Gov. Scott Walker's budget would shift Wisconsin's approach to school funding

MADISON - Gov. Scott Walker's budget would do more than just increase state aid to schools — it would also double down on a significant change to how that aid gets divvied up among districts.

Under the GOP governor's two-year budget bill, the state would put $509 million more into a relatively new form of school aid that doesn't account for the poverty of school districts or their students.

Walker wants the money to go to districts in the form of a flat per pupil payment that in 2011 he and Republican lawmakers added to the state's main form of school aid. As proposed, the per student payment would rise from $250 this year to $450 in the 2017-'18 school year and $654 in the 2018-'19 school year.

Each district gets the same amount per student regardless of how much district residents could afford to pay for schools through the property tax. That's different from the state's general aid formula, which takes into account local property values in districts when determining how much state aid they'll get.

State schools superintendent Tony Evers, an ally of Democrats who faces two challengers in his bid for re-election, had sought a similar-sized increase in school aid to Walker's, and he praised the governor for giving more state money to both wealthy and needy districts. But in his own proposal Evers targeted more of the aid to struggling districts and students.

"If you're giving a wealthy district the same amount as a poorer district ... over time that takes a toll," he said.

For his part, Walker points out that his approach to state aid gives every student the same increase and ensures that some districts don't end up raising local property taxes.

"The main distinction between what (Evers) proposed and what we did is we still maintain our property tax relief at the same time provide the additional money for the schools," Walker told reporters when he rolled out the proposal Friday.

Walker will include his funding in the 2017-'19 state budget bill he's releasing Wednesday. In another advance look at that budget, the governor on Tuesday will lay out more details on his proposed cut to in-state tuition for University of Wisconsin students.

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Neither of those education proposals is guaranteed to pass the Legislature as Walker proposes. On Monday, Senate Majority Leader Scott Fitzgerald (R-Juneau) hedged on his support for both.

"I didn't see a lot of excitement for the tuition cut" from GOP senators, Fitzgerald said.

Of the increase for K-12 schools, Fitzgerald said, "That's a big number and I wouldn't want to commit to that number until you had a full caucus discussion (among Senate Republicans)."

Since 1949, Wisconsin has sought to use its state aid to schools to even out some of the differences among them in wealth, according to a recent report by the Legislature's budget office. Since the 1990s, the state has also limited the combined amount that districts can take in from general state aid and from local property taxes.

The special form of aid created by Republicans since 2011 falls outside that more established system. It's a flat amount per student that all districts can spend, no questions asked.

"Since (2011-'13), we've had a dual-track system," said Dale Knapp of the Wisconsin Taxpayers Alliance. "One of the challenges we're now facing is that school finance is already difficult to understand. Over the past couple of years, we've just added these layers to almost make it incomprehensible to the public."

In 2010, the state had no per pupil aid at all and it currently stands at $211 million a year — a relatively small amount compared with the $4.6 billion in general state aid. But Walker's budget would more than double school aid to $931 million over two years.

That would take the flat amount per student approach from 3.9% of all state aid to schools today up to 8% of the total.

This new system is easy to understand — a plus for citizens and school districts alike over the state's complicated general aid formula.

"We all loved per-pupil aid, because we know how much we'd get and we'd know how we'd spent it," said Emily Koczela, chief finance officer for Messmer Catholic Schools and the former business manager of the Brown Deer School District.

"But, it's a dis-equalizing way to do it," she said.

Politicians like another aspect of the law — it gives districts more money to spend with no worries about local property tax increases.

When state officials used to increase aid to local schools, they also typically increased the total amount per student that districts could raise in state aid and property taxes. Otherwise, an increase in overall state aid to schools would just drive down property taxes statewide.

But in practice, the effects of these two actions would mean that some districts ended up raising local property taxes because they didn't get much new state aid and some would be required to lower property taxes because they got a lot.

The per-pupil aid is attractive because it's outside that old system. Sen. Luther Olsen (R-Ripon), who heads the Senate Education Committee, said it essentially "locks in place the taxes, and just gives schools money to spend."

But Evers pointed out that it's possible to achieve those same goals while still designing a new form of state aid that takes into account factors like poverty and other changes, such as students who don't speak English as their native language. If the state goes too far with a flat per-pupil funding system, it opens itself up to a legal challenge, he said.

For his part, Walker told reporters Friday that his approach was constitutional and could withstand a legal challenge if needed.

Journal Sentinel reporter Patrick Marley contributed to this report.