The Racine Unified School Board voted unanimously Monday night to increase property taxes about 8 percent.
The district's tax levy next school year will be $75.9 million, up from $70.1 million this school year. The district's property tax rate will increase 8.7 percent to $7.85 per $1,000 of assessed property value. This school year's tax rate was $7.22 per $1,000 of assessed value.
Taxes on the average Racine home, worth about $124,700, will increase about $79.
"It's not as bad as we first thought," said Dave Hazen, Unified's finance officer, who presented the budget to the School Board Monday night.
Reductions in state aid led to the increase in local property taxes. The state budget approved this year reduced aid to Racine Unified by about $900,000. Based on previous state budgets, which had never cut school aid, the district had anticipated about a $6.1 million increase.
The Legislature, facing a multi-billion dollar deficit, voted to cut school aids and pass the costs on to local taxpayers. Unified responded at first by estimating a 12 percent increase in its property tax rate next year. The School Board directed staff to maintain the district's revenue cap authority - meaning, basically, raise as much money as allowed under state law - but lower the amount of money the district needs to raise from property taxpayers.
Staff came back with a plan that saved $5 million and used another $1.5 million from the district's fund balance. The district also benefited from some aid dollars that were higher than anticipated and an unexpected increase in student enrollment.
Unified got a surprising vote of confidence earlier this year when the Racine Taxpayers Association, which usually opposes tax increases, supported a 12 percent property tax increase to keep Unified fully funded.
Despite the increase in the district's tax levy, Racine Unified's tax rate remains lower than neighboring school districts. Oak Creek/Franklin's tax rate is the next closest at $7.98 per $1,000 of assessed value. Kenosha Unified's rate is $8.81 per $1,000, Burlington's is $8.70 per $1,000 and Milwaukee's is $9.70 per $1,000.
Stimulus money, savings on refinancing Unified debt and transportation, and other savings allowed the School Board to reduce the tax increase by about 24 cents per $1,000 of assessed property value. Initial estimates back in June suggested the district would increase taxes to $8.09 per $1,000 of assessed property value.
Stimulus money also allowed the school district to move forward with its "data warehouse," which will allow parents, teachers and administrators to track student performance. The district is also spending $3.4 million next year to expand Fratt Elementary School and another $3.9 million of school maintenance.
School Board Member Dennis Wiser thanked Hazen and Unified staff for their work on a "horribly convoluted" budget that included cuts in state aid and an influx of federal stimulus money.
"I feel very comfortable voting for this package tonight," Wiser said.
Next year's budget doesn't get any easier, Hazen told the School Board.
Rough estimates already show a $3 million to $4 million deficit, he said. The state has locked in a roughly 2 percent increase in revenue cap space for the district - $200 for students - but expenses may increase by double that, according to Hazen.
Board Member Don Nielsen piled on with worries about the "cliff" coming in two years when stimulus money disappears.
The district's overall budget, including state and federal aids, is about $267 million.
The district's biggest annual expense - 59 percent of its budget next year - is spent on instruction. Buses and utility costs covered about 14 percent of the budget, followed by 11 percent for instruction and pupil support. Administration made up 5 percent of the budget.