Wednesday, May 22, 2019

K-12 budget hearing preview - Will long-neglected areas get the boost Evers wants?

The Wisconsin Joint Finance Committee meets tomorrow to decide what kind of package for K-12 school spending gets out of the committee and into the full Legislature. So let's take a step back, take a look at where we are, and what are some of the options on the table.

One of the many items that GOPs on the Joint Finance Committee removed from Evers’ budget earlier this month was a provision that would used $1.09 billion in “school funding” that currently goes to property tax credits, and move it over into the formula that is used to determine General School Aids for K-12 districts.

So the K-12 General Aid fund under the budget as it stands today would involve increases of around $200 million in each year (4.4% for the next school year, 4.3% the year after). And when the Legislative Fiscal Bureau looked at that and other General Aid possibilities a couple of months ago, it said the effect would work this way.
If the state is able to provide additional K-12 funding in the upcoming biennium, there are different mechanisms through which it can be distributed. Attachment 3 shows the breakdown of state support funding for each district under [Evers’ proposed budget] bill had it applied in 2018-19 (as also shown in Attachment 1) compared to the breakdown for an option where $413.7 million in additional funding (the sum of the $406.3 million base funding increase for general aid and the $7.4 million in hold harmless funding estimated under the bill) were instead appropriated through the current law general aid formula in 2018-19. A total of 227 districts would have received more state support funding under the provisions of the [original Evers budget] bill, while 190 would have received more funding under the current law formula [if $413.7 million was added to it]. State support to four districts would have been equal under both options.
In looking at the LFBs “winners and losers” under the action that GOPs already chose in regard to school aid funding, the winners generally seem to be suburban districts, while many rural districts in northern Wisconsin are losers, as are urban districts like Eau Claire (-$2.23 million), Kenosha (-$2.80 million), and Madison (-$6.75 million!).

We’ll see how much of that proposed increase in general school aids will stay after Thursday’s Joint Finance meeting. But let’s also look at the bigger increase that Evers proposed in his K-12 budget – $606 million more to districts to help pay for the costs of special education. As the LFB mentions, the amount of special ed aid from the state of Wisconsin hasn’t been increased for a decade, and now the state pays for barely ¼ of a district’s costs for these required services.

This has required local districts to eat these special education costs, to the point that nearly $1.1 billion is being taken on by Wisconsin school districts this year, which impedes these revenue-limited schools from providing other services.



Evers’ proposal has a target of having the state cover 30% of these costs in the next school year, and then jump to 60% in the year after that. But as you’d imagine, it comes with a significant price tag, and Republican leaders in the Legislature have already signaled they won’t give Evers that much. So the question becomes “What increase might they give?” The LFB’s analysis of special education funding gives us an idea.
The Blue Ribbon Commission on School Funding recommended a substantial increase in the state's special education categorical aid in its January, 2019, final report. The bipartisan Commission, which consisted of sixteen members, including legislators, school administrators, and other stakeholders, held public hearings and informational hearings throughout 2018 in locations throughout the state. During public hearings, the Commission heard testimony regarding increasing special education costs and the decreasing proration rate, which results in school districts using their general funds to cover a portion of special education costs.

The Commission recommended a range of options that would increase the proration rate in the special education aid appropriation in the existing sum certain appropriation. The recommendations ranged from $45.1 million GPR to $119.0 million GPR in 2019-20, or a proration rate of 28% to 33%, and from $81.3 million GPR to $531.1 million GPR in 2020-21, or a proration rate of 30% to 60%. Alternatively, the Commission recommended an approach under which the appropriation would be modified to be sum sufficient, and prior year aidable costs would be reimbursed each year at a rate set in statute. Under this approach, the appropriation would reimburse 26% of eligible costs in 2019- 20, and that percentage would increase by one percentage point in each of the next ten years, until it reaches 36% in 2029-30. Based on DPI's cost projections, an additional $15,533,100 GPR in 2019- 20 and $36,309,500 GPR in 2020-21 would be required compared to base level funding under this proposal….

During public testimony on the [budget] bill, the [Joint Finance] Committee heard testimony supporting additional funding for special education. Several members of the public identified a 30% proration rate as a realistic but still significant increase. To reach this target, the Committee could consider providing $75,060,900 in 2019-20 and $81,060,900 in 2020-21.
But it looks like Republicans aren't even going to cover 30% of special education costs. WisPolitics' JR Ross reports that only $50 mil of Evers' $606 million request for special education will be added over the next 2 years. Looking back at the LFB paper, it appears that the GOP has chosen what is described in the second paragraph, which means 26% of projected costs would be covered next year and 27% the year after. I supposed it's more than we've seen the last decade, but still a lot of costs are going to have to be picked up by local districts.

Lastly, let’s also keep our eyes on what the GOPs will do with voucher schools during budget deliberations. Many of these Republicans received vital donations from Betsy DeVos and other voucher supporters to get to the positions they hold today, and they’ve paid that investment back many times over in the Age of Fitzwalkerstan by funneling more money into vouchers.


Vouchers also played into the mega-motion that JFC Republicans used to remove numerous Evers proposals. One of the items involved a plan to freeze enrollment after next year for both vouchers, as well as a program that pays over $12,000 for each student with special needs that a voucher school takes on (3 times what public schools get in state aid for regular special education students). By not freezing those programs, Republicans added more than $50 million to them for 2020-21, although some of that is offset by $27.5 million in aid reductions to public schools as a result (to be more “fiscally responsible”, ya know).

As it is with most state budgets, K-12 education funding and policy is a centerpiece, and after Thursday we will see if the former State Superintendent we elected governor will actually get a chance to direct funds in a way that he long wanted to do in his old job. And we’ll likely have a good idea just how much money is available for other needs after GOPs slice and dice Gov Evers’ proposals in the Committee room, as it seems possible that the $915 million in cuts that WisGOP needs to make to balance the budget could be done through K-12 alone. .

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