MADISON, Wis. – An obscure state law has cost taxpayers in school districts statewide tens of millions of dollars while circumventing voter input.
Since 2009, 147 school districts have spent a combined $138 million above state-imposed revenue limits without approval of voters through referenda, according to a new study by the Wisconsin Taxpayers Alliance.
The spending is thanks to a 2009 measure, signed into law by Democrat Gov. Jim Doyle, that allows the state’s 424 K-12 school districts to exempt energy efficiency expenditures from state revenue limits. The law, unknown to most but school accountants and administrators, was little used for the first four years of its existence, the WISTAX analysis found. Annually, no more than 35 districts used the exemption, and the total expenditure did not top $9 million.
Things changed after 2012, however, WISTAX reports.
In the 2013-14 school year, 53 districts spent $22 million beyond the revenue limits. The next year, 81 districts spent $37 million without voter consent; and in 2015-16, 105 districts – about one in four – claimed $49 million in energy exemptions beyond the limits.
In the past three years, 111 K-12 districts have used the exemption 239 times to spend a total of $108 million above revenue “caps,” according to the Taxpayers Alliance report.
WISTAX President Todd Berry said he is hearing questions from the public and press about the escalating use of the energy efficiency exemption.
“First, why should districts take unilateral action to exceed state revenue limits when voters are willing to approve most requests? And, second, is there need for an energy efficiency exemption if such projects promise, as they must, budget savings?” Berry said in a statement.
Voters in a majority of school districts have approved referenda asking to exceed revenue limits. The approval rate has risen from 52 percent in 2000 to 70 percent in 2010-11 and to 81 percent in 2015-16, according to WISTAX.
But Wisconsin’s school boards have fought a bill aimed at ending the exemption.
“School districts undertake energy efficiency projects primarily to reduce energy consumption and energy-related costs. The legislature exempted the cost of certain qualifying energy efficiency projects from the revenue limits because it encourages school districts to undertake these cost-saving projects sooner rather than later,” the Wisconsin Association of School Boards wrote in “talking points” opposing the legislation.
Critics have raised questions about potential abuses of the energy efficiency program, including whether some of the projects may be unnecessary.
As the WASB noted, the state Department of Public Instruction has issued emergency rules designed to “bring greater transparency to energy efficiency projects by requiring school boards to document how much energy each change within the project will save.”
“The new DPI rules also clarify that the cost savings resulting from the energy efficiency measures undertaken must equal or exceed the expenditures,” the WASB talking points note.
Under current law, districts must report how much they are going to spend and guarantee a minimum by which energy or operation costs will be reduced over the life of the facility, said Dale Knapp, research director for the Taxpayers Alliance.
The bill to eliminate the exemption, sponsored by Rep. Adam Neylon, R-Pewaukee and Sen. Frank Lasee, R-De Pere, stalled in the Legislature in the last session.
A legislative aide said the bill is dead for now, but concerns remain about how the exemption is being used.
Sources told Watchdog that the 2009 law was written by contractors — who, not coincidentally, have made a bundle working on projects made possible by the referenda exemption.
Knapp said the spike in the number of projects could, in part, be a result of larger school districts taking on more projects. He said the increase also might be occurring because administrators from participating school districts are spreading the word about the unconstrained revenue source.
Contractors looking to build business may be doing the same.
“In a way, the pattern at this point … is kind of like 4-year-old kindergarten. It started slow, then districts realized if they got in early enough it helped them with their revenue limit, it helped them with state aid,” Knapp said. “You saw more and more districts that, while they saw the educational benefits, also saw evidence on the financial side.”
With the tightening of revenue caps in recent years, the Legislature has given school districts greater flexibility to realize savings in some areas.
“This might be a legitimate area where districts can save money,” Knapp said of the energy efficiency exemption. “At the same time, we have to be very vigilant about it to make sure it’s not being abused.”
Since 2009, 147 school districts have spent a combined $138 million above state-imposed revenue limits without approval of voters through referenda, according to a new study by the Wisconsin Taxpayers Alliance.
The spending is thanks to a 2009 measure, signed into law by Democrat Gov. Jim Doyle, that allows the state’s 424 K-12 school districts to exempt energy efficiency expenditures from state revenue limits. The law, unknown to most but school accountants and administrators, was little used for the first four years of its existence, the WISTAX analysis found. Annually, no more than 35 districts used the exemption, and the total expenditure did not top $9 million.
Things changed after 2012, however, WISTAX reports.
In the 2013-14 school year, 53 districts spent $22 million beyond the revenue limits. The next year, 81 districts spent $37 million without voter consent; and in 2015-16, 105 districts – about one in four – claimed $49 million in energy exemptions beyond the limits.
In the past three years, 111 K-12 districts have used the exemption 239 times to spend a total of $108 million above revenue “caps,” according to the Taxpayers Alliance report.
WISTAX President Todd Berry said he is hearing questions from the public and press about the escalating use of the energy efficiency exemption.
“First, why should districts take unilateral action to exceed state revenue limits when voters are willing to approve most requests? And, second, is there need for an energy efficiency exemption if such projects promise, as they must, budget savings?” Berry said in a statement.
Voters in a majority of school districts have approved referenda asking to exceed revenue limits. The approval rate has risen from 52 percent in 2000 to 70 percent in 2010-11 and to 81 percent in 2015-16, according to WISTAX.
But Wisconsin’s school boards have fought a bill aimed at ending the exemption.
“School districts undertake energy efficiency projects primarily to reduce energy consumption and energy-related costs. The legislature exempted the cost of certain qualifying energy efficiency projects from the revenue limits because it encourages school districts to undertake these cost-saving projects sooner rather than later,” the Wisconsin Association of School Boards wrote in “talking points” opposing the legislation.
Critics have raised questions about potential abuses of the energy efficiency program, including whether some of the projects may be unnecessary.
As the WASB noted, the state Department of Public Instruction has issued emergency rules designed to “bring greater transparency to energy efficiency projects by requiring school boards to document how much energy each change within the project will save.”
“The new DPI rules also clarify that the cost savings resulting from the energy efficiency measures undertaken must equal or exceed the expenditures,” the WASB talking points note.
Under current law, districts must report how much they are going to spend and guarantee a minimum by which energy or operation costs will be reduced over the life of the facility, said Dale Knapp, research director for the Taxpayers Alliance.
The bill to eliminate the exemption, sponsored by Rep. Adam Neylon, R-Pewaukee and Sen. Frank Lasee, R-De Pere, stalled in the Legislature in the last session.
A legislative aide said the bill is dead for now, but concerns remain about how the exemption is being used.
Sources told Watchdog that the 2009 law was written by contractors — who, not coincidentally, have made a bundle working on projects made possible by the referenda exemption.
Knapp said the spike in the number of projects could, in part, be a result of larger school districts taking on more projects. He said the increase also might be occurring because administrators from participating school districts are spreading the word about the unconstrained revenue source.
Contractors looking to build business may be doing the same.
“In a way, the pattern at this point … is kind of like 4-year-old kindergarten. It started slow, then districts realized if they got in early enough it helped them with their revenue limit, it helped them with state aid,” Knapp said. “You saw more and more districts that, while they saw the educational benefits, also saw evidence on the financial side.”
With the tightening of revenue caps in recent years, the Legislature has given school districts greater flexibility to realize savings in some areas.
“This might be a legitimate area where districts can save money,” Knapp said of the energy efficiency exemption. “At the same time, we have to be very vigilant about it to make sure it’s not being abused.”
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