April 7 school referendum results indicate positives for jobs and the COVID-19 economic recovery
April 7, 2020 was a big day for Wisconsin and Madison’s business community. The election decided legislative and judicial leaders, but perhaps more important, provided us with an indicator of where our confidence is relative to the future of the overall economy and our desire for economic health within our communities. That indicator comes via school referendums. Statewide, 48 districts asked voters for approval for increased spending for operations or construction.
I work with school district leaders throughout Wisconsin. Many rely on my input regarding when to ask taxpayers for approval of construction spending. Consequently, I view the April 7 school referendums as an indicator of where consumer confidence may be during the first few weeks of the COVID-19 economy, as well as how people may view the opportunity for an economic recovery from COVID-19.
Traditionally in Wisconsin, both the quantity of school referendums on the ballot and the approval of those referendums track closely with consumer confidence. As consumer confidence rises, an increase in the approval of school spending requests tend to follow. During the Great Recession of 2008–09, statewide referendum results slumped significantly by historical standards, dipping close to a 50 percent approval rate, as consumer confidence took a hit.
However, over the last six years referendums have been approved by taxpayers at historically high rates, peaking at $1.6 billion in spending approvals statewide in 2016. During the April 2019 election, statewide referendums to increase district operating budgets had an 85 percent approval rate, while referendums for construction spending had a 61 percent approval rate.
Historically, higher turnouts favor the approval of referendums, especially in urban districts. Dane County's turnout for the April 7, 2020 election was higher than the April 2019 election, which also featured a Supreme Court race. The presidential primary likely fueled some of the additional turnout. However, voter turnout in Dane County appears to have been down by double-digits as compared to the 2016 presidential primary.
Statewide, some major bellwethers seem to indicate consumer confidence remains fairly strong, despite record unemployment, tremendous uncertainty in the business community, and a looming recession. Milwaukee Public Schools, the state's largest school district, passed its $87 million operating referendum with 78 percent approval. It was Milwaukee’s first referendum on the ballot since 1993. Racine Unified School District’s referendum, both the largest (just over $1 billion) and longest (30 years) referendum in state history, was approved, albeit by just five votes out of over 33,000 votes cast (after failing in three out their last four referendums).
Locally, school districts saw generally positive results, but uncertainty remains. The Columbus School District passed its $30 million referendum for construction with 64 percent approval after failing five previous referendums dating back to 2007. Fort Atkinson and Parkview Schools received approval for operating referendums. However, Cambridge was denied approval by voters for both operations and construction of a new performing arts center after previously passing its last six referendums dating back to 1996.
Citing economic uncertainty, the Madison Metropolitan School District has decided to wait until as late as August to determine if it will place a $317 million construction referendum and $33 million operating referendum on the Nov. 3 general election ballot.
In school districts where referendums were approved, were voters motivated to do so because they believed the local economy needed economic stimulus in the form of construction spending or increased operating budgets to help their communities get over the economic damage done by COVID-19? That was certainly a motivator for some. Anecdotally, people are looking for ways to strengthen the economy, and referendums provide one of the few forms of direct control of significant, local economic stimulus by taxpayers.
Most people make decisions that they believe directly impact their own or their family’s quality of life. Since 2015, surveys of Wisconsin taxpayers have consistently indicated a majority believe increasing spending on schools is more important than reducing property taxes. I believe the continuing tendency by taxpayers to support increased school spending, coupled with consumer confidence remaining somewhat strong and people wanting to stimulate their local economy, proved to be beneficial to the passage of school referendums both locally and statewide.
Our next opportunity to gauge consumer confidence via school referendums may be the Aug. 11 primary; however, there is likely to be a very small sample size. I would expect a surge of referendums on the Nov. 3 general election ballot and will be eager to evaluate the results.
The bottom line is the school referendum results of the April 7 election are positive for education, will create or sustain jobs across multiple industries, and ultimately benefit business and the economy — all contributing to the economic recovery from COVID-19.
Kevin Hickman is senior vice president of C.D. Smith Construction.
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