Surprised college officials say they‘re unsure what to make of a budget provision that would let technical colleges raise revenue by increasing property taxes with referendum approval.
Property tax is the largest of three primary revenue streams for the Wisconsin Technical College System. The others are state aid and tuition and fees.
The Legislature’s Joint Finance Committee last week inserted the provision into the budget. It’s unclear, though, whether the gesture could help state technical colleges absorb the $71.6 million Gov. Scott Walker cut from them in his 2011-13 budget.
“I think we’re still trying to get our arms around how that would really affect the college,” said James Rehagen, manager of executive operations for Waukesha County Technical College.
The JFC’s move was unexpected because Walker had proposed placing a freeze on the property tax rate that could be levied between 2011 and 2013. State Sen. Sheila Harsdorf, R-River Falls, said the provision was meant to “allow for growth in their levy.”
Even with the change, though, Steven Decker, associate vice president of finance and business services for Wisconsin Indianhead Technical College, said he was not optimistic his school could use the provision.
“I think we’d have a very slim chance of passing a referendum,” he said. “We make up about 20 percent of the state and 11 different counties. To pass a referendum in all those counties would, I think, be virtually impossible.”
WITC, like other state technical colleges, has a waiting list for aspiring nurses. But the school also is scrambling to accommodate an influx of welders, whom Decker said had applied in greater numbers coinciding with an uptick in the manufacturing sector.
“We’re trying to ramp up quickly to meet that demand,” Decker said. “That’s what’s difficult — hiring staff and getting up and running.”
Decker projects a $2.3 million reduction in state money for WITC.
“We just don’t have enough resources to offer unlimited courses,” he said.
State Sen. Bob Jauch, D-Poplar, said the voter referendum provision amounted to “hocus-pocus.”
“I don’t even think they would use (referendum) for improving programs, and I don’t think they should have to,” Jauch said, adding he feared WITC would be unable to meet increasing demands in his district for welders and machinists.
But Kurt Nickel, a coordinator for Sheet Metal Workers J.A.C., said he hadn’t witnessed enough increase in demand for him to fret over potential program cuts at technical colleges.
“We rely on the technical college system for our apprenticeship program,” he said. “Of course, any cuts to that would affect how effectively we’re able to train our apprentices.”
On the other hand, though, Nickel said, there hasn’t been much of a need for training lately. His organization sent between 30 and 40 apprentices a year to technical colleges when times were good, Nickel said, but it hasn’t reached that level during the last three years combined.
“We’ve started three (apprentices) so far this year,” he said. “The amount of apprentices we’re starting is way down from what it normally is.”
Referendum is a familiar strategy for Madison Area Technical College, which last year secured $133.8 million from voters for construction projects. But asking again for money, this time to cover operating expenses, would be a tough sell for the college, said Roger Price, vice president for infrastructure at MATC.
“The effort that goes into presenting a referendum to a 12-county area — which would cost hundreds of thousands of dollars — is still very fresh in our minds,” Price said. “Although we were successful, we would have to weigh the advantages and costs.”
So far, Price said, he’s had “no conversations with our board” regarding another referendum. The Madison college, he added, has balanced its 2012 budget mostly by restructuring employee contracts. In following years, though, Price said, “We may have to revisit that.”
Likewise, Milwaukee Area Technical College wants to balance its 2012 budget without cutting programs, spokeswoman Kathleen Hola said. Although the school faces a $7 million reduction in state money, Hola said, it would take time before voter referendum could even be considered.
“There’s not a plan that’s been developed that could be instituted immediately,” she said, “and I don’t believe it’s been discussed.”
However the provision ends up in the state budget, Decker said, it would not be the result of popular demand.
WITC “anticipated some flexibility in our levy amount,” he said, but no one predicted the option for voter referendum would be the result.
Because of the sudden move, Decker said, it will take time for colleges to understand what it could mean, if anything.
“Because it happened so quickly late last week,” he said, “we haven’t had a chance to even discuss it.”