Tax Impact and Frequently Asked Questions
Q: When is the non-recurring operational referendum?
A: The School District of West Salem non-recurring operational referendum will be held on Tuesday, April 5, 2022. Vote in the village or township in which you live. All polls are open from 7:00 a.m. to 8:00 p.m. and you will need a photo ID to be able to vote.
Q: What is the question on the non-recurring operational referendum ballot?
A: "Shall the School District of West Salem, La Crosse County, Wisconsin, be authorized to exceed the revenue limit specified in Section 121.91, Wisconsin Statutes, by $2,500,000 for the 2022-2023 school year, $2,500,000 for the 2023-2024 school year and by $2,750,000 for the 2024-2025 school year, for non-recurring purposes consisting of maintaining educational programming, facilities and buses and paying salary and other operational expenses?"
Q: Why do we continually have to go to referendum every three years? Where does the money go?
A: Once a district begins an operational referendum cycle, as we did in April 2019, it must continue as long as the state has the same funding formula. At the end of each three year cycle, the previous referendum dollars must be removed from the budget and a new referendum may be placed on the ballot, asking for revenues for the next three years.
Q: Are there school districts in the state that do not have to go to an operational referendum?
A: Yes, there are districts that do not have to go to referendum. This is because their enrollment is increasing and they receive much more state aid than other districts, and some of this is based on the per-pupil rate that they receive. The current state funding formula happens to work for their districts.
Q: What other school districts in the state of Wisconsin have gone to operational referendums? Is there a referendum study that shows historical referendums for school districts?
A: Yes, since 1993 there have been 1,061 operational referendums to exceed revenue caps in the state of Wisconsin. From February through April 2022, 49 school districts, including the School District of West Salem are holding operational referendums. Historical data on referendums in Wisconsin can be found by visiting the Department of Public Instruction page here.
Q: What can we do to facilitate a change in the school funding formula to fairly address the educational shortfalls?
A: Contact your local and state legislators. Different organizations throughout the state of Wisconsin have been trying to address this issue for a number of years, but unfortunately, not much progress has been made. Every district is unique, so no matter what formula is proposed, there will always be winners and losers. This makes changing the funding formula very challenging. The current State Superintendent, Jill Underly, has proposed a new school funding formula to our legislators.
Q: The district received federal ESSER funding, so why do you need funds for a referendum?
A: The federal ESSER dollars that the district received have a focus on keeping schools open during the pandemic, which we have done. Some of the funds were used last year and the current fiscal year to offer a virtual learning option to students (CRVA), purchase cleaning materials, and provide resources to allow students to continue to learn throughout the pandemic. Using the federal dollars is challenging because there are many stipulations. We cannot use the funds for general operations, rather, they need to be used on making up for learning loss and keeping schools open now and into the future during the pandemic. Another aspect of the dollars is that they are a one-time funding source. We have until 2024 to use them, however, after that they expire and the district will have to go back to using only local and state funds. Thus far, we have used the dollars to positively impact learning and keep our doors open.
Q: What would happen if the referendum would fail?
A: If the April 5 non-recurring operational referendum does not pass, the School Board will need to consider various options to reduce the 2022-2023 budget. Actions could include the following:
- Increase class sizes K-12 to reduce teaching and support staff
- Reduction in co-curricular offerings K-12
- Reduce funds for staff supplies, equipment, and training
- Reduce custodial, maintenance and clerical budgets and staffing
- Reduce the supervisor/administrative team
- Reduce field trips K-12
- No additional capital improvements
- No replacement of school buses
Any reductions the School Board and district may make, including the items listed above, would negatively affect the quality of education our students receive and deserve.
Q: If the SDWS mill rate has been stable at $9.15, why does my property tax bill show an increase?
A: The increase on the school district portion of residents' property tax bill is due to annual increases in the estimated fair market value of the property, which is calculated by the Wisconsin Department of Revenue. Over the last five years, the average fair market value increase for School District of West Salem property owners is 5.54%.
Q: If the school district mill rate decreases with this referendum plan, does that guarantee that my school property tax bill will decrease?
A: The proposed lower $8.32 mill rate does not guarantee that property tax bills will decrease, but it does lessen any potential increase in taxes due to rising fair market value of your property. Please continue reading for additional details and some examples.
As noted in the answer above, the fair market value of the property, determined annually by the Wisconsin Department of Revenue, affects school property taxes. Using the five year average from the answer above as a reference, we can project a range of possible outcomes of a lower $8.32 mill rate on individual tax bills.
The current $9.15 mill rate equates to $915 in property taxes per $100,000 of fair market property value. The School Board referendum plan to lower the rate to $8.32 would mean a drop of $83 on your tax bill for every $100,000 of fair market property value. This scenario is based on a 0% increase in the fair market value from 2021-2022. We can use that as the lower point of our range of possible outcomes.
If we instead base a scenario on the School District of West Salem's fair market value average annual increase of 5.54%, that would mean a mill rate drop from $9.15 to $8.32 would change a potential school property tax impact from an increase of $50.69 per $100,000 of property value (for a $9.15 rate) to a decrease of $36.91 per $100,000 of property value (for an $8.32 rate). In this example, the new, lower $8.32 mill rate doesn't lower your property taxes, but it does lessen the increase in taxes due to rising fair market value of your property.
Q: Why do school districts use fair market value to calculate property taxes instead of assessed value?
A: The District's mill rate is determined using the equalized or fair market value of property as determined by the Wisconsin Department of Revenue. The municipalities use the assessed value with an adjustment to get a balance between the assessed and equalized property value. This is not that the school district is receiving more property tax dollars. The dollars are just getting shifted appropriately within the municipality to account for the balance between assessed and equalized. Another way to look at it is; in Wisconsin assessed and equalized are used to apportion property taxes. Uneven changes can shift property taxes between property owners resulting in higher bills even if the levies remain the same.
DPI Explanation: The two commonly-used methods of valuing property in Wisconsin are assessed and equalized. Assessed valuation is property value as determined by the local municipal assessor on January 1 in any given year. Equalized valuation results when the Department of Revenue (DOR) applies an adjustment factor to the assessed value. The adjustment factor incorporates, among other elements, actual property sales in the municipality during the past year and is meant to ensure each type of property has comparable value regardless of local assessment practices.