Lawmakers Seek to Eliminate or Limit Tool that Lets School Districts Save Money

Tuesday, August 15, 2017 at 3:44 PM by

A provision included in the proposed state budget would restrict school districts from exceeding their state-imposed budget caps in order to fund money-saving energy efficiency improvements.

Currently, the state sets a limit on how much money each school district can spend through the combination of state aid and property taxes, although voters in a district can override the spending limit by approving a referendum. The hurdle is lower when the district wants to temporarily lift the district’s budget cap to allow for spending on energy efficiency projects that save the school district money: only the approval of the school board is needed. The school board must specify the payback period after which the district is expected to recoup its investment in the upgraded facilities.

Exceeding the budget caps set by the state to fund energy efficiency projects has two advantages for school districts: It enables them to raise the resources needed to make improvements to school buildings, and it saves school districts money in the long run. School districts may only exceed their revenue limits for efficiency projects that reduce energy or operational costs.

Since 2009, 186 districts have used this ability to temporarily exceed their budget caps, funding 501 different energy efficiency projects like replacing boilers, improving insulation, and upgrading windows. Those projects represent $1.3 billion in energy-saving investments that have resulted in lower costs for school districts. The map below shows districts that have used this exemption to reduce costs. (Readers receiving this post via email will need to go to our website for additional map functionality.)

Some lawmakers want to eliminate or restrict the ability of school districts to exceed their revenue limits to fund energy efficiency projects. The state’s two-year budget – which was supposed to have been settled by the end of June – is still in flux, but most of the competing proposals that lawmakers are currently considering would make it harder for districts to save money by improving their energy efficiency. The education budget proposed by Governor Walker would eliminate the ability of school boards to approve an increase in the budget caps for energy efficiency projects, and the Senate version of the budget would put a two-year moratorium on these projects. It’s not clear whether the Assembly version of the budget includes any restrictions on energy efficiency exemptions.

Under these proposals, districts would only be able to raise additional resources for energy efficiency projects by holding a referendum, and by bearing part or all of the costs of holding the election. The goal of implementing energy efficiency projects is to save districts money; forcing districts to spend additional money on holding elections in order to save money would increase the length of the payback period for the energy efficiency projects. Also, many of the energy efficiency projects are small, and the costs of holding a referendum may not be proportionate to the size of the project. Examples of small projects that may not be cost-efficient if the district has to bear the cost of the election include:

  • $8,000 in Friess Lake to replace lightbulbs. The district anticipated recouping its costs within three years due to lower energy costs;
  • $11,000 in Riverdale to install lights that turn off when no one is around; and
  • $14,000 in Eleva-Strum to replace the 30-year old HVAC system in the technology education area.

The energy efficiency exemption allows districts to make investments that lower costs, thereby providing the same services to students for less money. Eliminating or restricting the energy efficiency exemption will increase the amount of money it costs to educate Wisconsin schoolchildren. Lawmakers who want school districts to curtail their spending should refuse to go along with ending the exemption for energy efficiency projects.

Tamarine Cornelius

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