Senate K-12 Provision Would Disadvantage Poorer School Districts, Distort Key Principle of Equalization Aid Formula

The state Senate’s K-12 funding package unveiled on July 18 (see previous post) contains an especially troubling referendum-related provision that has not been previously considered by the Legislature. The July 18 package was the first time it was made public.

The provision specifically targets low-property-wealth-per-pupil districts and impacts their ability to receive state aid.  As described in the Senate package, going forward, it would exclude from “shared cost” any amount levied by a district in a prior year for either operating or debt service costs that were authorized by a referendum if doing so would not increase the district’s equalization aid entitlement. The provision first applies to referenda held after the budget bill becomes law.

The effect of this provision would be to permanently prevent a positively-aided school district (i.e., a district with below-average property wealth per pupil) from seeing any increase in state equalization aid as the result of passing a referendum authorizing additional district spending.

All of the districts shaded in dark green on this map produced by the Department of Public Instruction (DPI) would potentially be adversely impacted by this provision.  In addition, most of the districts shaded in light green on the map would also potentially be adversely impacted by this provision.

For property poorer districts that are positively aided at the first two levels of Wisconsin’s three-tiered equalization aid formula (227 districts during the 2016-17 school year) and for many districts that are positively aided at all three levels of the formula (244 districts in total), this provision would be a severe deterrent to going to referendum because all of the district’s additional referendum-approved spending would be funded by property taxes. None of the district’s additional costs would be aided by state aid.

As the map indicates, many rural districts would be affected if they go to referenda in the future.  So would 13 of the state’s 15 largest school districts (by enrollment), as all but Madison and Waukesha would be impacted.

Property wealthy districts with already high spending levels (negative tertiary aid districts) that pass referenda would not be affected by this provision.  Those districts would continue to have their state aid reduced under this proposal as they do under current law; however, they might benefit over time from internal shifts in the formula as referendum spending from property poorer districts is excluded from future aid calculations.

This proposal reflects a big step away from the principles underlying the equalization aid formula.  One of those principles is that rate at which school costs are aided through the formula is determined by comparing a school district’s per pupil tax base to the state’s guaranteed tax base under the formula.

Here is a list of the districts (244 by our count) that the WASB believes likely would have been affected (based on 2016-17 Equalization Aid figures) had this provision been in effect during the 2016-17 year and had they successfully passed an operating or borrowing referendum:

Abbotsford Freedom Area Osceola
Albany Galesville-Ettrick-Trempealeau Oshkosh Area
Algoma Genoa City J2 Osseo-Fairchild
Alma Center Gillett Owen-Withee
Almond-Bancroft Gilmanton Pardeeville Area
Altoona Glenwood City Parkview
Amery Granton Area Pecatonica Area
Antigo Grantsburg Peshtigo
Appleton Area Green Bay Area Pittsville
Arcadia Greendale Platteville
Argyle Greenwood Plum City
Ashland Gresham Port Edwards
Athens Hartford J1 Portage Community
Auburndale Highland Potosi
Augusta Hilbert Prairie Du Chien Area
Baldwin-Woodville Area Hillsboro Prairie Farm
Bangor Holmen Prescott
Baraboo Horicon Pulaski Community
Barneveld Hortonville Racine
Barron Area Howard-Suamico Randolph
Beaver Dam Howards Grove Reedsburg
Beecher-Dunbar-Pembine Independence Reedsville
Belleville Iowa-Grant Rib Lake
Belmont Community Ithaca Richland
Beloit Janesville Richmond
Beloit Turner Jefferson Rio Community
Benton Johnson Creek Ripon Area
Berlin Area Juda River Falls
Black Hawk Kaukauna Area River Ridge
Black River Falls Kenosha Riverdale
Blair-Taylor Kickapoo Area Rosendale-Brandon
Bloomer Kiel Area Royall
Bonduel Kimberly Area Saint Croix Central
Boscobel Ladysmith Saint Croix Falls
Bowler Lafarge Salem
Boyceville Community Lake Mills Area Seneca
Brillion Lancaster Community Seymour Community
Brodhead Lena Sharon J11
Brown Deer Little Chute Area Shawano
Butternut Lomira Sheboygan Area
Cadott Community Loyal Sheboygan Falls
Cambria-Friesland Luxemburg-Casco Shiocton
Cameron Manawa Shullsburg
Cashton Manitowoc Silver Lake J1
Cedar Grove-Belgium Area Marinette Somerset
Central Westosha UHS Marion South Milwaukee
Chilton Marshall Southwestern Wisconsin
Chippewa Falls Area Marshfield Sparta Area
Clayton Mauston Spencer
Clear Lake Mayville Spring Valley
Clinton Community McFarland Stanley-Boyd Area
Clintonville Medford Area Stratford
Colby Mellen Sun Prairie Area
Colfax Melrose-Mindoro Superior
Columbus Menasha Thorp
Cornell Menominee Indian Tigerton
Cuba City Menomonie Area Tomah Area
Cudahy Merrill Area Tomorrow River
Cumberland Milton Trevor-Wilmot Consolidated
D C Everest Area Milwaukee Tri-County Area
Darlington Community Mineral Point Two Rivers
Deerfield Community Mishicot Union Grove J1
Denmark Mondovi Viroqua Area
Depere Monroe Walworth J1
Dodgeland Monticello Waterford UHS
Dodgeville Mosinee Waterloo
Dover #1 Mount Horeb Area Watertown
Durand-Arkansaw Neillsville Waupun
Eau Claire Area New Glarus Wausau
Edgar New London Wauzeka-Steuben
Edgerton New Richmond West Allis
Eleva-Strum Niagara West Depere
Elk Mound Area North Crawford West Salem
Ellsworth Community North Fond Du Lac Westby Area
Elmwood Norwalk-Ontario-Wilton Weston
Evansville Community Oak Creek-Franklin Wheatland J1
Fall Creek Oakfield Whitehall
Fall River Oconto Wisconsin Rapids
Fennimore Community Oconto Falls Wittenberg-Birnamwood
Flambeau Omro Wrightstown Community
Fond Du Lac Oostburg
Fort Atkinson Oregon

(Note:  This list is based on 2016-17 aid calculations and may be subject to change in future years.