The district will make additional cuts in expenditures. Likely three staff positions and an additional $20,000 in other costs that are to be determined. Also, the District will have to cut back on deferred maintenance that can be completed and will not hire any new staff.
As much as it seems like closing the school would save residents' school taxes, the reality is that each community is responsible for funding their children's education, regardless of location. Each Mercer student that chooses to enroll in a neighboring district is still paid for by Mercer residents and the money collected from local school tax goes directly to the enrolling district. Unfortunately it gets more complex based on how each district is funded.
In the case of a consolidation, merging with Hurley School District, or any other district, would first require agreement from both district boards. The calculation of the tax impact is complex as Hurley receives about 60% of their revenue from general state aid whereas Mercer is considered property rich and receives no general state aid. While there are some short term (5 year) incentives for consolidation, in the long run, consolidation would lead to a decrease in general state aid that Hurley currently receives (equating to an increase in the same amount in local property taxes) if Mercer and Hurley’s property values were combined. Ultimately the tax liability would increase for both Hurley and Mercer residents.
The bottom line is that Mercer residents are responsible for funding education for their community's children.
This year, we are serving 102 students in the school (that number fluctuates as students move in and out of the district). This is our current headcount-the number of students who receive educational services in our school.
That being said, that’s not the number of students we receive funding for or how per pupil expenditures are measured. We are responsible for educating the students who live within our district regardless of where they attend school. Our membership count represents the FTE (full time equivalency) for which we receive funding. This year, our membership count is 129, but to make things more complicated, we are funded on a 3 year rolling average so our membership count is 132 pupils. After we receive our funding based on our membership count, we pay the districts where students are open enrolled a set cost to provide for their education through the Open Enrollment program. This is an expense that is allocated in Fund 10 (general fund).
- The 4K classroom, serving 11 students, is part of the regular 4K-12 school and is funded out of the general fund (Fund 10). The 4K classroom has $67,420 budgeted for this year.
- For 2023-24, the district budgeted $120,252 for a 2-3 year old program, serving 10 students. This is a Fund 80-Community Fund expenditure, so it is outside of the revenue limit formula.
The cost of transportation last year (22-23) was $150,785.37. Because of the sparsity of our district, and the high cost of transporting students in rural areas, a large percentage of our transportation costs are offset with revenue from the state through the High Cost of Transportation aid fund. The amount we will receive for 2023-24 has not been released yet, but the funding for High Cost of Transportation increased in the state budget, so we anticipate an increase in our share of revenue for the high cost of transportation.
In 2022-23, we received the following revenue from the state that is allocated solely for transportation. These funds cannot be used elsewhere:
- Transportation Aid: $3,597.83
- High Cost of Transportation: $89,693.99
That leaves $57,493.55 that was paid by local funds.
Eligibility requirements for high cost of transportation is described on DPI’s website as follows: Wis. Stat. § 121.59 (1) (a) "eligible school district" means a school district the membership of which in the previous school year, when divided by the school district’s area in square miles, is 50 or less. The number of square miles per school district used in this calculation is the same as is used to calculate Sparsity Aid. Each eligible school district with a per pupil transportation cost exceeding 140 percent of the statewide average per pupil transportation cost will receive a share of this categorical aid.
Note that if the per pupil cost of transportation drops below 140% of the state average then the high cost of transportation aid will not be received. Therefore, cutting transportation costs could lead to a loss of that revenue for the district and result in longer bus routes with no financial gain.
If approved, the referendum would allow the District to exceed the revenue limit by $800,000, which does not equate to $800,000 in new revenue. This year (2023-24), revenue for the general fund decrease by approximately $500,000. The District anticipates another $200,000 loss in revenue next year (2024-25), so part of the amount collected would counter the loss in revenue.
There is a decline in some expenses, such as consumable books or supplies that are purchased per student. We have also decreased expenditures by reducing staff by combining classes. Last year we did not hire when staff retired or resigned. The following changes were made last year:
- We did not replace the high school special education teacher; instead the K-12 art teacher also serves as the high school special education teacher
- We did not replace the 7-12 grade English teacher. The business teacher is also teaching 9-12 grade English and the 4-6 grade English teacher is now also teaching 7th and 8th grade English.
- We did not replace a high school math teacher. The current math teacher now teaches all 7-12 grade math.
- We did not replace the 1st/2nd grade combination teacher. Instead, the K teacher is now teaching K/1 combined and the 3rd grade teacher is teaching 2nd/3rd grade combined.
- We did not replace the Technology Coordinator when he resigned in December last year
That being said, there are other expenses that do not decline with declining enrollment such as building maintenance. Currently, we find ourselves needing to invest in the facilities. Several projects that were noted in a 2017 building audit by McKinstry have yet to be addressed. Those projects include: replacing the two boilers which have exceeded their life expectancy leading to heat failures, mechanical upgrades (such as the air handling unit that was installed in 1972 that is serving the northeast end of the building-including the TechEd room, kitchen, cafeteria), electrical panel upgrades (with the exception of the 1992 addition, the electrical panels are outdated).
Mercer has been spending well below the state average on facilities and at this point we have several projects that need attention, not to mention an aging building that no longer reflects the changing needs of students. This year, we have been developing a Long Term Facilities Plan to map out over time how facilities are maintained, adapted, updated or replaced to support future needs in order to:
- Improve safety and security
- Increase accessibility
- Maintain facilities
- Support student learning
- Protect district assets
- Inspire community pride
Per the Iron County Miner, Administrator Renae McMurray is quoted “So with an $800,000 levy in 2024-25 that would give us …..and the total levy we would collect would be about $3,061,899.” Is the $3,061,899 just local property tax revenues or is there other funds to be received?
This levy only refers to local property taxes. The revenue limit is composed of property taxes and general state aid. However, Mercer is considered property rich and no general state aid is received, so the revenue limit is comprised almost entirely of property taxes.
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SOME DEFINITIONS
Fund 10 General Fund: This fund is used to account for all financial transactions relating to the district’s current operations, except for those required to be accounted for in other funds.
Fund 21 Special Revenue Fund: This fund is used to account for the proceeds of specific, non-trust revenues of which the expenditures are limited to specified purposes related to district operations. The most common source of such funds is gifts and donations. There may be a fund balance in this fund. (This fund is where student clubs and class accounts exist and they hold their funds from fundraising or donations)
Fund 27 Special Education Fund: This fund is used to account for the excess cost of providing special education and related services for students with disabilities during the regular school year or extended school year. Also included are charges for services provided to other districts as a result of being a host district for a special education package or cooperative program. School-Age Parent costs are also charged to this fund. No fund balance or deficit can exist in this fund.
Fund 38 Non-Referendum Debt Service Fund: This fund is used to account for transactions for the repayment of debt issues that were either: not authorized by school board resolution before August 12, 1993, or incurred without referendum approval after that date. A fund balance may exist in this fund.
Fund 50 Food Service Fund: All revenues and expenditures related to pupil and elderly food service activities are recorded in this fund. A fund balance in the Food Service Fund is permitted. There may be no deficit in the district’s Food Service Fund.
Fund 80 Community Service Fund: This fund is used to account for activities such as adult education, community recreation programs such as evening swimming pool operation and softball leagues, elderly food service programs, non-special education preschool, day care services, and other programs which are not elementary and secondary educational programs but have the primary function of serving the community.
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