Education Landscape�and �School Finance Overview

Understanding School Finance

School Funding – Simplified!

Outside the Revenue Limit

Factors in Funding

Revenues

Controlled by Revenue Limits

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Outside Revenue Limits

State Totals - School District Revenues

CONTROLLED

Although the mix of aid and taxes may be different across districts, the Revenue Limit can control 70-90% of the General Fund budget!

^ State General Aids includes: equalization aid, special adjustment aid, inter-district & intra-district aids, and high poverty aid (i.e., state aids received under the districts’ revenue limit caps.

* Other Sources include: state categorical aids, federal aid, and non-property tax local revenue (i.e., revenue received outside of the districts’ revenue limit caps).

Revenue Limit Formula

Revenue Limit Formula

Revenue Limit Membership

• 3^rd Friday in September Count
• Summer FTE
• Charter Addition by DPI
• 3 Year Averages

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2021-22 Revenue Limits

Revenue Limits & Per-Pupil Aid

Source: Department of Public Instruction. 2021-23 State Budget. https://dpi.wi.gov/policy-budget/2021-23-biennial-budget �

Membership in the Data Cycle

Equalization Aid

Equalization Aid : 2021-2022

Equalization Aid Membership in the Data Cycle

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One of the three factors used to calculate Equalization Aid

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State Aids – Equalization Aid Formula

General school aids primarily composed of Equalization Aids, which is a cost-sharing formula that incorporates:

• Spending = Shared Costs
• Number of Students to Educate = Members
• Property Value

�All Prior-Year Data�(2020-21 data is used for 2021-22 aid)

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2020-21 General School Aid Reductions

*Five districts receive no state general aid.

**$4,903.6 million in general school aids. $252.2 million is 5.1% of total general school aids.

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Categorical Aids

https://dpi.wi.gov/sfs/aid/categorical/overview

Categorical Aids

Per Pupil Aid

$742 multiplied by the current three-year average membership

K-12 School Aids as a Share of the State’s General Fund Has Decreased Over Time

*For 2019-21 biennium.

Source: Legislative Fiscal Bureau

Top Ten State General Fund Programs and % Share of State’s 2019-21 General Fund Budget

Category % of State Budget

1. K-12 General and Categorical School Aids 32.5%

2. Medical Assistance 17.8%
3. State Correctional Operations 6.3%

4. University of Wisconsin System 6.0%

5. School Levy/First Dollar Tax Credits 5.8%

6. Shared Revenues 4.5%
7. Technical College System Aids 2.8%
8. State Debt Obligation Bonds 2.1%
9. Private Choice/Voucher Programs 1.9%
10. Judicial and Legal Services 1.7%

All Other State Funding 18.7%

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Source: Legislative Fiscal Bureau (2019-21 Biennial Budget Summary, Table 12)

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There have been over 3,500 separate referenda questions since 1990.

Since the low point between 2000-2005, the passage rate has increased from 45% to 76%.

• Source: Department of Public Instruction Custom Reporting (https://sfs.dpi.wi.gov/Referenda/CustomReporting.aspx). Percent of successful referenda (recurring, nonrecurring, and debt) for elections held June 18, 1990 to April 6, 2021. Updated: June 03, 2021

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An Increased Reliance on Referenda

School Choice

Student Enrollment Option

Private School

• Milwaukee PCP
• Racine PCP
• Wisconsin PCP
• Tuition

Home School

Traditional Public School

• Neighborhood school
• Within district transfer
• Open enrollment

Charter School

• Instrumentality
• Non-instrumentality
• Independent

Virtual Charter

• Within district
• Open enrollment

Dual Enrollment

Early College Credit

Transcripted Credit

AP/IB classes

Whole grade sharing

Snapshot of School Enrollment

Source: Public and charter - Department of Public Instruction 2019-20 data warehouse data, private and tribal - https://dpi.wi.gov/wisedash/download-files and https://dpi.wi.gov/sms/choice-programs/data, homeschool - https://dpi.wi.gov/sms/home-based/statistics. It is not possible to enroll in a homeschool program for Kindergarten so homeschool is grades 1-12 only. Pre-Kindergarten students are not included in any count. Updated: July 30, 2021

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Wisconsin has almost 1 million K-12 students.�Over 87% of publicly-funded students attend a school overseen by a local school board (public, district charter, or district charter - virtual).

Parental “Choice” Options – 2022-23

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2022-23 Reductions to General School Aids

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• $5,201.6 million in general school aids. The statewide reduction of $230.5 million is 4.4% of total general school aids.

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Milwaukee Parental Choice Program (MPCP)

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Racine Parental Choice Program (RPCP) History

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Wisconsin Parental Choice Program (WPCP)

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Choice Program Expansion 2009-10 through 2022-23�(animation slide)

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Private School Choice/Voucher Summary�General Aids Impact

For choice/voucher students enrolled in the RPCP/WPCP since 2015-16 and SNSP students since 2017-18, the State General Aids Impacts:

• The choice student’s resident district pays their voucher through a reduction in its state general aids.
• If a district does not receive enough state general aid to cover this reduction, the balance is taken from other state aids (e.g., Per Pupil Aid) received.
• In the following year, these choice students are counted in their resident district’s membership for state general aids.
• A district may recoup some state general aid depending on its “position” in the state general aid formula, but is very unlikely to fully recover its prior year state aid reduction.

