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Shrink or swim: Blackhawk Tech considers asking taxpayers for more

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Frank Schultz
December 7, 2013

TOWN OF ROCK—A survey sent last week to 8,000 registered voters will help Blackhawk Technical College officials decide whether to hold a $4 million referendum.

If officials like what they hear, they'll ask voters for permission to exceed the school's levy limit by up to $4 million every year. That would raise taxes as much as $37 on a $100,000 house each year.

Despite $2.3 million in cuts and savings already in place, Blackhawk Tech would fall about $3 million short of covering operational expenses every year without the ability to tax more, officials said.

The surveys were mailed last week to a random sampling of voters in Green and Rock counties. Officials are asking for responses by Monday, Dec. 16.

The Blackhawk Tech Board will hear an analysis from referendum consultant School Perceptions at its meeting Thursday, Dec. 19. No decision will be made immediately.

What's at stake, officials said, is the future of the college: Will it have the resources needed to continue producing workers ready for local jobs and boosting the economic recovery, or will it be forced to shrink its services?

“If you receive one of these (surveys), don't think it's junk mail. Take the time to read it,” said Kelli Cameron, director of the Blackhawk Technical College Foundation.

The foundation is paying for the survey, not taxpayers.

Officials did not have immediate plans for cuts in case a referendum is not held, or if one fails.

“We are in the process of identifying the areas and services where we will shrink, should this be necessary, said Renea Ranguette, Blackhawk's vice president for finance and operations.

The district board would not necessarily levy the entire $4 million increase every year, Blackhawk President Tom Eckert said, but the ability to increase taxes up to the new limit would continue indefinitely.

Eckert would not say what percentage of positive survey responses is needed to trigger a referendum. The question will be whether officials think they can convince enough voters to vote for a referendum, and that will include how many voters' minds they think they could change.

Officials are considering a referendum on the date of the spring election, April 1.

Losses of state aid and changes in state law in recent years have brought the college to this point, officials said.

For many years, tech college tax levies were capped at $1.50 per $1,000 of property value. Blackhawk for many years did not levy the maximum tax allowed, Ranguette said.

Then in 2011, state lawmakers froze tech college levies at their 2010 levels. Blackhawk was stuck at a taxing level that was $1.36 million below what it could have levied under the old system. That limit remains in effect and isn't expected to change.

Meanwhile, state aid to technical colleges shrunk 30 percent, officials said. For Blackhawk, that was a loss of $1.5 million each year.

This year's operational budget is $31.62 million, and that includes a $2.17 million from district reserves.

The school can't continue to draw from reserves, officials said. Reserves need to be kept at a level that will stave off short-term borrowing to handle cash-flow shortfalls.

The district is taxing residents $20.74 million this year. That's an increase of 1.6 percent increase from last year. Most of the increase was not for operations. It was to remodel the new Advanced Manufacturing Training Center, which will open in Milton next year.

The state-imposed levy freeze does not include taxes to service debt. Also exempt from the freeze is additional taxes generated from new construction in the tech school district, which amounted to an additional $115,000 in revenue this year.

Ranguette estimates a budget gap of around $3 million for every foreseeable year. The $4 million referendum amount would give the college flexibility to tax higher, if needed.

Officials said they have worked in recent years to make ends meet, taking money-saving measures that include:

-- Suspending the aviation mechanics program, $370,000.

-- Reducing the number of student slots in the electric power distribution course, cutting a leadership program and an office systems technology position, $270,000.

-- Cutting two deans, a coordinator and other positions, $372,000. 

-- Closing the central-campus day care center, $72,000.

-- Employees paying into their pension fund, as required by the recent change in state law, for a $1 million savings.

-- Employees, who hadn't previously paid part of their health-insurance premiums, in January start paying 3 percent for the lowest-cost plan if they complete a wellness program. Those choosing higher-cost programs will pay more.

The savings add up to $2.3 million but are not enough, officials said.

The district also has added programs in student services, such as better academic advising, career preparation, tutoring, teaching soft skills that employers value, more internships and encouraging more enrollments directly out of high school.

Officials also want to be able to open up new course sections when workers and employers need them.

For example, Blackhawk has accommodated local needs in programs such as welding, which now run from 6 a.m. to 9 p.m., plus Saturdays, Eckert said, “and it takes operational costs to make that go.”

Enrollment is declining on a full-time-equivalent basis, Cameron said, but Blackhawk is seeing more students than before because more are attending part-time while working part-time jobs as the economy improves.

One thing officials haven't cut or frozen is wages, something that has happened in the public and private sectors in recent years.

Eckert said a wage freeze would hurt the college's quality because instructors and other positions are recruited nationally, and eventually, the quality of job candidates would suffer.

Some have asked why the college doesn't raise tuition to cover costs, but it can't do that, Cameron said. Tuition, which is the same statewide, is set by the state technical college system board.

Tuition and fees account for 28 percent of operational expenses. Local taxes pay 54 percent. State aid covers 10 percent. The rest is grants and other revenues.

Blackhawk's last referendum was for $17.5 million in 2002. It paid for building expansions, mostly at the central campus.

Cameron said district residents were right to approve that referendum. It helped the school handle the enrollment surge after hundreds of laid-off workers sought retraining in the wake of the closing of the Janesville GM plant six years later, she said.

Now, “if a new business comes to town, and we have to train a lot of workers, will we be in a position to do that?” Cameron said. 

“We've been working hard to make BTC a major part of the economic recovery, and we want to keep going. We don't want to get smaller,” Eckert said. “We want to keep things rolling. But we've run into this operational crunch. … And we really need people to give us an honest assessment on that survey so we know where we stand.”



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