The Cambridge-Isanti Schools will be asking district voters to swallow a bitter pill this November, and there’s just no way for them to sugarcoat it. By a unanimous vote, the board approved putting an operating referendum question on the upcoming Nov. 3 general election ballot asking voters to approve providing the district with initially $800 per student for the next three years, with the amount increasing to $1,200 per student starting in 2024.
“We are now faced with two options,” Superintendent Dr. Nate Rudolph told the board. “One, seek voter approval for local funding through a local operating referendum, or two, implement a third year of budget reductions - another $1.7 million for the fiscal year 2022, with subsequent cuts to contain costs for the next three years and beyond.”
Why a referendum
Finance Director Chris Kampa reminded the board that in large part because the district doesn’t currently have an operating referendum, they are currently far behind most districts in revenue per student. According to financial reports, C-I is currently 304th out of 330 districts in the state in total revenue per student.
“We receive $1,200 less per student than the average district,” Kampa said. “While our district does a great job in doing more with less, the task is becoming more difficult to maintain the level of education we need to provide to our students.”
Currently, only 9% of the district’s revenue comes from local taxes, compared to 20% for the average district.
“No one is making up that 11% gap,” Kampa said. “Those are funds our district is doing without. And without a local operating referendum, we are more dependent on state funding, and the state is an unreliable partner.”
Kampa went on to explain that over the last several years, the state’s increases in school funding hasn’t even kept up with inflation. Additionally, with the state currently incurring a multi-billion dollar deficit, he didn’t anticipate state funding to increase at all in the coming years, with the possibility of the state at least temporarily withholding some funding altogether.
Because of that shortage in funding, the district over the last two years has made budget reductions in the total amount of $7.5 million, which according to Kampa is around 10% of their total budget.
“For far too long, we have depended on decisions made in St. Paul to direct our future,” Kampa said. “But right now, we cannot rely on the state. Our only option is a local decision to prioritize our local schools.”
“We have cut the fat, cut the muscle, and now we are cutting bone,” added Rudolph.
Cost to taxpayers
According to Kampa, the district intentionally structured the referendum to include the two different per student levels of initially $800 per student and then $1,200 per student in 2024.
“This allows us to shore up our finances in the short-term, add back programs slowly and responsibly, and stretch those funds as far as they will go,” Kampa said. “We are only asking for what we need, and when we need it.”
Additionally, Kampa said some of the district’s debt service levy is set to decline, meaning the decrease in taxes from debt service in 2024 will mostly offset the increase in the operating referendum.
Specifically, Kampa said a successful referendum vote would increase the taxes of an average property value of $200,000 by approximately $25 per month. In 2024, that amount would increase by another $15 per month, for a total of $40 per month.
This increase in taxes, plus $103 per student that the state would subsidize of the $800 per student, would provide the district with an additional $4 million a year for the first three years, which would increase to $6.1 million a year starting in 2024.
What is an operating referendum?
Many school districts, including most notably North Branch and Mora, have asked voters to approve a bond referendum for the district, which is different than an operating referendum. With a bond referendum, the district is asking residents to approve an increase in taxes in order to pay off a bond (loan), which the district wishes to take out in order to cover new costs associated with things such as construction of a new building or adding on or improving existing buildings.
With an operating referendum, the additional money is only spent as it comes in and is used for day-to-day operations of the district such as teacher and staff salaries, supplies, and utilities, just to name a few. This extra money will help in reducing class sizes and allowing the district to maintain exceptional curriculum and other services for the students. The district emphasized this money will not be used for new or expanding school buildings.
Why now and what if it fails?
Rudolph said during the last budget cuts, the district was asked by some residents about the possibility of an operating referendum.
“As administrators, we have wrestled with this,” Rudolph said. “We know we are in the middle of a pandemic. And this year is a Presidential election, and we expect it to be a loud campaign. But we know the alternative. We know if we don’t ask, we are faced with (at least) $1.7 million in another round of budget cuts. And we all know that would not be good for kids.”