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Private School Choice/Voucher Summary�Revenue Limit Impact

For choice students enrolled in the RPCP/WPCP since 2015-16 and SNSP students since 2017-18 the Revenue Limits Impacts:

• Private school Choice students are not counted in a district’s revenue limit membership
• The choice student’s resident district receives a non-recurring revenue limit adjustment equal to the per FTE choice payment in the current year, allowing a school board to replace the state aid reduction through increased property taxes.
• If a school board chooses to levy less than the private school voucher non-recurring revenue limit exemption, the following year’s revenue limit carry-over total will be reduced dollar for dollar. In other words, this new non-recurring revenue limit exemption is treated the same way as other non-recurring revenue limit exemptions if a school board chooses to levy less than the maximum allowed. 

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School Board Options and Impacts

School District Budgets – Current Year (Year 1)

• For choice students enrolled in the RPCP/WPCP since 2015-16 and SNSP students since 2017-18, the school board must choose one of the following three options (or a combination):
1. Increase property taxes to replace the loss of state school aids in order to maintain existing student educational programs.
2. Use fund balance or some other source of revenues to replace the loss of state school aids to maintain current student programs.
3. Reduce current district expenditures equal to the state aids deduction.

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School Board Options and Impacts

School District Budgets – Following Year (Year 2)

For choice students enrolled in the RPCP/WPCP since 2015-16 and SNSP students since 2017-18,

• These choice students are counted in their resident district’s membership for state general aid purposes in the following year’s state aid calculation. Not counted for revenue limits.
• A district may recoup some state general aid depending on its “position” in the state general aid formula, but is very unlikely to fully recover its prior year state aid reduction.
• If a district receives additional school aids, other district(s) receive less school aids. Zero-sum gain.

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Private Vouchers = Property Tax Increases

• Adding private school choice students to the general aid membership changes one of the factors used to determine state equalization aids. This results in a redistribution of the existing level of general school aids. The impacts are:
• If a district receives additional school aids, other district(s) receive less school aids.
• Revenue Limits – State Aids = Property Taxes
• The effect is as though the choice/voucher expansion is funded statewide with property taxes.

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Next Year’s Impact

Poverty is Growing in Wisconsin

Source: Department of Public Instruction WISEdash (https://wisedash.dpi.wi.gov/).

Statewide, nearly 1 in 3 districts have student populations that are more than 50% economically disadvantaged.

Updated: June 02, 2021

Students are in Fewer Districts

Source: Department of Public Instruction WISEdash (https://wisedash.dpi.wi.gov/).

The percent of districts with declining enrollment increased from 52% in 2006-07 to 69% in 2020-21.�Today, 75% of students are located in just 30% of districts.

Updated: June 01, 2021

2019-20 Declining Enrollment

• Today, 75% of our students are located in just 29% of our districts.
• More than half or our students attend districts with fewer than 1,000 students.

*Excludes the Norris School District.

Source: Department of Public Instruction WISEdash (https://wisedash.dpi.wi.gov/).

Rural Areas: Fewer Kids, More Poverty

Source: Department of Public Instruction WISEdash (https://wisedash.dpi.wi.gov/).

Updated: June 01, 2021

Rural Areas: Fewer Kids, More Poverty

Department of Public Instruction. WISEdash (https://wisedash.dpi.wi.gov/)

Updated: June 01, 2021

The Number of Homeless Kids is Growing

Sources: Wisconsin Department of Public Instruction Homeless Children and Youth data (https://dpi.wi.gov/homeless/data) through 2017-18. Department of Public Instruction data warehouse data 2018-19 and later.

Updated: June 08, 2021

Half of Homeless Students are in 7 Districts

Source: Department of Public Instruction 2019-20 data warehouse data.

50% of homeless students are in just 7 districts but almost every district has at least one homeless student.

Updated: June 08, 2021

Mobility Impacts MPS Graduation

Source: Department of Public Instruction 2019-20 data warehouse data.

Consistent enrollment improves outcomes in open enrollment, choice, charter, virtual and traditional public schools.

Updated: July 30, 2021

Students with Disabilities

Students w/ Disabilities

Wisconsin serves nearly 118,400 students with disabilities (SwD).

Disability types impact achievement differently, and many SwDs are high achieving.

English Learners

English Learners

Wisconsin serves nearly 47,000 ELs students.

While Spanish is the largest language group and Hmong is the next most frequent home language, there are over 137 identified spoken languages by our students.

EL students are registered in 80% of Wisconsin school districts.

• 22 Districts are more than 10% EL
• Average District is 2.6% EL
• 76 Districts have no identified ELs

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Children’s Mental Health Challenge

Of kids that get treatment, �3/4^th received it at school

1 in 5 kids have a mental health issue

That’s about 174,000 Wisconsin school-age kids; �around 95,000 have serious mental health issues

Most kids will go untreated

Around 80% of students will go untreated

Data from CDC, Perou et al., 2013

Poverty Impacts Achievement

Source: Department of Public Instruction 2018-19 report card data (https://dpi.wi.gov/accountability/report-cards).

Updated: June 30, 2020

Changing Faces of Wisconsin

Schools are More Diverse

25 Districts with the�Most Students of Color

Source: Department of Public Instruction WISEdash (https://wisedash.dpi.wi.gov/).

These districts enroll 23% of all Wisconsin public school students.�Nineteen are "majority-minority" districts.

Updated: July 30, 2021

Students of Color Across Wisconsin

(Sparsity Districts Highlighted)

Source: ISES CD, 2015-16. Each do represents 0.1%. Rural (=sparsity) districts outlined in black

Nearly 90% of African Americans live in 6 counties �(Milwaukee, Dane, Racine, Kenosha, Rock, and Waukesha).

Black

Hispanic/�Latino

Asian

Native American

Poverty Can't Explain All of the Racial Achievement Gap