An Analysis of the Governor’s Assumptions & Projected Financial Savings for the Sheboygan Area School District

March 21, 2011

Budget Repair Bill
The purpose of the first part of this communication is to set the record straight regarding the budget information that was released from Governor Walker’s office this week. Several of the assumptions and the projected financial savings released by the Governor’s office are different than the reality that the Sheboygan Area School District will be facing. The SASD does however agree with Governor Walker’s disclaimer, “Actual impact of these reductions and savings on individual school districts in FY 2012 and beyond may differ significantly from these estimates.”

A comparison of Governor Walker’s financial figures and the actual SASD figures follows:

There is a significant difference between Governor Walker’s projected estimates and the actual dollar figures.

  • The Governor reported that the cost savings on health insurance would be approximately $3 million. The actual cost savings on health insurance in the SASD will be approximately $800,000, a difference of $2.2 million. The inaccuracy in the Governor’s figures is based upon his assumption that SASD employees pay none of their health insurance premiums. Many SASD employees do pay, and will now pay a greater percentage of their health insurance premiums.
  • The Governor reported that the pension contribution savings would be more than $4.1 million. SASD officials calculate that the actual savings will be $3.8 million, a difference of $300,000.

Therefore, the reality is that the SASD will see $ 2.5 million less in savings than the Governor’s office estimates to address the proposed cuts in state aid.

Memorandums of Understanding
Concern has been raised regarding the SASD Board’s decision to ratify memorandums of understanding with several of the SASD employee groups. Individuals have questioned the decision and have asked if it was a better deal for the district and its taxpayers than the Budget Repair Bill. We believe that these memorandums of understanding were the right decision, and show that the District is being fiscally responsible and sensitive to our taxpayers and their ability to pay. The SASD employee groups agreed to wage freezes for a year, thus saving the district over $900,000. Had the District not entered into these agreements, under the Governors Budget Repair Bill the employee groups would have had the right to negotiate on a base wage increase up to the consumer price index. There are several consumer price indexes. A conservative one is 1.6%.  By agreeing to wage freezes, this increase will not occur, saving over $900,000.

SASD and its employee groups have worked collaboratively to meet and exceed all the requirements of the Governors Budget Repair Bill. Included in these agreements are:

  • Concessions that equal $6.5 million in savings
  • All groups agreed to a wage freeze and waived their right to negotiate salary based on the CPI as allowed by the Budget Repair Bill for the 2011-2012 school year. (Approximate savings of $900,000)
  • Lane and step increases are frozen.
  • All groups will pay 5.8% or one-half of the Wisconsin Retirement System contribution, as required by the Budget Repair Bill.
  • All groups will pay 12% toward their health insurance premiums, as required by the Budget Repair bill.

Governor Walker’s proposed 2011-13 State Budget negatively impacts education
Governor Walkers proposed 2011-13 budget, if passed as proposed, will have a significant negative impact on the SASD. Per the proposed budget, the SASD will need to develop a preliminary balanced budget for the 2011-12 school year that will include a $2.7 million reduction in Stimulus and Edujob money, more than a $800,000 reduction in federal IDEA funding, and more than a $2 million reduction in other categorical revenues. 

  • The Governor proposes cutting school aid by $834 million over the biennium. He also proposes reducing allowable revenues by approximately $825 per pupil from current law over the biennium. The statewide reduction in allowable revenues totals $1.7 billion over the biennium. This reduction in allowable revenues for Wisconsin public school children is unprecedented in Wisconsin history.
  • The proposed elimination or reduction of competitive categorical and grant programs under the Governor’s proposed 2011-13 biennial budget bill (2011 Assembly 40 and 2011 Senate Bill 27) include the following:
  • Aid for Children at Risk Grants
  • Alternative Education Grants
  • Grants for Advanced Placement Courses
  • Grants for Alcohol and Other Drug Abuse Prevention and Intervention Programs (AODA)
  • Grants for Nursing Services
  • Grants for Science, Technology, Engineering, and Mathematics Programs (STEM)

The following categorical aids received a ten percent (10%) cut, but will be administered consistently with past practice with the exception of Gifted and Talented Grants:

  • 4K start up grants
  • Aid for CESAs
  • Gifted and talented programs
  • Open enroll transportation
  • School breakfast grants
  • Sparsity aid
  • Peer Review and Mentoring
  • Grants for Mentoring
  • Aid for AODA (PR)
  • Bilingual-bicultural
  • Head Start supplement
  • SAGE-Debt service
  • School day milk
  • Tribal Languages (PR)
  • Youth Options transportation
  • Tuition payments

While I recognize that Governor Walker has provided significant (and controversial) management tools to help local school leaders deal with state aid cuts and revenue cap reductions, the tools alone will not provide enough savings to balance our budget. We will need to make additional cuts. The additional flexibility the District gained by entering into these agreements with four of its employee groups will allow the district to begin addressing its budget deficit by having employees pay more of their share of their benefits packages.

Please contact my office if you need additional information or further clarifications. In the days ahead, you will continue to receive updated information as the dynamics of the process continue to move forward. Please be assured that we will continue to focus on our mission of educating our students and serving the families in our community. We continue our commitment to providing quality programming and services to our students, while being fiscally responsible to our taxpayers

Joseph M. Sheehan, Ph.D.
Superintendent of Schools
superintendent@sheboygan.k12.wi.us

Go back to the District News & Budget Information page