WHY NOW?
Lake Country School District, like 90% of districts in the State of Wisconsin, has continued to see lower enrollments over the last 10 years. The funding to support the award-winning education and service to students and families has not kept pace with the District’s continuing needs.
Since the funding has not kept pace, the District has continued to maintain resource levels through the usage of their fund balance (savings account) to balance the budget each of the last 8 school years.
What is the District's Fund Balance?
The District’s fund balance has been spent down to approximately 5% of the overall budget. The general rule of thumb is to maintain a fund balance near 20%-25% of the overall budget.
At a 20%-25% fund balance, district’s are generally able to cover short-term deficits for such areas as payroll without having to go out and borrow money.
At a 5% fund balance, there is little to no flexibility for covering deficits.
If the District depletes its fund balance and operates in a deficit spending situation, the Wisconsin Department of Public Instruction will likely intervene in the District’s operations.
Fund Balance History
Since 2014-2015, Lake Country has adjusted their Fund balance down to cover operational costs from 19.29% of the overall budget in 2014-2015 to 5.20% in the 2023-2024 school year.
State Aid Funding
Lake Country receives a very low amount of state aid each year. Since the amount of state aid is so low, costs for operating the District are largely placed upon local taxpayers.
Lake Country Schools has received the following in State Aid:
Lake Country Schools has received the following in State Aid:
2017-2018 ➜ $29,004
2018-2019 ➜ $32,825
2019-2020 ➜ $37,310
2020-2021 ➜ $28,921
2021-2022 ➜ $27,392
2022-2023 ➜ $23,283
Lake Country Schools, in the State of Wisconsin funding formula, is considered to have a large property valuation. Having a larger property valuation is positive for district residents given that the tax burden for local property owners is then reduced by the larger property valuation. BUT unfortunately, this affects the school district’s ability to receive state aid funding in an inverse way.
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Funding has not kept pace due to inflation
District Mill Rate History and Comparison
Lake Country School District receives the lowest Mill Rate compared to surrounding school districts.
Why is the Fund Balance So Important?
The Fund Balance is an important factor for all schools in that it serves for a variety of purposes:
Provides an ability to cover shortfalls in the district budget (usually involving payroll) based upon when the district receives certain taxing authority and state aid payments throughout the year.
District budgets run on a fiscal year that starts on July 1 and ends on June 30 of the following school year.
Given our small aid payment, our first noteworthy revenue comes in the form of taxes in late January where we receive approximately 40% of our tax levy, leaving us to operate for more than half the budget year without any significant revenues.
Allows the District to increase their potential borrowing capacity through a higher bond rating.
Reduces the need to short-term borrow for yearly expenditures if there is an amount sufficient to cover those expenditures. The fund balance can then be restored once payments to the district are received.
Serves as a fund from which any potential emergency expenditure (major Mechanical replacement due to malfunction) can be adjusted to ensure smooth school operations.
Provides a method to cover potential small budgetary shortfalls should they arise.