LEAVE IT THERE.

THANK YOU VERY MUCH.

>> THANK YOU VERY MUCH.

>> JUST BEFORE THE APRIL ELECTION WE REPORTED ON THE RISE OF SCHOOL DISTRICTS AROUND THE STATE GOING TO REFERENDUM FOR OPERATING EXPENSES.

IN FEBRUARY AND APRIL VOTERS APPROVE 41 OPERATING REFERENDUM, THE BIGGEST 250 BILLION A YEAR FOR MILWAUKEE PUBLIC SCHOOLS BUT A NUMBER OF DISTRICTS FOUND REQUESTS DENIED.

THE TWO WE PROFILED, FORT ATKINSON AND RICHLAND, SAW THEIRS PASSED.

SENIOR POLITICAL REPORTERS AT SCHULZ TELLS US THEY USED THE SAME METHOD TO MAKE THEIR REFERENDUM LOOK MORE APPEALING TO VOTERS PROMISING THE TAX INCREASE WOULDN'T COST THEM ANYTHING.

>> IN THE RUNUP TO ELECTION DATE THE FORT ATKINSON SCHOOL DISTRICT HELD A PUBLIC INFORMATION SESSION ON THE REFERENDUM.

REFERENDUM PROVIDES THE DISTRICT TO USE FUNDS DIFFERENTLY.

>> THE DISTRICT WAS TELLING VOTERS THE OPERATIONAL REFERENDUM WOULD LET THEM LEVEE ADDITIONAL 6.5 MILLION A YEAR FOR THREE YEARS TO AVOID MORE CUTS BUT IT WAS PROM MISSION VO PROMISING VOTERS IT WOULD NOT RESULT IN TAX INCREASE.

>> I WANT TO MAKE SURE I HAVE FIGURES STRAIGHT BECAUSE I'M HAVING TROUBLE RELATING.

>> A LOT OF CONFUSION.

>> I'M AFRAID I DON'T UNDERSTAND THE CONNECTION.

>> HERE IS THE AMOUNT IF THE ATKINSON RECEIVES FROM PROPERTY TAXES.

THEY COULD PROMISE 6.5 MILLION INCREASE FOR THE NEXT ATHLETE YEARS WOULDN'T INC BECAUSE THEY RAISED LEVEE BY 7 MILLION THE YEAR BEFORE TO PREPAY A CONSTRUCTION LOAN CALLED DEFEASANCE.

IF THE REFERENDUM PASSED THEY WOULD GO BACK TO PAYING THE NORMAL PAYMENT IN FUTURE YEARS.

DEFEASENCE IS PREPAYING INTEREST.

ABBOT SAYS AFTER THE REFERENDUM FAIL ED THE PRIOR YEARS THE SCHOOL BOARD DECIDED TO RAISE LEVEE TO PREPAID DEBT.

>> THE IDEA OF DEFEASANCE OR PREPAYING DEBT IS DIFFICULT FOR PEOPLE TO UNDERSTAND BUT DEFINITELY IS A STRATEGY THAT IS A LONG-TERM BENEFIT TO THE TAXPAYER.

IN OUR CASE IT EQUATES TO AROUND 3.4 MILLION IN SAVINGS OF INTEREST OVER THE TERM OF THOSE 20-YEAR BONDS.

>> BUT THE SCHOOL BOARD MEMBERS CLEARLY DIDN'T WANT TO SAY THEY HAD ALREADY RAISED TAXES ON THEIR OWN.

THEY DESCRIBED IT AS NEEDING VOTER APPROVAL TO REALLOCATE FUNDS.

>> THEY ARE SAYING WE NEED MONEY TO MAINTAIN CURRENT PROGRAMMING WE HAVE.

WE CAN'T USE THAT FUNDING OVER THERE THAT WE USED TO PREPAY THE DEBT.

>> IT REALLY WASN'T SINKING IN.

>> OF THAT PREPAID 7 MILLION ONE-TIME PAYMENT, THEY ARE SEEKING PERMISSION TO SHIP 6.5 MILLION THREE TIMES.

>> WE ARE LEVEEING THE SAME DOLLAR AMOUNT OVER EACH YEAR.

APPROXIMATE -- VOTER PERMISSION.

>> DOESN'T MATTER WHETHER WE VOTE YES OR NO.

YOU ARE STILL GOING TO JUST MOVE IT AROUND TH IS -- >> IN OUR BEST EFFORTS TO BE AS SIMPLE OR TO BE AS CONCRETE AS POSSIBLE WHEN TALKING ABOUT SCHOOL FINANCE, IT STILL IS VERY, VERY DIFFICULT FOR PEOPLE TO UNDERSTAND HOW ALL OF THAT WORKS.

DISTRICT AN INCREASE IN STATE AID A COUPLE YEARS AGO WOULD HAVE MEANT A DROP IN THE TAX RATE.

>> WE WANTED TO STABILIZE THAT MILL RATE AND USE THAT TO PRE-PAY SOME OF OUR EXISTING DEBT.

BOARD SAID THE SCHOOL DECIDED TO USE DEFEASANCE TO KEEP THE RATE THE SAME.

>> WE HAVE TAKEN AN 8.7 MILLION DEBT AND CUT DOWN TO JUST UNDER FOUR MILLION.

>> THAT HELPED THEM TO GET THIS TAX NEUTRAL AS WELL.

>> WE HAVE BEEN ABLE TO USE THAT GAP TO DO THIS OPERATIONAL REFERENDUM AT ZERO TAX IMPACT.

>> BOTH DISTRICT ADMINISTRATORS SAY THIS USE TO SET UP THE OPERATING REFERENDUM WAS KEY TO PASSAGE.

CAN LIVE WITHOUT SO WE ARE FORCED TO CREATE AN EFFORT THAT WILL HOP FULLY BE AS SUCCESSFUL AS POSSIBLE IN PASSING REFERENDUM.

REFERENDUM PASSED BY 139 VOTES.

FORT ATKINSON BY 79.

SOME NEIGHBORING DISTRICTS DIDN'T HAVE THE SAME RESULTS.

VOTERS IN MOSSTON REJECTED BY 480 VOTES.

VOTERS IN THE JEFFERSON SCHOOL DISTRICT REJECTED THEIRS BY 685.

BOTH MOSSTON AND JEFFERSON WERE ASKING FOR LESS MONEY THAN THEIR NEIGHBORS BUT EACH OF THOSE CAME WITH A TAX INCREASE.

SHOULD WE EXPECT TO SEE MORE DISTRICTS USING DEFEASANCE?

HAVE REFERENDUM DEBT FOR CAPITAL IMPROVEMENTS THAT THEY ARE TAKING OUT BONDS ON AND USE THAT STRATEGY TO STABILIZE THE MILL RATE.

IF THEY ARE NOT PASSING AN ADDITIONAL REFERENDUM THE ONLY WAY THEY CAN KEEP THAT TAX RATE STABLE OR WHERE IT HAD BEEN IS PRE-PAY DEBT, IF THEY HAVE DEBT.

BUT OF COURSE WHEN DISTRICTS RUN OUT OF DEBT THAT OPPORTUNITY EVAPORATES AS WELL.