Educate All Students: Larry Miller's Blog

December 17, 2013

Important Funding Proposal for Wisconsin Public Schools

Filed under: School Finance — millerlf @ 8:48 am

From:   Rep. Pope, Rep. Wright, Rep. Clark, Rep. Hesselbein and Sen. Lehman, Sen. Vinehout, Sen. Cullen

Re:  Co-sponsorship of LRB 2673/2 – Public School Funding Reform  December 9, 2013

The past two budget cycles have placed additional strain on the funding formula by which we provide aid to our public schools. In an effort to advance the dialogue regarding the funding problems public school districts currently experience, we are introducing legislation that would overhaul the public school funding formula. LRB 2673/2 is based largely on the recommendations of Superintendent Tony Evers’ ‘Fair Funding for Our Future’ plan, and makes the following changes to the distribution of general school aid:

  • Factors in student poverty: the funding formula currently does not make any adjustments for household poverty despite the fact that poverty has been shown to greatly affect the educational outcome of students
  • Sets a guarantee of $3,000 per pupil in state aid: there are now 20 school districts that receive no equalization aid, placing them outside of the funding formula.  Taxpayers in every district deserve equalization aid for this most vital state function.
  • Shifts the School Levy Credit and First Dollar Credit into equalized aid: both of these credits are currently counted toward school aid, but in reality are used as accounting gimmicks that mask the true costs of public education
  • Puts Wisconsin on the path to restoring 2/3rds funding: the 2/3rdsfunding guarantee is a bedrock of the funding formula, ensuring local property taxpayers aren’t over-burdened with the costs of their local schools, and returning to this guarantee was the foundation of legislation introduced in 2009 by Representative Robin Vos (2009 AB 919)
  • Eliminates Per Pupil Categorical aid and provides a $275 per pupil levy increase in 14-15: by using per pupil funding instead of levy growth with additional aid, the legislature over the past two budgets hasfurther distorted the funding formula’s ability to equalize based on a district’s ability to pay
  • Restores reasonable school levy growth: links levy limit growth to the Consumer Price Index giving local districts the ability to keep up with economic changes

If you are interested in co-sponsoring LRB 2673/2, please respond to this email or contact Representative Pope’s office at266-3520 or Senator Lehman’s office at266-1832. For further information on this proposal, please see the attached LRB analysis.

Analysis by the Legislative Reference Bureau

This bill makes a number of changes in the laws relating to public school financing, including the following:

1. Currently, the amount appropriated each fiscal year for general school aid is a sum set by law. This bill directs the Department of Public Instruction (DPI), the Department of Administration, and the Legislative Fiscal Bureau annually to jointly certify to the Joint Committee on Finance (JCF) an estimate of the amount necessary to appropriate in the following school year to ensure that state school aids equal the following percentage of partial school revenues (in general, the sum of state school aids and school property taxes):

a. For the 2014−15 school year, 63 percent.
b. For the 2015−16 school year, 64.2 percent.
c. For the 2016−17 school year, 65.4 percent.
d. For the 2017−18 school year and each school year thereafter, two−thirds.

Under the bill, JFC determines the amount appropriated as general school aids in each odd−numbered fiscal year (e.g., the 2014−15 fiscal year) and the amount is set by law in each even−numbered fiscal year.

2. For purposes of determining a school district’s general school aid amount, in general this bill requires that each pupil who is eligible for a free or reduced−price lunch under the federal school lunch program be counted as an additional 0.3 pupil.

3. Currently, if a school district would receive less in general state aid in any school year than 85 percent of the amount it received in the previous school year, its state aid for the current school year is increased to 85 percent of the aid received in the previous school year. This bill increases the percentage to 90 percent.

4. This bill provides that a school district’s state aid in any school year may not be less than an amount equal to the school district’s enrollment multiplied by $3,000.

5. Currently, for calculating a school district’s revenue limit, the per pupil adjustment is $75 per pupil in each of the 2013−14 and 2014−15 school years. In the 2015−16 school year and thereafter, there is no per pupil adjustment. This bill sets the per pupil adjustment at $275 per pupil for the 2014−15 school year, and thereafter adjusts the previous school year’s adjustment by the consumer price index increase.

6. Currently, if at least 50 percent of a school district’s enrollment is eligible for a free or reduced−price lunch under the federal school lunch program, the school district is eligible for a prorated share of the amount appropriated as high−poverty aid. This bill eliminates this aid beginning in the 2014−15 school year. The bill provides additional state aid for the 2014−15 school year to hold school districts harmless from the loss of high−poverty aid.

7. Currently, the state annually pays each school district an amount equal to its average enrollment in the current and two preceding school years multiplied by $75 in the 2013−14 school year and $150 in each school year thereafter. This bill eliminates this per pupil aid after the 2013−14 school year.

8. Currently, $75,000,000 in school aid payments is delayed until the following school year. Beginning in the 2015−16 school year, this bill delays $972,400,000 in school aid payments until the following school year.

9. In the school district equalization aid formula, the guaranteed evaluations represent the amount of property tax base support that the state guarantees behind each pupil. There are three guaranteed valuations used; each applies to a different level of expenditures. The first level is for expenditures up to the primary cost ceiling of $1,000 per pupil. The second level is for costs per pupil that exceed $1,000 but are less than the secondary cost ceiling, which is set at 90 percent of the prior school year statewide shared cost per pupil. This bill changes the secondary cost ceiling to 100 percent of the prior school year statewide shared cost per pupil.

10. The bill eliminates the school levy property tax credit and the first dollar property tax credit.

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