CHICAGO – Wisconsin voters are looking more favorably on school district borrowing requests, signing off on a record $1.35 billion of debt last year, according to a
The recap on the last year's ballot approvals comes as 23 districts have so far signed up for borrowing requests totaling $708 million on ballot measures last month and on April 4.
The largest request on the April ballot is from the suburban Madison Verona Area School District which is asking for $181.3 million of authority to finance construction of a new high school and auditorium, and to renovate several existing schools.
"Wisconsin is seeing a resurgence in school district borrowing," the Wisconsin Taxpayers Alliance writes in an analysis published this month. "That was 10 times more than five years ago and the most since at least 1993. The previous high was hit in 1996 when $1.04 billion was approved."
Voter approval rates for borrowing are at about 77.1% while separate questions allowing districts to bypass state imposed revenue caps are at about 81.7%, according to the report that called the referendum rates "a record-setting development in state-local finance" that "has received little attention."
As recently as 2011, new kindergarten through 12th grade debt requests of $128.3 million paled in comparison to last year's referendum numbers. The 83 referenda proposed last year was the most since the 84 proposed in 2001 and the 64 approved last year marked the highest number of successful initiatives since 2000 when 67 were approved.
The 77.1% approval rate last year marked the highest since at least 1993. Borrowing has jumped from a $2,313 per pupil level in 2010 to $9,733 in 2016.
The alliance attributes the rise and success rate to several factors. The uptick in borrowing is mostly associated with rising student enrollment figures. Districts now may have more room to borrow after paying down bonds issued during the mid-1990s rise in borrowing as most use a 20-year maturity.
"Politically, a district can claim that a building referendum has no tax consequence," the alliance said.
The rise could also be tied to growing concerns over the impact of past state cuts as the state grappled with its own budget deficits between 2009 and 2013.
The state's economic climate could also have an impact. "A recovering economy and rising household incomes that would increase voter receptivity to increased school spending," the alliance wrote.
The borrowing trends mimic a rising tide of approval for revenue limit requests. Districts rely primarily on state aid and local property taxes for their operating revenue but their ability to raise revenue to keep pace with operating costs is limited to a per-pupil cap.
In fiscal 2017, the floor was $9,100 per pupil. School districts can only exceed the per-pupil revenue limit with voter approval for debt issuances or additional property tax levies.
"Since, under state limits, a school district's revenues are the sum of its state general aid and its school levy, a vote to exceed the caps is a vote to raise taxes," the alliance wrote.
The state has seen an increase from an average of 41 annual requests between 2009 and 2013 to 71 in 2016. Those requests too have won greater approval, rising from a rate of 44% between 1996 and 2010 to 80% last year. While the rise in borrowing requests is tied to enrollment growth, the rise in revenue cap requests is more closely linked to a drop in enrollment which poses funding challenges.
Moody's Investors Service in a December report labeled it a credit positive for the 18 districts that won approval on the November ballot to override property tax caps on operating revenue "because they enhance revenue-raising ability and operating budget flexibility."
Between 1996 and 2009, the state minimum per-pupil spending increased by an annual average rate of 3%. However, since 2009, the amount has remained relatively flat. "Districts have struggled to absorb growing operating costs amid stagnant revenue trends," Moody's said.
Twenty-one districts were seeking to exceed the caps with 18, or 81%, receiving approval. For districts where voters rejected requests to lift the levy caps, the results represented a credit negative, Moody's said.
On the bond measures so far this year, three totaling $22.5 million were on the February ballot with only one for $6.1 million approved. The total amount being sought on the April ballot is $685.4 million, according to the alliance.
