Analysis Details Sparsity Aid Vs. Low Revenue Ceiling Impact

A new analysis by the non-partisan Legislative Fiscal Bureau and provided to the WASB by Capitol sources shows the impact on school districts statewide of shifting from Governor Walker’s proposed increases in sparsity aid to an increase in the low revenue ceiling which was first proposed by the state Assembly. The impact amounts to shifting proposed resources from districts that would qualify for sparsity aid under the governor’s proposal to giving historically low spending districts the opportunity to catch up with higher revenue districts by raising revenue locally.

To be clear, both of these investments have merit and the WASB membership has gone on record in support of both via Delegate Assembly resolutions.  Our position is that the legislature should prioritize and fund both.

Governor Walker proposed in his initial budget to fully fund the sparsity aid program and increase payments from $300 to $400 per pupil for districts that currently qualify (under 745 enrollment and fewer than 10 members per square mile) and to expand the program to provide $100 per pupil for sparse districts with between 745 and 1,000 pupils.

The state Assembly pushed for a long overdue increase in the low revenue ceiling.  In an apparent negotiated position with Senate leadership (it was included in the Senate GOP education proposal), lawmakers propose an increase from the current $9,100 per pupil to $9,300 in 2017-18, and to $9,400 in 2018-19 with annual increases of $100 per pupil each year thereafter until this adjustment reaches $9,800 in 2022-23; it would be maintained at $9,800 each year thereafter.  Districts with per pupil revenue authority below the dollar amount of the ceiling could increase their local levy up to this ceiling without referendum approval.  This plan deletes the governor’s proposal to increase/expand sparsity aid, presumably to use that money to mitigate the statewide property tax impact of raising the low revenue ceiling.

Shifting from one proposal to the other does create winners and losers and we are providing this information to make sure our members are aware of the impact on their districts and can act accordingly in communicating with their state lawmakers.

LFB Analysis: Sparsity Aid vs. Low Revenue Ceiling Proposals

The first two columns show the INCREASE in sparsity aid as proposed by the governor in each school year covered by the two-year state budget and what districts would qualify.

The following three columns collectively show the impact of the legislature’s negotiated increase in the low revenue ceiling.  Columns three and four show the additional sparsity aid that would fully fund current law as the aid program was under-funded and the amounts received by districts were pro-rated.  There is no expansion or increase in sparsity aid outside of fully funding current law and allowing any district that qualified for sparsity aid in one year but not the next to receive 50% of the amount it received in the prior year.

The low revenue adjustment columns show what districts would qualify for additional local revenue authority and how much they would be able to raise property taxes outside a referendum based on the proposed increases in the ceiling.  The “Total” columns that follow simply add together the amounts in the preceding sparsity aid and low revenue adjustment columns for each year.

The last column “Impact” shows the difference between what a district would receive under the governor’s sparsity aid proposal and the negotiated legislative low revenue ceiling  package.  Based on this analysis, 69 districts received more revenue and 176 received less revenue in moving from the governor’s sparsity aid proposal to the low revenue proposal now being considered by the legislature.  The remaining districts see no change as they qualify neither for sparsity aid nor low revenue adjustments.

*-the asterisk next to a district’s name indicates declining enrollment.