State school aid is the largest part of the state budget and probably the most watched. So, when Governor Scott Walker (R) unveiled his proposed 2015-17 budget, attention turned to K-12 education and funding for Wisconsin’s 424 public school districts.
The world of school finance is complex. Districts operate on a combination of state general aid, categorical aid (for special programs), local property taxes, and smaller amounts from other sources, including from the federal government. To complicate matters, the state limits the per student amount of state general aid and local property taxes districts can collect (revenue limits). The revenue limit does not include categorical aids.
The new budget does several things, including:
- No increase in general aid in 2016 and a $108 million increase in 2017;
- No increase in revenue limits in either year; and
- Eliminating in 2016 and restoring in 2017 a special categorical aid payment.
So what does this mean for local school districts? First, the $108 million general aid increase in 2017 provides no additional money to schools. Since school revenue limits are not increasing, school districts must reduce property taxes by a similar amount to stay within the limits. Second, schools will see a $127 million cut in 2016 due to loss of the special categorical payment mentioned above. Third, restoration of that categorical payment at a slightly higher level increases school revenues by $142 million in 2017.
The impact of the Governor’s proposed budget for an “average” school district is shown below. This year, the typical district is allowed to collect $9,815 per student from a combination of state general aids and local property taxes. It also gets a $150 per student payment—from the $127 million figure mentioned above—for a total of $9,965 per student. With the categorical payment eliminated next year, revenue in the typical district declines 1.5% to $9,815 per student and approaches 2009 levels. In 2017, the payment is restored at about $165 per student and the district’s total rises to $9,980, or $15 above 2015 levels.