State’s Technical Colleges Have Financial Clout

Milwaukee Area Technical College. File photo by Carl Baehr.

In June Republicans introduced an amendment that seem to come out the blue and was attached to an unrelated bill. The amendment proposed to eliminate all property tax funding for operational expenses for technical colleges in Wisconsin, which would have been a massive, $249 million cut in funding.

That seemed radical even for the often outlandish GOP leaders of the Legislature, yet the amendment was introduced at the State Assembly Committee on Ways and Means and passed on a party line vote on the very same day.

A mini-furor soon arose, with representatives of the state’s technical colleges complaining they weren’t consulted. Wisconsin Technical College System President Morna Foy charged that the change would be the biggest shift in tech college funding in more than a century.

In the face of pushback from supporters of the system, which includes 16 technical college districts, 51 campuses and numerous outreach centers serving some 250,000 students, not to mention many businesses in the state who depend on its graduates for new hires, Republican legislators backed off on this proposal.

Which left the question: where did this proposal come from and why?

One study that probably helped trigger the proposal was done by the non-partisan Wisconsin Policy Forum in April. The WPF report had the snoozer headline, “Higher education funding stabilizes overall but enrollment still falling,” and all but buried a bombshell finding: the state’s technical colleges received $17,153 per pupil in state and local tax and tuition funding in 2021. That was fifth-highest in the nation, far above the U.S. average of $11,714. Meanwhile, funding for the state’s four-year colleges was $15,079 per pupil, which ranked 43rd nationally, well below the U.S. average of $17,733.

Some in the media jumped on that statistical comparison, which probably helped grab the attention of legislators.

In May came a report by the conservative Wisconsin Institute for Law & Liberty (WILL), which is rather liberal in its use of capital letters, entitled “WI TECHNICAL COLLEGE SYSTEM FUNDING IS ‘TAXATION WITHOUT REPRESENTATION.’” It noted that of 17 states it identified as providing some funding of technical colleges with property taxes, 11 have elected members making this decision. Whereas Wisconsin’s technical college boards, which can levy taxes, have only appointed members. The report recommended that the Legislature could move to fully replace property tax funding with state aid, or create a system to elect at least some portion of the membership on tech college boards.

The WILL report probably drew the attention of GOP legislators, who less than a month later introduced that surprise amendment. But the study was ignored by the media. It was not exactly news that technical colleges did not have elected boards, nor was it a scoop that some other states had elected boards, as we shall see.

Wisconsin’s rather unique system goes back to 1911, when it became the first state in the U. S. to establish a system of technical colleges. The legislation provided some state funding, required every community of 5,000 or more to establish a local board with taxing authority, and created a “State Board of Industrial Education.” It was likely a reform that come out the state’s Progressive movement, and perhaps its Socialists and the fact that Wisconsin was a leading state for manufacturing. So from the beginning Wisconsin’s technical colleges got property tax funding while the UW four-year colleges did not.

A 2015 study by the Wisconsin Taxpayers Alliance (which was later absorbed by the WPF) noted how unusual it was for such colleges to get so much local tax funding: As of 2012, it found, technical colleges in 18 states received no local funding. “In another seven, local sources accounted for less than 10% of all revenue. Even among the 25 states in which local funds represent over 10% of total revenue, local monies are the smallest portion of revenue in nine.” In only three states did local funds provide the majority of total funding, with Wisconsin “at the top of the list, with local funds representing 73.9% of revenue.”

It was around this time that the Republican-controlled Legislature moved to cut back the property tax revenue for technical colleges: Beginning in 2015, property taxes going to technical colleges were cut in half in exchange for which the Legislature increased state funding to the colleges by an equal amount, “just over $400 million,” as a 2020 WPF study noted.

While that significantly reduced the percent of the technical colleges’ budgets coming from property taxes, it did not change the relatively generous funding for the system compared to others nationally. As the 2020 WPF study noted, a report by the Center for American Progress “found Wisconsin was the only state in the country in which revenues per FTE student were greater for two-year colleges than for four-year institutions.”

As its most recent study found, Wisconsin technical colleges are still far better funded than in most states. “A major reason for the difference is the local property tax funding available to help support WTCS campuses,” the forum noted.

All of which might help explain why Republicans suddenly decided to take a meat ax to the tech college system. But as the WILL report cautioned, “Technical colleges serve an important role in preparing the next generation of workers for the workforce… Within six months of graduation, 93% of graduates are employed, and 80% are employed in the field they received training in. Additionally, 92% of graduates stay in Wisconsin, whereas only 80% of graduates from the University of Wisconsin System stay in the state.”

Actually the retention figures for the UW System may be just as impressive, as more of its students are likely to come from out of state. Together the two systems are, year after year, educating Wisconsin’s future labor force.

Technical colleges, moreover, are tremendously diverse. The 2020 WPF study cited research showing that 61% of Native American, 55% of Black, and 49% of Hispanic undergraduates in Wisconsin in 2019 attended technical college system schools compared to 41% of white students.

In a less partisan time, the disproportionately high funding for tech colleges and and low funding for the UW system would trigger calls for a blue-ribbon commission to analyze the systems and make recommendations. One obvious question among many possible issues, is whether at a time of decreasing enrollment there is any overlap between (or within) the systems that might help cut costs without reducing services.

But given the massive partisan divide in Wisconsin, and a gerrymandered Republican Legislature that has been starving the UW System since 2011, it’s hard to imagine any bipartisan policymaking will rise to the fore. Yet the statistics from the WPF strongly suggest we are underfunding the UW system and quite possibly overfunding our technical colleges. At some point, perhaps after we get fair legislative maps in Wisconsin, state policymakers surely need to study the two systems.