRIL
ELECTION WE REPORTED ON THE RISE OF SCHOOL DISTRICTS AROUND THE
STATE GOING TO REFERENDUM FOR OPERATING EXPENSES. IN FEBRUARY
AND APRIL VOTERS APPROVE 41 OPERATING REFERENDUM, THE
BIGGEST 250 BILLION A YEAR FOR MILWAUKEE PUBLIC SCHOOLS BUT A
NUMBER OF DISTRICTS FOUND REQUESTS DENIED. THE TWO WE
PROFILED, FORT ATKINSON AND RICHLAND, SAW THEIRS PASSED.
SENIOR POLITICAL REPORTERS AT SCHULZ TELLS US THEY USED THE
SAME METHOD TO MAKE THEIR REFERENDUM LOOK MORE APPEALING
TO VOTERS PROMISING THE TAX INCREASE WOULDN'T COST THEM
ANYTHING. >> IN THE RUNUP TO ELECTION DATE
THE FORT ATKINSON SCHOOL DISTRICT HELD A PUBLIC
INFORMATION SESSION ON THE REFERENDUM.
REFERENDUM PROVIDES THE DISTRICT TO USE FUNDS DIFFERENTLY.
>> THE DISTRICT WAS TELLING VOTERS THE OPERATIONAL
REFERENDUM WOULD LET THEM LEVEE ADDITIONAL 6.5 MILLION A YEAR
FOR THREE YEARS TO AVOID MORE CUTS BUT IT WAS PROM MISSION
VO PROMISING VOTERS IT WOULD NOT
RESULT IN TAX INCREASE. >> I WANT TO MAKE SURE I HAVE
FIGURES STRAIGHT BECAUSE I'M HAVING TROUBLE RELATING.
>> A LOT OF CONFUSION. >> I'M AFRAID I DON'T UNDERSTAND
THE CONNECTION. >> HERE IS THE AMOUNT IF THE
ATKINSON RECEIVES FROM PROPERTY TAXES. THEY COULD PROMISE
6.5 MILLION INCREASE FOR THE NEXT ATHLETE YEARS WOULDN'T INC
BECAUSE THEY RAISED LEVEE BY 7 MILLION THE YEAR BEFORE TO
PREPAY A CONSTRUCTION LOAN CALLED DEFEASANCE. IF THE
REFERENDUM PASSED THEY WOULD GO BACK TO PAYING THE NORMAL
PAYMENT IN FUTURE YEARS. DEFEASENCE IS PREPAYING
INTEREST. ABBOT SAYS AFTER THE REFERENDUM FAIL ED THE PRIOR
YEARS THE SCHOOL BOARD DECIDED TO RAISE LEVEE TO PREPAID DEBT.
>> THE IDEA OF DEFEASANCE OR PREPAYING DEBT IS DIFFICULT FOR
PEOPLE TO UNDERSTAND BUT 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. >> BUT THE SCHOOL BOARD MEMBERS
CLEARLY DIDN'T WANT TO SAY THEY HAD ALREADY RAISED TAXES ON
THEIR OWN. THEY DESCRIBED IT AS NEEDING VOTER APPROVAL TO
REALLOCATE FUNDS. >> THEY ARE SAYING WE NEED MONEY
TO MAINTAIN CURRENT PROGRAMMING WE HAVE. WE CAN'T USE THAT
FUNDING OVER THERE THAT WE USED TO PREPAY THE DEBT.
>> IT REALLY WASN'T SINKING IN. >> OF THAT PREPAID 7 MILLION
ONE-TIME PAYMENT, THEY ARE SEEKING PERMISSION TO SHIP
6.5 MILLION THREE TIMES. >> WE ARE LEVEEING THE SAME
DOLLAR AMOUNT OVER EACH YEAR. APPROXIMATE -- VOTER PERMISSION.
>> DOESN'T MATTER WHETHER WE VOTE YES OR NO. YOU ARE STILL
GOING TO JUST MOVE IT AROUND TH IS --
>> IN OUR BEST EFFORTS TO BE AS SIMPLE OR TO BE AS CONCRETE AS
POSSIBLE WHEN TALKING ABOUT SCHOOL FINANCE, IT STILL IS
VERY, VERY DIFFICULT FOR PEOPLE TO UNDERSTAND HOW ALL OF THAT
WORKS. DISTRICT AN INCREASE IN STATE
AID A COUPLE YEARS AGO WOULD HAVE MEANT A DROP IN THE TAX
RATE. >> WE WANTED TO STABILIZE THAT
MILL RATE AND USE THAT TO PRE-PAY SOME OF OUR EXISTING
DEBT. BOARD SAID THE SCHOOL DECIDED TO
USE DEFEASANCE TO KEEP THE RATE THE SAME.
>> WE HAVE TAKEN AN 8.7 MILLION DEBT AND CUT DOWN TO JUST UNDER
FOUR MILLION. >> THAT HELPED THEM TO GET THIS
TAX NEUTRAL AS WELL. >> WE HAVE BEEN ABLE TO USE THAT
GAP TO DO THIS OPERATIONAL REFERENDUM AT ZERO TAX IMPACT.
>> BOTH DISTRICT ADMINISTRATORS SAY THIS USE TO SET UP THE
OPERATING REFERENDUM WAS KEY TO PASSAGE.
CAN LIVE WITHOUT SO WE ARE FORCED TO CREATE AN EFFORT THAT
WILL HOP FULLY BE AS SUCCESSFUL AS POSSIBLE IN PASSING
REFERENDUM. REFERENDUM PASSED BY 139 VOTES.
FORT ATKINSON BY 79. SOME NEIGHBORING DISTRICTS DIDN'T
HAVE THE SAME RESULTS. VOTERS IN MOSSTON REJECTED BY 480 VOTES.
VOTERS IN THE JEFFERSON SCHOOL DISTRICT REJECTED THEIRS BY 685.
BOTH MOSSTON AND JEFFERSON WERE ASKING FOR LESS MONEY THAN THEIR
NEIGHBORS BUT EACH OF THOSE CAME WITH A TAX INCREASE. SHOULD WE
EXPECT TO SEE MORE DISTRICTS USING DEFEASANCE?
HAVE REFERENDUM DEBT FOR CAPITAL
IMPROVEMENTS THAT THEY ARE TAKING OUT BONDS ON AND USE THAT
STRATEGY TO STABILIZE THE MILL RATE.
IF THEY ARE NOT PASSING AN ADDITIONAL REFERENDUM THE ONLY
WAY THEY CAN KEEP THAT TAX RATE STABLE OR WHERE IT HAD BEEN IS
PRE-PAY DEBT, IF THEY HAVE DEBT. BUT OF COURSE WHEN DISTRICTS RUN
OUT OF DEBT THAT OPPORTUNITY EVAPORATES AS WELL.