Educate All Students: Larry Miller's Blog

September 20, 2011

Milwaukee Labor Press Article Spells Out Need for Voucher Tax Transparency

Filed under: Vouchers — millerlf @ 11:14 am

Put truth of voucher tax on city bill, MPS asks

By Dominique Paul Noth
Editor, Labor Press
Posted September 18, 2011

The Milwaukee Public Schools board is requesting another group of elected officials, the leaders of the city of Milwaukee, to engage in a flagrant act of truth in advertising and transparency in government.

They are asking for city property tax payers to be told that 17% of what they think they are paying to MPS is never seen by MPS and is actually filling the gaping financial hole the state — with all its revenue streams – left in the private school voucher program.

MPS supporters of the idea emphasize that it’s not a case of raising taxes but telling the public where their tax dollars are really going.

It has long been the purpose of the end of the year tax bill – which includes an informational brochure — to allow anyone who owns property in Milwaukee to compare tax rates per $1,000 of assessed value levied by every unit of government involved. The bill also lists the citywide tax levies (before tax credits) by governmental unit, which last year put MPS first, followed by the city, the county, the tech college (MATC) and the sewerage district (MMSD). That’s supposed to be truth in advertising.

Wait until the largest property holders and the smallest house owner discover the reality most simply don’t know. An accurate lineup in 2010 would have reflected city first, dropping MPS to second by taking away more than $50 million, with the county third and then MATC neck and neck with the new transparency component, the Milwaukee Parental Choice Program (MPCP). Sewerage would lag far behind.

In a few months, given Gov. Walker’s changes and the last-minute manipulations of the legislature’s joint finance committee, MPCP will likely grow to a $53.4 million burden on Milwaukee property tax payers and could replace MATC as No. 4 on that list. It assuredly will in 2012. And a simple transparency change would drop the citywide MPS levy in the taxpayer’s eyes — about $240 million on the 2011 property tax, rather than more than $293 million. That’s not small change, and psychologically quite different.

The elected officials in charge of accepting the MPS request for basic clarification are both retiring in April and have made their mark in fiscal responsibility, pushing convenience and service for the public. They are city treasurer Wayne Whittow and comptroller Walter Morics. Both could leave office with another laurel of accuracy and transparency by honoring the MPS board’s request. If they ask around, as Labor Press did, they will find the mayor as well as civic leaders look favorably on the idea.

Since state aid covers only about 62% of the voucher tuitions, the city property tax payer picks up 38% of the cost of every voucher school student (works out to about $2,448 per pupil).

But all this has been long hidden from property tax payers, who only see MPS on the tax bill and thus hold the public school system accountable for money it never touched that is going to private schools.

In truth, these taxpayers are billed not only for the largest school district in the state but levied for the sixth largest, which is what the Milwaukee Parental Choice Program has grown to in the city, noted MPS board chairman Michael Bonds at a special meeting in September.

MPS should be entitled to that $50 million plus since it’s the count of MPS kids that provides the rationale. The state sends the money to private schools in the name of voucher school parents. So MPS never gets even a breath of it except for being listed on the tax bill as the recipient and spender of 17% of the total that it never gets,

Why, under the convoluted equalization aid formula employed by the state, are voucher kids invisible? To make Milwaukee seem wealthier and let other school districts where Republicans rule the legislature get a healthier slice of the state pie. No surprise, then, that the erasing of some 20,000 living, breathing children out of the equalization formula doesn’t publicly dismay the other school districts benefiting.

Even when forced to concede the irrationality, the state has refused to repair the blatant flaw despite the urgent request of such officials as Mayor Tom Barrett. Now the MPS is asking for transparency on the bill so at least the public knows what it’s paying for and what MPS is not getting but is still blamed for.

The larger issue is not pro or con voucher schools. Some think they are good for education, though a detailed, carefully balanced University of Arkansas study reveals that MPS does better than most voucher schools and in sum as well as the best even after a decade. No wonder a large percentage of voucher families move their children back to MPS schools after being subjected to the choice program. (The movement back and forth further hurts MPS, since voucher schools get the tax money even as the kids leave and MPS often has to wait nearly a year to count the children in the funding formula.)

The University of Arkansas report criticizes the funding mechanism as an uneven double whammy with an adverse impact of some $47 million on Milwaukee property tax payers. (If only the taxpayers knew, but who reads studies?) It offers options of how the state could avoid this double dip of both refusing to count voucher students in the aid formula and then taking money to support them from the allocation to MPS students.

If you carefully examine what the president of School Choice Wisconsin, Jim Bender, told Journal Sentinel Sept. 13 in response to the MPS call for accuracy, even voucher advocates inadvertently admit it would be more honest to make the money they get a separate item on the tax bill.

The reasons for transparency are more urgent than when a “voucher tax” line was broached four years ago. Gov. Walker has not only expanded the private school tuition support to Racine County (Green Bay successfully resisted the move). In Milwaukee he also eliminated all caps on the number of students that could go into voucher schools and raised the income eligibility well past the originally targeted low income families. Now a family of four earning $72,000 can participate. He also opened the voucher doors to any school in the state.

Already nine schools outside the city are on board — some as far away as Cedarburg and Columbus, most religious schools, some even boarding schools. Now they can take city of Milwaukee children with voucher money.

One irony: private school K-12 enrollment is falling in school districts all over the state – except in Milwaukee, where the voucher program is keeping a lot of private schools alive. Perhaps Walker is seeking to rescue the private school movement by using city of Milwaukee property tax payers as his bank.

The MPS with its request simply wants city taxpayers to know about the shell game. Once you could have argued that underwriting private school tuition for low income children was aimed at giving choice to children always heading to MPS. Walker’s expansion means city taxpayers will underwrite children always headed to private schools.

If the tuition at St. Thomas More High School in St. Francis is $8,200 a year (so listed), there are middle class families that can now get in just paying the $1,758 left over after the state underwriting. If Wayland, the coed boarding academy run by 7th Day Adventists in Columbus, costs $12,000 in tuition, not so for a qualifying city kid who brings along the state’s $6,442, more than a third paid by city property tax payers.

And if city voucher kids wind up providing a steady stream of tax-funded income to these suburban schools, imagine how those schools could play with tuition costs for suburban children.

After two years, when all caps on size come off the Racine voucher program, a local newspaper revealed that property tax payers there will absorb their own hidden $10.4 million hit, so elected officials in Racine confirm they are also looking now at how to create transparent reporting on those tax bills.


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