By Eileen Persike | Editor

RHINELANDER – It was just a few weeks into the new school year when School District of Rhinelander Superintendent Eric Burke spoke about the good things happening in Rhinelander.

Things like students taking the 2023-24 ACT test scoring the second-highest composite ever at Rhinelander High School and seven-year-high scores for the state test taken by third through eighth graders in English language arts and math were touted by Burke.

Increased staff retention and improved employee engagement and satisfaction scores are other markers administrators celebrated.

“Overall, we have things to work on but it’s progressing in a positive way both academically and within the culture,” Burke said.

At the same time SDR, like other districts, is struggling to pay bills that are increasing, with revenues that are not keeping pace. This is the other side of the coin that Burke wants taxpayers to understand.

“We added staff and so that increased the percentage and increased our costs, but we’re also seeing results. It’s working,” Burke said. “We’re not paying our teachers top dollar but we are paying them more than what they had in the past and that’s adding to this, but just the cost of everything, our Bowen’s [busing] contract went up, the school resource officer contract is going up. Everything is going up; at the same time the state’s not doing their part.”

The largest part of the budget – salaries and benefits – increased less than 2% over the past two years. The district’s other expenses, transportation, custodians, open enrollment expenses, maintenance and utilities, increased 16% over the same period. Revenue, consisting of mostly state and some federal aid, has increased only 3.38%. A difference of more than $4 million.

A common topic, the impact of this discrepancy on the SDR fund balance was discussed again at the Sept. 16 board of education meeting. The district is transferring about $5 million from the fund balance to pay the bills.

“Our fund balance was at 40% last year, this year we’re at 32%,” Burke explained. “We’re still at a healthy balance – the government finance officers association says between 15-25. Most of the schools in the Northwoods are above 40%. We’re dipping down now.”

The question facing the board is what to do about it.

Historically low mill rates

The state legislature enacted 1993 Act 16 to place limits on the amount of property taxes a school district could levy annually. Bob Thom, district business director noted the loss of inflationary increases has reduced the per-student payment by $3,300 annually.

“There was a time where the mill rate in this district was like $18 per thousand,” said Thom. “We’re at historic lows right now. Back in 2014 we were paying $1,100 on a $100,000 home and today you’re paying $730. Most people saw a dramatic drop in their taxes over the last two years and property value continues to go up and the state clamping down and not allowing school districts to raise any more revenue continues to drag us down.

“It is driving the taxes down, which is what the revenue limit was supposed to do, but it’s not leaving enough money for schools to operate,” Thom added.

New biennial budget

The state’s next biennial budget is expected to be decided in summer 2025.

“We don’t know if that will help us, but we can’t budget that way and we can’t forecast that way because we don’t know what this fight is – they have all this surplus but they’re not using it,” Burke said, noting the state is supposed to be paying two-thirds of special education costs; currently schools are receiving 32%. “The other thing is the Governor just came out with a proposal to increase special ed funding to 90% which would be incredible and would totally take care of our budget issues.”

The district has cut nearly $1 million from its 2024-25 budget. Primarily through attrition, Burke said 15 staff positions were reduced, along with reduced consultant and contracted services. But cutting the district’s way out of a deficit budget would be difficult.

Burke proposes options

There are currently two years remaining on the current operational referendum, which is no longer providing enough additional revenue. Burke proposed a few options for the school board to consider, and to take action on at the October meeting.

The first option is to go to referendum in spring 2025 to ask for additional funding; the next option would be to wait a year, going to referendum in spring 2026. A third option would be to make significant reductions for the 2025-26 school year.

“And we’re open to other ideas,” Burke said. “Right now as it sits, again without knowing where the state is going to be, we’re going to continue to pull from that fund balance, and we would recommend as an administrative team, and we’ve talked a lot about this, is that we would go with the first option and go in the spring, hoping the community would support that.”

Board members voiced support for option one and also option two. A decision is expected to be made at the October meeting.