School funding is front and center in Wisconsin election

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School funding is front and center on the ballot next month in Wisconsin as the candidates for governor pledge to raise spending and school districts ask voters for $1.4 billion through borrowing or revenue cap exemptions.

Wisconsin school districts have been asking for, and getting, more money in the last two years, according to a report this month from the Wisconsin Policy Forum.

“Despite recent increases in state funding, more school districts are turning to referenda to increase spending,” the report said. “In numbers and total dollars, successful school referenda in 2018 may exceed those in 2016, which marked the highest year since 2001.”

A total of $1.7 billion was approved in 2016, for a 79% approval rate. That figure included $1.35 billion of borrowing.

Voters next month will decide 82 referendums sought by 61 school districts with 44 requests asking for authority to issue $1.25 billion of debt, 24 seeking non-recurring revenue limit exemptions for $157 million, and 14 asking for a recurring revenue limit exemption for $26.1 million a year.

The districts are seeking funds to build new schools, renovate existing ones, make safety and security improvements, and maintain educational programming.

In questions on ballots between February and August, voters faced 74 questions from 55 districts adding up to $752 million of requests to exceed state revenue caps or issue bonds. They approved 63 totaling $648.1 million, an 85% approval rate. The number includes $515.8 million in debt.

The biggest bond referendums on the November ballot are from Middleton-Cross Plains Area School District, seeking $138.9 million; Wauwatosa seeking $124.9 million, Stevens Point seeking $75.9 million, West De Pere with two questions seeking $74.7 million, and Oak Creek–Franklin seeking $60.9 million, according to the Wisconsin Department of Public Instruction.

Since 1990, voters have signed off on more than 1,600 questions totaling $12 billion.

Wisconsin has 421 public school districts that rely primarily on state aid and their property tax levy. The levy is limited by state caps first imposed in 1993-1994. Most debt over $1 million that isn’t repaid with funds within the revenue limit must be approved by voters.

The number of ballot questions, funding levels, and approval rates have been on the rise with several reasons behind the growth, the forum’s report said.

“Over the past two decades, the number of referenda on the ballot has tended to reflect the health of the economy. The share of referenda approved by voters has dipped during economic downturns and their aftermath but overall has increased since 1999,” the report said.

More than 160 questions were posed in each year between 1999 and 2001 when the economy was in an upswing. As the economy tanked, the number of referendums declined sharply to less than 110 in 2002 before rising again in 2006.

During The Great Recession and through 2013, they dropped.

“This occurred even though state revenue limits for districts dropped $443 million, or 5.5%, in the 2011- 12 school year,” the report said. “One factor that helped schools balance their budgets in a time of decreasing revenues was the passage of 2011 Wisconsin Act 10, which lowered salary and benefit costs for districts outside of collective bargaining.”

Referendum questions picked up in 2014 and reached 154 in 2016 as the economic recovery picked up speed and the municipal market offered districts favorable interest rates.

The total number expected this year is 156 if none are withdrawn or a natural disaster prompts an emergency referendum before the end of the year.

The latest increase comes as the state has raised funding levels in recent years. General aid rose by $185.9 million or 3.4% in the first year of the current biennial budget and $263.1 million, or 4.7% in the second year. The fiscal biennium ends June 30. The legislature also separately increased rural district funding.

“Without these actions, it is possible the number of referenda would have been higher,” the report said.

Voters have tended to look more favorably on ballot questions since 2003 and they reached a 79% approval rate in 2016. The report cited a poll by Marquette Law School that found improving public opinion toward school funding between 2013 and 2018.

“The improvement in the economy and this potential change in public sentiment may help to explain the higher rate of approval for school referenda,” the forum report concluded.

Other factors that could be at play in the number of questions include the need to deal with aging facilities or upgrade classroom technology and security, and growing enrollment in some areas that require new schools. Many districts nationally are citing the need for security improvements in the aftermath of school shootings.

Lawmakers are taking notice and some Republicans have signaled they expect to resurrect debate over how to rein in spending questions through heightened restrictions.

“The potential for more ballot questions may also influence the next legislature and governor as they consider whether to increase aid to schools and state caps on district revenue,” the report said.

One new state rule that has taken effect this year limits districts to two referendum questions per year and they typically must go before voters during regularly scheduled elections. The forum said it’s not yet clear how the new rule will impact trends. “For instance, schools could seek fewer referenda and in smaller amounts overall or they might ask less frequently but in larger amounts,” it said.

GOVERNOR

Both candidates in the governor’s race — Gov. Scott Walker, a Republican who is seeking a third term, and state Superintendent of Public Education Tony Evers, who is a Democrat — have pledged to increase school funding.

Evers said Walker’s past budget cuts drove the need for referendums and he vowed to hike school spending to meet a prior two-thirds funding pledge the state long ago made but has failed to live up to. The two-thirds pledge coincided with the imposition of levy caps in the mid-1990s.


Evers proposed an even more dramatic increase in his education budget for the next biennium calling for a 10% increase with $1.4 billion more directed to schools.

“The budget I’m submitting responds to the very real challenges our schools and educators face each and every day,” Evers said in a statement when he submitted the plan in July. Evers has not said how the state should pay for the increase.

Walker on Monday highlighted his education spending increases in recent budgets and pledged like Evers to meet the two-thirds funding pledge.


“Looking ahead, we will fully restore the two-thirds commitment made by former Governor Tommy Thompson. Tony Evers wants to undo our reforms. That would take money out of the classroom and away from students and he would allow property taxes to go up to pay for it,” Walker said in a statement.

The goal is not that far off. The nearly $7 billion in school funding this year represents more than 65% of school costs. That’s up from $6.7 billion last year and a 64.8% ratio, and $6.5 billion the previous year for a 63.6%, according to a report last year from the Legislative Fiscal Bureau.

In other state news, the administration released fiscal 2018 results late Monday that showed the fiscal year ended with an undersigned general fund balance of $588.5 million, up slightly from the $579 million in fiscal 2017 and $41.2 million more than projected earlier in the year.

General fund tax collections grew by 4% or $626 million over the previous year. Income tax collections were $99.2 million higher than estimated and state expenses were $174 million lower than budgeted. The state deposited $33.1 million into its budget reserve bringing it to a modest $320.1 million.

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