Should K-12 tax dollars go to schools, or shell games? And other November questions

It's not just going to be elective offices on a lot of November ballots in Wisconsin. The Wisconsin Policy Forum recently gave some interesting number regarding the increasing amount of school referenda. State voters could give up to $1 billion for schools with these questions, and it's been part of a growing trend over the last 5 years.

Starting in 2014, referenda questions again rose, reaching 154 in 2016 amid a recovering economy, favorable interest rates, and relatively tight funding levels set by state elected officials (Jake’s note- and the one-time “savings” from Act 10 were already taken in almost all districts, with no funding provided from the state to keep things at the same level). In 2018, referenda are expected to hit 156—the highest number since 2001—provided that no questions are withdrawn from the November ballot and no additional referenda are held in response to a natural disaster.

Our analysis indicates that school districts seeking referenda have been more likely to be rural districts. The Department of Public Instruction (DPI) has reported 80% of referenda between July 2011 and 2016 were from rural school districts with at most 745 students and less than 10 students per square mile. Using the National Center for Education Statistics’ definition of rural, the University of Wisconsin Applied Population Laboratory (UW) found that between the 2012-13 and 2016-17 school years, 67% of Wisconsin’s rural school districts experienced an average 3.3% student population decrease. Declining enrollment means a lower revenue limit and therefore less funding to pay for fixed operational costs.

The increase in recent referenda has happened despite additional state funding. After a relatively modest rise in education funding over the previous two state budgets, the 2017-19 budget increased total aids to public schools by $185.9 million (3.4%) in 2017-18 and $263.1 million (4.7%) in 2018-19. That included increases in a flat per pupil form of aid that falls outside the revenue cap, from $250 per pupil in 2016-17 to $450 in 2017-18 and $654 in 2018-19. Lawmakers also separately provided more state aid to sparsely populated districts and an increase in revenue caps for the lowest-spending districts. Without these actions, it is possible the number of referenda would have been higher.

The Policy Forum’s study also notes that an increasing amount of the referenda questions aren’t to borrow money for new buildings or other facilities, but instead are asking voters to increase the revenue limits just to keep the lights on. And voters are increasingly approving those revenue limit questions, because they also recognize how tight things are in public schools these days.

Recurring revenue limit increases tend to be for ongoing operations. The same is generally true for non-recurring revenue limits; districts may opt for those because it is more palatable to ask voters to support a limited-term tax increase rather than a permanent one. Non-recurring revenue limits can also fund short-term activities, such as school renovations. As of April 2017, $175.3 million in annual spending across 130 school districts was funded through recurring referenda, according to DPI.

The approval rate and dollar value of recurring and non-recurring referenda is increasing. For example, between 1999 and 2013, voters approved 48.3% of these referenda, which averaged $36.7 million each year after adjusting for inflation. Between 2014 and 2017, 75.1% of them passed, averaging $126.6 million.

The upcoming Governor’s election also illustrates a major contrast in how K-12 classrooms would be funded in the state. Matt DeFour went over the past and current proposals from State Superintendent/Dem candidate Tony Evers and Governor/GOP candidate Scott Walker in a recent Sunday Wisconsin State Journal article, and it is quite telling what is emphasized by the two candidates.

Over the last four budgets, Evers has proposed providing $6 billion more in state aid to K-12 schools than Walker, while calling for an overhaul of the way that aid is distributed to school districts. His proposal for the next two-year budget seeks $1.6 billion more in state aid than the current budget with the goal of restoring a defunct state commitment to fund two-thirds of the cost of public education. It also continues to push for loosening state-imposed property tax caps.

Walker has rejected Evers’ budget requests and instead provided $4 billion more in property tax credits, an indirect form of school funding that reimburses property owners for a portion of what they pay to support schools. He also has added cumulatively more than $1 billion for a new type of aid that circumvents the state’s school funding formula, while not raising property taxes. He has not yet proposed a 2019-21 budget but has emphasized that keeping property taxes frozen will continue to be a priority….

Evers introduced his “Fair Funding for Our Future” proposal in 2010, when Walker was first running for governor. It takes all of the money being used on property tax credits and puts it into the school funding formula. Because of revenue limits and increased state aid, property taxes would remain stable statewide, though in some districts they would rise and others they would fall.

And the tight property caps in the Age of Fitzwalkerstan directly results to all of these school referenda, since that becomes the only way for a school to fund itself beyond those capped levels.

In addition, the pre-election “major increase in K-12 education funding” that Walker tries to talk up gave the same increases per pupil to all schools, regardless of needs and resources. Which also explains the significant disparities between rural schools in Wisconsin that are struggling with stagnating enrollment, and schools in growing, well-off areas that didn’t necessarily need the help they got from Walker and WisGOP to either fund their schools or lower their property tax rates.

Later in DeFour’s article, another contrast is noted where Evers wants to give more money to assist schools in serving children with special needs, while Walker has instead kicked back campaign donations invested tax dollars in private, often religious schools.

Evers, for example, has called for more money for special education with each budget, including an 82 percent increase in his 2019-21 budget request. Walker has kept levels frozen, even in his most recent budget that adopted other spending increases Evers had requested. Evers’ new budget proposal includes $60 million more for student mental health services, up from about $8 million in the current budget.
Walker, meanwhile, has expanded the private school voucher program statewide, sending millions of dollars from general school aid to private schools, including for many students whose parents were already not planning to enroll in public schools. Evers has called for scaling back the program, something that has never happened since the state pioneered the modern voucher program in Milwaukee more than 25 years ago.

One other kicker with the extra voucher money is that when vouchers were expanded statewide beyond Milwaukee and Racine in 2015, it was funding by taking money away from the district the child lived in, even if the child never attended a day of public school there. This lowered state aids and raised property taxes in many of those property-rich suburban districts, while giving less of Walker’s added school levy credits to homeowners in districts outside of those areas.

If K-12 education is a major issue for you in November’s election, the question you need to ask is “do I choose to have things go on as they are now, or do I want the taxes distributed to all schools be done in a different way?”

If you think the referenda-laden and high-disparity status quo is fine, then you probably should Stand with Walker. But if you want things to be different, want less money going to the Betsy DeVos crowd via vouchers, and think that public schools should be of similar quality no matter where you live in the state, then you probably should lean toward Tony Evers.