School revenue limit referendums narrowly pass in April election

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More voters turned down referendums to allow schools to exceed their revenue limits after the April election, bucking a decade-long trend of referendums passing by a wide margin.

Wisconsin residents faced 83 referendums to decide whether schools could raise revenue limits across the state, according to data obtained from the Wisconsin Department of Instruction (DPI). Many of the referendums were meant to cover operating costs and school maintenance, but some referendums would have funded projects such as entirely new school facilities and buildings.

A total of 37 referendums failed and 46 passed after the April 4 election, DPI data showed. That’s a 44% failure rate, or a 55% pass rate compared to nearly 80% of referendums passing in November of 2022.

Referendums for construction specifically were slightly more optimistic, with 18 of 29 asking for the issuance of debt bonds passing. The passage rate for construction-related referendums was 62% in April.

The rate impacts potential projects such as a $36.8 million project for a new gymnasium, music classrooms and cafeteria additions at a high school in Oconomowoc. The most expensive referendum was $99.5 million which asked voters to fund district-wide school building and facility improvement projects, DPI data showed. Referendums for both projects didn’t pass in the last election.

The potential effects of not winning those referendums may lead school districts to a fiscal cliff sooner than later, Wisconsin Association of School Boards government relations director Dan Rossmiller told The Daily Reporter. Revenues haven’t adjusted for nearly the past decade, and what has adjusted hasn’t kept up with the 7% inflation rate, he added.

“(School districts are) getting to the point now where if the district doesn’t pass the referendum, they fall off a good-sized cliff in terms of spending authorized before and spending that is no longer there because the referendum failed. I suspect the increasing amounts may be causing some voters to bawk at supporting those increases. After all, this is one of the few chances voters get to say no to higher taxes,” Rossmiller said.

With inflation and a possible recession looming, people may be watching their pocketbooks more closely and feel like they must decide between supporting themselves in addition for more money for schools, Rossmiller added. It’s possible voters may have felt more driven by issues on the ballot for issues like abortion and gerrymandering ahead of the Wisconsin Supreme Court race, making revenue limits secondary in some cases.

In construction, schools and local governments are typically a source of stability for contractors when the economy is lagging, Rossmiller noted.

“Some people at the Federal Reserve suggested later this year we’ll dip in a recession that will probably last for a year or two. Those referendums for construction and remodeling for debt issuance will provide jobs for people in the industry. Those projects are approved and presumably will go forward,” Rossmiller said.

However, some voices in the Legislature said construction and consulting firms will still be able to find work easily among Wisconsin schools districts.

“The overall passage rate for school district referendums (capital and operating) on the April 4 ballot declined relative to past elections. Nevertheless, the consulting and construction firms who stand to benefit from the no-bid contracts that only school districts are allowed to offer have continued to tout their ability to help get referendums passed and indicated,” State Sen. Duey Stroebel, District 20, told The Daily Reporter.

“Voters are keeping a watchful eye on how their tax dollars are being spent. It will be interesting to see if this trend continues into the future,” Stroebel added.

According to the Wisconsin Policy Forum, 2022 had the third highest rate of school referendum passage since 2000, behind 2018 and 2020. This marked a trend of increasing passage rates for capital and operating referenda in recent years, the Forum said.

Only fewer than a quarter of referendums passed twenty years ago, making April’s election passage rate of around 55% double that, the Forum added.

“It’s worth noting that since about the mid-2010s, odd-numbered years have seen comparatively lower passage rates than even-numbered years. In 2021, the passage rate dipped to 60%,” according to the Forum.

Even-numbered years with midterm and presidential races usually generate higher voter turnout, the Forum noted. “This changes the electorate in a way that, at least in recent Wisconsin elections, has favored referendum passage,” Forum officials said.