Understanding School Finance in Wisconsin: A Primer

Michael Ford:

A fundamental tension between state and local control lies at the heart of Wisconsin's school finance system. For much of Wisconsin's history, schools boards were responsible for deciding how much to spend on education, and how much revenue to raise via the property tax levy to fund spending. However, the balance tipped in favor of the state in the 1993-'94 school year, when the state imposed revenue limits.

Revenue limits cap how much additional money school districts can raise for each pupil through a combination of state aid and property tax. Since their inception, revenue limits have increased annually at roughly the rate of inflation. The imposition of revenue limits defined one basic attribute of education finance in Wisconsin: Maintaining the status quo. Consider:

Increases in revenue limits use the previous year as a base, ensuring that the largest predictor of spending is how much a district spent in the previous year.

Revenue limits increase at roughly the rate of inflation, keeping overall school finance formula revenues, in inflation-adjusted dollars, relatively constant.

The distribution of total state and local spending by school district remained steady between 1999 and 2012.

In 1999 the 100 districts receiving the most state and local revenue per student received 117% of the state average of state and local revenue. In 2012 that number was 119%. Similarly, the 100 districts receiving the least state and local revenue received 88% of the state average of state and local revenue. In 2012 that number was 87%.

A state aid program called special adjustment aids ensures districts cannot receive less than 85% of the state aid they received in the previous year.

The enrollment number used to generate payments to schools is a three-year average. It is designed to cushion districts against sudden increases and decreases in enrollment.

Related:

Madison Schools' Budget Updates: Board Questions, Spending Through 3.31.2013, Staffing Plan Changes
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Wisconsin K-12 Tax Spending Dominates Local Transfers

Posted by Jim Zellmer at May 14, 2013 12:43 AM
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