Lesson Time - Electors DO NOT Get the Final Say

In 2009, the electors of the Sun Prairie School District voted to reduce the levy requested by the school board by $2,000,000.  A couple of school board members (ahem...McCourt!) pushed the idea of ignoring the electors and going with the tax levy they originally proposed.  Ultimately, however, the board decided to heed the voice of the electors and reduce the levy.

This year, the "electors", despite a still crumbling economy, felt so generous as to give the school district MORE tax levy than requested by the board.  WTF?   Then the school district itself "reduced" the levy as part of the situation report.  Finally the school board voted to a approve a levy which was only about $9,000 higher than it originally proposed-- a far cry for the $267,000 additional windfall voted by "the electors"

Can the board "go against" the electors?
Could the board have "gone against" the electors?  Absolutely.  The statutes say so. But (and it's a rather large one), had a subsequent legal challenge been filed, the district would have been required to SHOW that they needed the entire proposed tax levy to "operate and maintain" the schools.

We all know how the story turned out.  Not only was the $2M most definitely fluff....but the district ended up with a SURPLUS of $1.3M!  Instead of using $800K of fund balance to balance the books, they actual DEPOSITED $500K additional into the fund.  Imagine that. Had the electors not cut the levy, would we have had a $3.3M  surplus?  Or would the district have found some boondoggles to finance?  Clearly the budget presented 2 years ago was WAY more than that necessary to "operate and maintain" schools.

What happened in 2009 was a shot across the school district's bow.  Prior to October 2009, residents of the district were asleep at the switch.  The school district spent like money grew on trees.  And the beauty of it was that the value of property in the district grew at such a phenomenal rate, that even with exorbitant spending and huge tax levies, the mill rate stayed low.  As long as property taxes didn't rise too dramatically, no one cared.

But that all changed late with the economic recession of 2008-09, from which we still haven't surfaced.  Now money is tight.  Unemployment rates have skyrocketed.  People in THIS city are being forced from their homes.  And that's what caused a huge crowd to suddenly appear at the annual meeting where historically there were 30 or fewer attendees, the vast majority of whom were connected to the district.

This year, a throng of nearly 200 folks attended the electors meeting.  But they had something completely different in store.  They wanted to use the annual meeting to increase the budget and the tax levy.  And they did...voting by an overwhelming majority...reports are there were less than 10 votes against....to increase the proposed tax levy by $267,000 to fund 6 initiatives which the board had repeatedly rejected to fund with new tax dollars.

So...do the electors set the tax levy? Or not?
The answer lies in chapter 120 of the statutes, along with Attorney General (AG) opinion for clarification.  Why is AG opinion required?  Because in s. 120.10(8) of the statute, it says...

120.10  Powers of annual meeting. The annual meeting of a common or union high school district may:(8) Tax for operation. Vote a tax for the operation of the schools of the school district.

Meanwhile, ... in s. 120.12(3) of the statute, it says...

120.12  School board duties. The school board of a common or union high school district shall: (3) Tax for operation and maintenance. (a) On or before November 1, determine the amount necessary to be raised to operate and maintain the schools of the school district and public library facilities operated by the school district under s. 43.52, if the annual meeting has not voted a tax sufficient for such purposes for the school year.
 (c) If on or before November 1 the school board determines that the annual meeting has voted a tax greater than that needed to operate the schools of the school district for the school year, the school board may lower the tax voted by the annual meeting. 

Now sprinkle in a dash of AG opinion:

Under sub. (3), the school board of common or union high school district has ultimate authority to determine the tax levy for operation and maintenance of the schools in the district. 79 Atty. Gen

The AG is perfectly clear, the power to set the tax levy rests with the school board.  The Annual Electors meeting certainly serves as an advisory referendum.  The problem with the elector's meeting is exactly what happened this year: it's too easy to flood the meeting with a certain special interest group.  This year, the district caught the electors napping and made its push to support new initiatives to which the school board had repeatedly said: not with new tax dollars.

The key 
The key to all this lies in the statute: "a tax necessary to operate [and maintain] the schools".  Look it up in any dictionary....the definition of "initiative" is "new" or "starting".  That means that the magic "6 initiatives" were not and are not required to "operate" or "maintain" the schools.  A good thing? Undoubtedly.  Improve the schools? Perhaps.  But "good" and "improve" are not equivalent to "operate and maintain".

And that is why setting a tax levy ABOVE what was initially proposed by the school board was just plain wrong.  And the school board knows that.  That's why they ultimately chose to do what they did: set the levy at 3.5% and then authorize the district to implement the 6 initiatives within that budget.  Tom Weber was spot on...

 "...the board has a judiciary and legal responsibility relative to the tax levy, and if the electors vote for a tax levy too small or too large to maintain and operate the school district, the board is legally obligated to adjust the levy so it is in line. "
----School Board member Tom Weber, 10-24-11

The bottom line
The bottom line is that the Annual Meeting is really designed to be a final opportunity for the electors to advocate their wishes before the school board.  At the end of the day, however, it all rests on the budget prepared--and approved--by the school board BEFORE the annual meeting.  The annual meeting is NOT designed to be the forum for a Hail Mary to insert budget initiatives.  Neither is it designed to be a means for ANY special interest group to "load up" the ballot box.  Otherwise...why bother to have ANY public discussion on the budget before the annual meeting??  When one can just wait till the annual meeting and then ambush the board and the district residents with ulterior motives.

The school board is elected for a reason...and that is to monitor the budget setting process with one eye out for the children and the other on the taxpaying electorate.  If this means we go back to having 30 people at the annual meeting, then so be it.  In fact...if the school district and board have done their jobs well, then arguably there should be no need to attend the meeting because the budget should be transparent, sensible, and fiscally responsible.