District looks to use tax exemption before Walker's 1,000-year ban hits

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BELOIT - The School District of Beloit board is considering using a controversial financing tool that was banned for a thousand years by Gov. Scott Walker with his state budget vetoes.

The district is looking at the revenue limit energy exemption - a tool it has employed several times in past years - to raise money in next year's 2018-2019 budget before the financing tool expires. Walker's ban takes effect in January.

At its Tuesday evening meeting, the board unanimously voted to have administration seek requests for qualifications (RFQs) for projects at four schools. The administration will bring back the RFQs and make a recommendation to the board on which contractor and projects to move forward with in mid-November. The revenue limit exemption process would require the board to approve any projects prior to the end of the year.

Energy efficiency projects are paid for by a revenue limit exemption to allow higher tax collections through the Department of Public Instruction. The state exemption accommodates spending deemed to improve energy efficiencies, and approved projects are reimbursed approximately 80 percent the following year through state equalization aid.

But Walker, using his strong line-item veto power, took issue with the program in the 2017-2019 state biennial budget, prohibiting the practice after Dec. 31, 2017.

In his veto message, Walker used his authority to block such exemptions from Jan. 1, 2018 until after December 3018 - a thousand years.

Walker said school districts should be required to use referenda to bypass revenue limits. He said taxpayers should have a direct voice when large property tax increases are under consideration. The veto, he said, eliminates an exemption he views as a loophole used to raise property taxes.

Executive Director of Business Services Jamie Merath said the following projects are energy efficiency recommendations of the most immediate concern: heating and air-conditioning at Hackett and Merrill elementaries; boiler replacement at Todd Elementary; air handler replacement and conditioning at Cunningham.

The various projects range in price from $350,000 to $3 million.

Board member Dennis Baskin said the danger of not using the financing  tool is that a boiler could break costing $350,000. Merath also noted a boiler unexpectedly going down could interrupt instruction. 

"Poorly maintained buildings can result in interruption to student instruction as well as negative impacts to the district's operational budget," board president Laurie Endres said. "Some of these projects include infrastructure issues that are well over 90 years old and past their life expectancy."

"We did a revenue limit energy exemption this year, so what we get back from the state will offset any one that we do next year because these are reimbursed at 80 percent by the state," said board member Pam Charles. "Taxpayers need to know that after we do this last one, the reimbursement will go directly to offset the amount of their property taxes the following year."

The school district is spending $3.26 million for energy efficiency projects at Converse, Gaston, Robinson and Aldrich Intermediate School during the 2017-2018 year. The previous year, the district spent $1.65 million on energy efficiency exemptions.

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