Property taxes would spike under MPS referendum scenarios

Annysa Johnson | Milwaukee Journal Sentinel

Providing Milwaukee Public Schools students with a top-of-the-line education could cost as much as $640 million more a year in operating costs alone, more than doubling local property tax bills, district officials and their financial advisers told members of MPS' referendum task force.

The figure appeared to shock at least some members of the ad hoc panel during a meeting Monday evening. And they cautioned against asking taxpayers for too much, saying a defeat at the polls could hinder MPS' prospects for a referendum for years.

"The last time you had a referendum was 25 years ago," said Alan Shoho, dean of the University of Wisconsin-Milwaukee's School of Education, who suggested the task force not recommend a figure at all, but leave that up to the school board.

"You blow this one, you may not get another shot for a long time," Shoho told the district. "So, you've got to get the right number."

This is how uneven assessments lead to unfair taxes In dozens of communities across Wisconsin, 20% or more of taxes are being paid by the wrong people, a Milwaukee Journal Sentinel analysis found.

MPS is laying the groundwork for its first referendum since 1993. The state's largest district, which serves more than 75,000 mostly low-income children of color, is one of just a few in southeastern Wisconsin that have not gone to referendum in the last 20 years to seek additional dollars for their schools.

Proponents hope to get the question on the April 7 ballot to take advantage of the large expected turnout for the Democratic presidential primary.

Board members say the referendum is needed to give MPS students the same quality of education as their suburban peers. But they stressed Monday that they will be taking into consideration the impact on local property taxpayers.

"The numbers (presented Monday) reflect our real needs," said at-large board member Bob Peterson, who campaigned on the need for a referendum.

"I also think our school board is going to want to take to the voters something we think has a good chance of winning."

The MPS board convened the task force, chaired by Bucks President Peter Feigin and Kimberly Walker, chief operating officer of the Boys & Girls Clubs of Greater Milwaukee, to vet its prospects for a referendum, including a review of its financial picture.

Monday's meeting, the third of four, offered the first public look at the numbers the district is contemplating, including staffing, costs and the potential impact on property taxpayers.

MPS officials laid out two potential scenarios: a "gold-standard" education that would cost an additional $640 million a year and a lesser "plan B" costing about $319 million more a year.

The proposals would lower class sizes and expand programming on a number of fronts, from early childhood education to gifted and talented and career and technical education. And they would increase staffing by 1,982 and 966 employees, respectively.

MPS' has a current budget of about $1.2 billion a year and employs about 10,000 people.

The proposals would increase the MPS portion of Milwaukee's property taxes from the current $9.58 per $1,000 of assessed value to $15.72 for the lower figure and $22.41 for the higher, said Todd Hajewski, a vice president with Robert W. Baird & Co., which is advising the district on the referendum.

For a home assessed at $300,000, that would push school property tax bills from $2,874 to $4,716 on the low end and $6,723 on the high end, according to Hajewski — increases of 64% and 134% respectively.

Homes assessed at the median sale price of about $150,000, would see their school taxes rise from $1,437 to $2,358 or $3,362, respectively.

The tax impacts reflected operating costs only and did not include any facilities improvement. Those would cost between $310 million and $1.4 billion, depending on the scenario, which the district would most likely cover through borrowing.

Baird also offered three scenarios ranging from $83 million to $186 million, which would increase the school tax rate by $2 to $4 per $1,000 in assessed value.

School districts are limited in how much they can raise in state and local dollars by so-called revenue caps that were put in place in the 1990s after decades of rising local property taxes for schools. State law allows school districts to exceed their revenue limits with permission from local property taxpayers in a referendum.

Since 1990, Wisconsin school districts have passed more than 1,600 referendum proposals totaling at least $12 billion — more than half of that in the last decade. Referendums were traditionally used to assume debt for capital projects. But districts have increasingly used them to exceed revenue limits and raise additional dollars for operating costs.

'Pie in the sky'

Steve Francaviglia of Aurora Health Care called the MPS figures "a little pie in the sky" and said taxpayers would expect to see a return on their investment. He urged the district to focus on improvements that would "change the culture," saying that's the primary reason families and teachers leave.

"Because this is not a sprint. It will be a marathon," Francaviglia said. "By asking for all that money upfront, you're turning it into a sprint and it's not going to happen. ... You've got to figure out a better plan about how we're going to do this."

MPS lobbyist Chris Thiel called the numbers morally defensible and said even the additional $640 million would be less on a per-pupil basis than some suburban districts spend on their students.

At least two task force members raised concerns about omitting facilities improvements, saying MPS students are "21st-century students in 19th-century buildings."

Some questioned whether MPS could feasibly hire all of the staffing needed to execute the improvements it is proposing. And others said the district would have to show that it has been a good steward of its current dollars and create a road map for improvement if it's going to persuade taxpayers to give it more.

Asked if the district had any other options besides a referendum, Superintendent Keith Posley said no.

"There are just too many needs to make it happen with the options in the playbook that we have," he said.

"We've turned over every rock that we have and looked under every seat cushion we have. These numbers ... are examples of what we do not have for children on a daily basis. And for them to compete with everyone around the country, we have to do better."

Contact Annysa Johnson at anjohnson@jrn.com or 414-224-2061. Follow her on Twitter at @JSEdbeat. And join the Journal Sentinel conversation about education issues at www.facebook.com/groups/WisconsinEducation.