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According to the state constitution, education is a state responsibility. Currently, state funds for K-12 education account for nearly 40% of the total state budget. The state has delegated much of its education responsibility to the local school districts. However, the state has created parameters for K-12 education that govern what a local district must do.
State requirements include:
While the federal government has less responsibility for education, there are requirements in certain areas:
In addition, the federal government provides funds for vocational education and for the school lunch and breakfast programs as well as many competitive grants.
Before 1993, school districts in Wisconsin were independent taxing authorities. In Madison, the school board would decide the mix of services, negotiate salary and benefits with district employees, and set the tax rate necessary to raise the funds to cover all of this. In 1993, the state legislature was concerned about rising property taxes and made two major changes in financing of K-12 education:
In 1996 the state legislature followed up on their promise for more property tax relief by passing a law guaranteeing that the state would provide funds to cover 2/3rds of local K-12 costs. Since the Revenue Cap law already limited the total amount a school district could raise from the combination of state aid and property tax levies, the additional state funds served to reduce property tax levies and deliver property tax relief. In Madison, the school district property tax levy fell from $174 million in 1995-96 to $156.3 million in 1996-97. The total levy did not exceed the 1995-96 level until this year.
The state distributes general school aid through a complicated formula intended to provide more support for districts with lower property wealth per student (in general, the poorer districts). Because of this, the actual level of state aid to a district ranges from a low of 17.7% (Linn J4 District in Walworth County) to 86.9% (Menominee Indian in Menominee County). Madison currently gets 29% of its costs from all sources of state aid, and 61% from the property tax levy. The remainder is from the federal government (about 4%), grants, and some minor sources of revenue.
In 1993 the state also froze the amount of money it was providing as reimbursement for special education services. The original state law in 1974 committed the state to reimbursing local districts for 70% (changed to 63% in 1984-85) of their costs of providing special education. The actual amount allocated hasn't reached that level for over two decades. In the late 90's, the statutory reimbursement rate was removed from state law. When the freeze went into effect in 1993, the state was reimbursing 45% of the costs. Because of the freeze (increased only slightly in the 1999-2001 state budget) and because of growth in the number and severity of disability, the current reimbursement rate is estimated to be a little over 30%.
Some district spending is exempt from the revenue caps. Categorical aid (funds for special education, for English as a Second Language, for SAGE1) from the state is not under the cap. Federal funds, grants from public or private sources, fees and expenditures for community services (School-Community Recreation) are also not under the caps. A district can go to referendum to get permission from the voters to exceed the revenue caps - for a single year, for several years, or permanently.
The Revenue Caps, QEO, and 2/3rds Funding are often referred to as the legs of a 3-legged stool - the thought being that a change in any one law will destabilize the whole set.
In 2000 the Wisconsin Supreme Court decided Vincent v. Voight. This was a lawsuit brought by the Milwaukee Public Schools and over 100 other districts (mostly small rural districts from the northwestern part of the state). In the lawsuit the districts claimed that the current system of distributing state funds for public education was not equitable because some districts were spending $14,000 per student and others could spend only about $5000. A second issue was that the state funding formula did not take account of the additional costs of educating some children. The Court decided that the funding system was constitutional; however, it also held that the state had not met its obligation to provide "a sound basic education" for all children. Specifically, the Court said:
An equal opportunity for a sound basic education ... takes into account districts with disproportionate numbers of disabled students, economically disadvantaged students, and students with limited English language skills. So long as the legislature is providing sufficient resources so that school districts offer students the equal opportunity for a sound basic education as required by the constitution, the state school finance system will pass constitutional muster.2
The state has not, as yet, changed its funding process to respond to the Court's directive for adequate funding in the three areas listed in bold in the quote above (disabled students, economically disadvantaged students, and students with limited English language skills).
The student body is very different from what it was 10 or 15 years ago. Today's student body is:
While the school district enrollment has increased in racial, ethnic, and socio-economic diversity, the performance of students has remained high:
Since 1993 the school district has eliminated nearly 250 positions and made significant changes to every line of the budget in order to comply with the Revenue Caps. Over the past ten years, this has required cuts of about $25 million from a same service budget (a budget funding the same set of services and programs). The school board made $7 million in cuts to keep the 2002-03 budget under the Revenue Caps. These cuts were felt in the classroom and in reduction of services to children. If nothing changes in the state laws regulating school finance, the estimate is that the budget for next year, 2003-04, will require $9-12 million more in cuts. The prospect is that the next round of cuts will more dramatically affect the classroom and the education for all children.
These budget cuts are a direct result of:
The Revenue Caps have permitted a yearly increase ranging from 2.91% initially to 2.77% this year. Meanwhile the practical effect of the QEO law is that teacher salary and benefits must be at least 3.8%. In fact, the district's contracts with MTI have cost 4.2% on average; other employees are treated similarly.
Between 1993 and 2003, the Madison school district's costs for special education grew from $27 million to $52 million. State reimbursement only grew from $13 million to $17.5 million. Since all special education costs that are not reimbursed by the state or federal government must be paid from funds under the Revenue Cap, an increasing amount and percentage of these costs were paid out of money originally intended for all other educational services.
In 1992-93 (before Revenue Caps) there were 809 students needing ESL services; in 2002-03 there are 2600. There has been virtually no increase in state funding for this program.
Education is a labor intensive process, and the school district budget reflects this fact: 84% of the budget goes for employee salary and benefits. This year the district has nearly 5,000 employees. They are:
After a decade of state Revenue Caps, school districts throughout the state are facing dire choices. There are several districts that are essentially bankrupt. Even more districts have made substantial cuts in educational services - increasing class size, reducing and/or eliminating programs (especially in the areas of art and music), and eliminating athletics and other extra-curricular activities. Madison, so far, has avoided these drastic changes - but the Madison School Board will have to choose among these types of cuts for the next school year if there are no changes at the state level, or if a referendum for additional funds does not pass.
Notes:
1SAGE is the state program that provides funds to reduce class size to 15 to 1 for schools that serve a concentration of low-income students. - Return
2WI Supreme Court, Vincent v Voight, 2000 - Return