School Funding Increase Actually a Property Tax Cut

Wisconsin Republicans tackled two big issues in the final version of the state budget approved by the Legislature’s Joint Committee on Finance on Thursday. One was their promise to cut taxes, which they did through a whopping $3.4 billion in tax cuts contained in the proposal, which will now move to the full Legislature and then to Gov. Tony Evers’ desk. The other problem the GOP confronted was the pesky issue of funding for Wisconsin schools. The state recently received a warning from the federal Department of Education that the Republican budget plan so badly underfunded schools that it did not meet the minimum standard for “maintenance of effort” — that is, maintaining the state’s average level of investment in education. Therefore, the feds warned, Wisconsin might not be eligible for $2.3 billion in federal COVID-19 relief.

The Republicans found a way to address the “maintenance of effort” problem through what appears to be an increase in state education funding but is actually a property tax cut.

Here’s how it works: Republicans approved putting $408 million into the state’s general school aid fund and another $72 million into funding for technical colleges. However, at the same time, the committee kept spending caps in place for local school districts and technical colleges. By not lifting the cap on how much local officials can spend on schools, Republicans ensured that all of the money they put into general school aid will simply replace local property tax money, driving down property taxes, but keeping school funding flat.

“You can say that that is education funding, but it’s really a property tax reduction,” says Chris Thiel, legislative analyst for the Milwaukee Public Schools. “And that’s exactly the way it was supposed to work because that’s exactly why the revenue limit system was invented; it was invented, not to fund schools. It was invented to hold the line on property taxes.”

The Republicans’ education budget still relies heavily on one-time federal COVID-19 relief money to fund ongoing, general school expenses, which Democrats and local school officials have objected as unsustainable and unnecessary, given that state coffers are flush, thanks to an unexpected $4.4 billion in extra state revenue.

“After the recent announcement of the state’s surplus, the Joint Committee on Finance came in woefully short on our state’s investment in education,” State Superintendent Carolyn Stanford Taylor said in a statement after the Joint Finance Committee passed the budget on a straight 11-4 party-line vote. “There is no increase in local revenue limits, so schools will not have the ability to spend state dollars beyond what they had last year to continue basic operations and meet student needs. The increase for state General Aid simply changes the mix of state aid and local property taxes.”

The cap on spending for local school districts, also known as revenue limits, were created under Republican Gov. Tommy Thompson in 1993 as an effort to control local property taxes.

Before the early 1990s, local districts could increase their per pupil funding for schools by a vote of the school board to raise the local property tax levy. Under revenue limits, citizens must pass a referendum to increase funding for schools beyond the state-imposed revenue cap.

At the same time revenue limits were created, Thompson committed the state to fund two-thirds of the total cost of per-pupil education spending through general aid. Evers has proposed, in both of his state budgets, returning to two-thirds state funding for schools. The bipartisan Blue Ribbon Commission on School Funding has also come out in favor of lifting revenue caps. But the Republican budget does neither.

“As a state, we are failing to keep pace with the ever-growing needs of our students, which have been compounded by the pandemic,” Stanford Taylor said in her statement on the Republican budget plan. “It is irresponsible to use one-time money designated for a pandemic response to meet ongoing needs, instead of a committed investment from the state, which our youth deserve. …  We are losing an opportunity to address learning needs at the expense of our students. This is not acceptable.”

Whether or not the federal Department of Education finds the Republican budget plan acceptable is still an open question. (The department press office did not respond to a request for comment on Friday.) “There are 50 states with 50 different funding formulas,” Thiel points out. It could be difficult in each case, he adds, “to try to tease out, is this education funding or not?”

If the federal government takes at face value the Republican plan to increase general school aid, it could find that Wisconsin is back in compliance and can receive the $2.3 billion in federal COVID relief funds that it warned were in jeopardy. If the feds look more closely at the GOP plan, they will find that the state is allocating funds for property tax cuts, not education, and, contrary to the stated intention of the federal law, using federal funds to fill gaps while giving away money in tax breaks.

Meanwhile, school officials and community members around Wisconsin are objecting that the GOP budget gives them a zero percent increase in funds, after years of cuts and in an economic environment that makes a different approach possible.

On Monday, students, elected officials, education, community and business leaders from around south central Wisconsin plan to hold a press conference at 10:00 a.m. on the steps of the State Capitol to kick off a statewide “Day of Action” protesting the Legislature’s proposed K-12 funding.

“The budget proposal, if passed, would have long-lasting, detrimental effects on public education and Wisconsin students for years to come,” a press release for the event, which will include the superintendents of the Madison and Sun Prairie school districts, stated.

“A long history of minimal increases to education has left Wisconsin nearly last in the nation when comparing education funding increases at the state level,” the group added. “This has forced school districts across our state to continually return to the local taxpayer to approve referendums simply to maintain current operating levels. A $0 per student increase on K-12 funding for the 2021-2023 Biennium State Budget, as was recently passed by the Joint Finance Committee, is not sufficient to support pre-K-12 education.”

GOP ‘school funding’ increase is just a property tax cut was originally published by Wisconsin Examiner.