Opt-out vote is Tuesday Lisa Swanson, a member of Save Our Schools, used a power point presentation at the William J. Radigan Fire Station Saturday morning to describe the background of the financial plight experienced by the Vermillion School District. By David Lias Lisa Swanson began a familiar routine Saturday morning.
She flipped the switch on a projector at the William J. Radigan Fire Station, and waited for the bulb to flicker on.
As the glow grew brighter on the screen behind her, Swanson began a presentation she hopes people will find convincing.
She�s been to the Senior Citizens Center and the Rotary Club. She�s spoken to the Vermillion Lions and Saturday�s was her second public presentation at the fire station.
Swanson, a member of the Vermillion Parents Teacher Association and Save Our Schools, a group formed recently to spearhead a campaign for property tax opt-out in the Vermillion School District, knows she likely won�t be able to convince everyone.
She�s hoping, however, that enough people � a majority of those who vote this coming Tuesday � will understand that the opt-out is needed to provide extra revenue to the school district.
�When I heard about the general fund being in trouble, I wanted to understand what sources of revenue we have in the school district, where does that money come from, and why doesn�t it seem to be enough for what we are providing here in Vermillion,� Swanson said.
The local school district, she said, has three major sources of revenue to fund the district�s $6.5 million general fund budget. Thirty five percent, or roughly $2.3 million of the fund comes from local taxes. State aid, currently at approximately $3 million, makes up 47 percent of the general fund.
The general fund receives an additional $1.1 million, or 18 percent of the fund, from miscellaneous sources.
General fund levies, Swanson noted, are capped by the state. Ag property owners in the school district currently are taxed $3.32 per $1,000 of assessed valuation. Owner-occupied property is taxed at $5.34 per $1,000, and the general fund levy for commercial property is $11.45 per $1,000.
Should the opt-out be approved Tuesday, the levies would increase $1.20 per $1,000 for agriculture property, $1.93 per $1,000 for owner-occupied property, and $4.14 per $1,000 for commercial property.
Roxan Brown can�t support those increases. She�ll be voting no on Tuesday.
�One of the reasons I won�t support it is I believe we have taxation enough in this country,� she said. �My husband is disabled, and I�m working, so we�re pretty much on a fixed income.�
Even a modest increase in taxes � $100 per year � �would still be a burden for us. Because not only will our taxes go up. (The cost of) groceries will go up, because the opt-out will affect the property taxes at the grocery stores.
�It will affect property taxes at every place we want to shop here in town,�
Brown said. �In order to cover these raises, the businesses will have to raise more money somehow.�
The Vermillion School District, Swanson said, has something in common with a majority of districts statewide. They, too, are being strained financially by the limits mandated from Pierre.
�There are 168 school districts in the state,� Swanson said, �and 111 of them have attempted to opt-out.�
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Opt-outs are now in place in 78 South Dakota school districts, she said.
Swanson said when the school funding formula was put in place 10 years ago, opt-outs were provided as a means for school districts to enhance their education.
�When 111 school districts attempt to opt-out, it isn�t being used anymore as a way to enhance to enhance education,� she said. �School districts are depending on opt-outs just to survive; the state is not funding education adequately.�
Brown said Vermillion residents budget to live within their means. She can�t understand why the school district doesn�t do the same.
�The school system has known that families are getting smaller as the baby-boomer generation gets older, and that we would be getting less money from the state because of less enrollment,� Brown said. �The school system should start budgeting it a little better. They can�t expect to raise their budget when they are dealing with less income coming in, too.�
Communities may try to attract more young people with children, to bolster enrollment rolls so the local school district receives more state aid.
There�s a problem, though, Swanson said. More property owners won�t solve the problem. �The state has determined the need for our school,� she said. �The need is met through our property taxes and state aid.
�The more you can contribute to your need in property taxes, the less the state has to give you to compensate for that,� Swanson said. �They (the state) loves it when you have more property taxes being paid in town, because it�s going to cost the state less. But it doesn�t improve our situation at all.�
Additional tax revenue generated in a school district by an opt-out, she added, doesn�t decrease state aid receipts.
�If we decide to opt-out, the state will not say ?we get to pay you less money in state aid.� An opt-out will continue to provide, based on the need they�ve determined through a formula,� Swanson said. �Opt-out money does not lower money coming from the state.�
School districts, she added, have little to no control over the amount of state aid revenue they receive.
�There are two main elements to the school aid formula: one is your ADM, your average daily membership, and the state-determined allotment, your per-student allotment per year,� Swanson said.
Those two figures are multiplied together, Swanson said, determine state aid. Last year, the average daily membership in the Vermillion School District was 1,295. The per- student allocation, determined by the state Legislature, was $1,295 per student.
That means the Vermillion School District received $5,387,601 in state aid in 2004-05. This figure includes revenue received for the general fund, special education and pension funds.
�We don�t have direct control over how much money will be coming to the school district each year,� Swanson said. �The school board can�t control that problem. We as a community can play a part in controlling this, but it has to be everyone together, sending a voice to Pierre.�
Brown believes the school district could respond to budget uncertainties by cutting some programs that aren�t necessarily vital to education.
�Education means reading, writing and arithmetic,� she said, paraphrasing comments made recently by a friend. �It doesn�t mean football, basketball and all the extracurricular things. What happened to the time when sports had to look at what it had to spend? Why are expecting more for them and less for education?�
Brown also believes it�s time for the school district to make further cuts in administrative staff.
�I don�t believe we need assistant upon assistant,� she said.
Donald Gregg, a retired farm land owner in the Vermillion School District, said he will face increases in both his owner-occupied and agricultural real estate taxes if the opt-out is approved.
�It�s time to put a stop to this out-of-control, open checkbook school board,� he said.
Gregg doesn�t recent reports showing that the school budget has been reduced by over $1 million since 2001.
�They haven�t cut the budget at all,� he said. �It�s all been smoke and mirrors. It�s a circus act they�re going through, and just as soon as the opt-out is approved, they will forget all that stuff they put in the paper.�
Gregg believes USD should be separated from the rest of the community come Tuesday. Professors and other university staff, he said, �have got the students all primed so they are just waiting to vote for that. The students don�t have any sense, they don�t pay any real estate taxes, but their vote counts just as much as mine,� he said.
Swanson noted that school districts, like Vermillion�s, have depleted their general fund balances, that, a decade ago, helped maintain cash flow and earned interest to help pay for some programs.
Gov. William Janklow ordered schools to spend down those reserves on teacher salaries, which is a recurring cost.
�School districts knew this, but Janklow said, ?don�t worry, I�ll be there for you. As your general fund dwindles, I�ll be there to provide revenues to keep those expenditures going.� Well, that hasn�t happened.�
An $800,000 annual opt-out for five years will help the school district maintain programs, Swanson said. That figure is based on an assumption that expenses will grow by 3 percent annually, state aid will grow by 2 percent annually, and enrollment will decrease by five students annually.
�Five students per year is an optimistic number,� she said. �We�ve been losing close to 20 students per year.�
If the opt-out fails, Paddy Rosdail, the president of the PTA, questions how long her family can remain in Vermillion.
�What scares me is I would be living in a state that does not look at education as a priority,� she said. �Pierre isn�t moving on it. I�ve gone to every school board meeting and we�ve worked our tails off on the opt-out.
�I love Vermillion, but I can�t sacrifice my child�s education (if the opt-out fails),� Rosdail said.