Governor Walker Announces Support For Increasing Low Revenue Ceiling and Sparsity Aid

Gov. Scott Walker today announced he’s reached a compromise with key lawmakers to provide additional financial relief to both low-revenue districts and small, rural districts next year.  Attempts to reach such a compromise during the 2017-19 state budget debate did not bear fruit, but today’s announcement signals new life for this effort.

The legislation is authored by Rep. John Nygren (R-Marinette, pictured at right) and would increase the low-revenue ceiling from $9,100 to $9,400 per pupil beginning in the next (2018-19) school year.  The low-revenue ceiling would then increase by $100 per pupil each year until it reaches $9,800 per pupil in 2022-23.

The low-revenue ceiling is a feature in state law that helps the lowest-spending school districts by allowing them to collect more in property taxes without having to go to referendum.  Assembly Republicans successfully pushed to add provisions to increase the low-revenue ceiling to the state budget bill.  However, Gov. Walker vetoed the measure due to concerns over the impact it could have on property tax bills.

A provision in the bill says low-revenue districts that have tried to pass an operating referendum to raise their revenue limit but were turned down by voters in the past three years would not be able to use the low revenue ceiling increase.  They would have to wait for three years after the unsuccessful operating referendum attempt to use the new provisions and raise their revenues under the higher low-revenue ceiling.

The bill would allow the state’s lowest revenue districts to raise local property tax levies by an estimated additional $22.5 million next year.  Roughly 80 districts may be eligible to raise their local property tax levies in 20i8-19 under the compromise.  It is our understanding that at least seven districts will not be able to use the increase until their three-year freeze expires.  As the low-revenue ceiling increases in each future year more districts would qualify to increase their levies under the proposal.

Another key element of the plan is similar to a proposal the governor included in his 2017-19 budget. It will increase sparsity aid payments by $100 per pupil–from $300 per pupil this year to $400 per pupil next year to school districts that are eligible under current law (i.e., districts that have a membership of 745 or fewer students and a density of less than 10 pupils per square mile), in the 2018-19 school year.  The plan will provide an estimated $6.4 million in additional sparsity aid payments aid to eligible districts but will not expand the program to higher enrollment sparse districts as the governor had proposed.

144 small, rural Wisconsin school districts received a total of $18.5 million in sparsity aid payments this year.  These districts represent 34 percent of Wisconsin’s 422 school districts and enroll roughly 62,400 students, or roughly 7 percent of Wisconsin’s total public school membership.

The proposal must still pass both houses of the Legislature and be signed into law by the Governor before any relief is assured.  While it is not a “done deal” at this point, the WASB thanks the leaders who worked to reach this compromise and we will encourage lawmakers to pass it into law.