Nearly half of funding for public schools in Wisconsin comes from local property taxes. That means the quality of education a child gets is often tied to where they live. Public schools in poorer neighborhoods can have less money than public schools in more affluent neighborhoods.
The Wisconsin school funding process is meant to remedy that, but the aging formula used to calculate state aid is problematic and can actually have the opposite effect, some experts say.
Democratic Gov. Tony Evers, a former public school teacher who served as the head of public education in Wisconsin for nearly a decade before his election to the state’s highest office, has repeatedly tried — and failed — to disburse more funding to poorer districts.
In his first state budget, Evers and the Republican-controlled state legislature approved a $570 million increase in spending for public schools. The governor had requested $1.4 billion.
Late last year, many school districts levied an increase in property taxes. The $224 million in additional taxes across the state marks a 4.5% bump from the prior year—the highest rate of increase in Wisconsin in a decade, according to the Wisconsin Policy Forum, a nonpartisan think tank.
Now the economic slowdown from the pandemic has led to huge losses in state tax revenue, and that could result in cuts to the education budget, said Julie Underwood, an education and law professor at UW-Madison.
This poses a risk to Wisconsin public schools, which get about 45% of their funding from the state and only 7% from the federal government, according to the Department of Public Instruction. These numbers are largely the same among other states across the country, according to the National Center for Education Statistics.
The rest of the money for public school funding mostly comes from local property taxes.
The formula that determines how much each public school in Wisconsin gets is “very complex,” Underwood said.
The formula factors in the number of students in a district, the money the district spent on education the prior year, and the property values in that district. The state then allocates more aid to districts with lower property values.
Essentially, local property values are used to determine how much districts are able to pay out of pocket, and which need more assistance from the state.
“The goal of the formula is to try to extend the social, societal benefits of good education to as many places in our state as we can, so that communities that have the ability to spend more and communities that don’t both at least can give their students some amount of needed and helpful education,” said Benson Gardner, a former spokesman for the Department of Public Instruction who worked there at the time of this interview.
Those that can afford to pay more taxes often vote to do so, but that’s a harder sell for lower-income school districts.
But it doesn’t always work out that way. The balance between state funding and local property taxes is the core of education funding, and they interact inversely—like a teeter-totter—under state rules. The rules set maximums—which have gradually increased over the years—on school districts’ combined sums of state aid and local property taxes. Under these limits, total funding can only go so high. If state aid were to increase, funding from property taxes would need to decrease, and vice versa, according to the Wisconsin Association of School Boards.
The limits were created to assure districts that their property taxes would not increase unless communities voted on it. The limits essentially tie property tax rates to referendums, putting control of the rates into the hands of voters in the school district.
If a referendum passes, it overrides the revenue limit with no impact on state aid.
Almost all public school districts in the state have raised property taxes in the past two decades. Since 1993, more than 400 of Wisconsin’s 421 school districts have voted to increase property taxes at least once, according to Milwaukee Public Schools.
Communities have relied on these votes to raise school funding, which is partially responsible for education disparities across Wisconsin. A 2019 Marquette Law School poll showed a large majority of Wisconsin residents favored higher taxes to fund public education. Those that can afford to pay more taxes often vote to do so, but that’s a harder sell for lower income school districts.
“There is a danger of evolving into a state where there are haves and have nots, where the districts that are able to pass referenda—that feel they can pay more taxes—they are the ones who have stronger schools, and the ones who feel they can’t are the ones who don’t,” Gardner said.
Without passing a referendum, districts are stuck with their revenue limit, regardless of their state aid allowance. The $570 million increase in public school funding won’t help poorer school districts as much as it could.
“The key,” said Andrew Reschovsky, an education professor emeritus at UW-Madison, “is that if the state gives more general aid, it doesn’t translate necessarily into a lot more money for school districts, because they get more general aid, [but] they’re limited by this revenue limit.”
Though Underwood believes Evers’ budget increase is a step in the right direction, she said it is not nearly enough.
Nevertheless, other issues with Wisconsin’s school funding have persisted. Underwood led a network of statewide education organizations that proposed public education reforms. Their proposals have been championed by Evers and are known as Fair Funding for Our Future.
The plan aims to tweak the public school funding formula to further account for poverty, since a school district’s property values do not always reflect its true ability to pay for education. For example, a resort community with a large tourism industry may have relatively high property values, but that might not accurately reflect the incomes of its residents. The plan also looks to guarantee minimum funding for every student and return revenue limit control to the districts, among a variety of other reforms. While he was state superintendent, Evers presented many of these recommendations to the GOP-controlled legislature for several years, but was rejected each time.
Republicans may be resistant because they tend to represent more suburban districts, which—on average—benefit more from the current funding formula than other districts, said Will Flanders, Research Director at the Wisconsin Institute for Law and Liberty, a conservative think tank. Unlike today’s formula, which measures property value, Fair Funding is a weighted funding system, which means it disburses funding by measuring individual student needs through factors like economic status.
“When you implement [most weighted funding systems], looking forward, there are going to be winners and losers,” Flanders said. “Across the board, no one wants to go to their constituents and say ‘you’re going to lose funding.’”
WILL would like to see more focus on choice and charter schools in addition to public schools.
“In order to get folks on the conservative side on board, you want to make it more universal,” Flanders said.
Like many other issues in Wisconsin, school finance and education policy have become incredibly divisive and partisan.
“It didn’t used to be that way, and in my opinion it shouldn’t be that way,” Underwood said, “but that’s what it’s become in the state of Wisconsin.”
The Badger Project is a nonpartisan, citizen-supported journalism nonprofit in Wisconsin.
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