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Maintain School Levy Tax Credit to ensure all school district taxpayers receive property tax relief.
- Under current law (sec. 121.01, WI stats.), the state provides financial assistance to school districts to achieve two basic policy goals: (1) reduce the reliance upon the local property tax as a source of revenue for educational programs; and (2) guarantee that a basic educational opportunity is available to all pupils regardless of the local fiscal capacity of the district in which they reside.
- The school levy tax credit (SLTC) is extended to all taxable property and helps to reduce the local property tax. Since the levy reduction under the SLTC (excluding the effects of using a three-year levy average) is proportionate for all districts and produces a similar reduction in tax rates, the credit could be characterized as neutral with regard to equalization.
Index the Per Pupil Revenue Limit to inflation to support quality educational opportunities.
- The challenge confronting nearly all school districts is that the allowable per pupil increases under revenue limits are not keeping up with inflation. As a result, school budgets are falling behind, and many school districts are being forced to make cuts or go to referenda.
- Link annual adjustments to per pupil revenue limits (and per pupil aid) to inflation (if positive) in future years.
Modify Revenue Limit Enrollment Average to the highest of the last five years to further lessen impact of declining enrollment.
- Under current law, districts are eligible for a declining enrollment exemption, which is intended to serve as a parachute during times of declining While the exemption is critically important in allowing districts to make up for the loss in revenue, once enrollment begin to level, districts experience immediate and significant reductions in their revenue raising ability, causing serious and challenging budget holes.
- Modify the funding formula to allow a school district to base its revenue limit on its highest enrollment during any of the past five school years, rather than its average enrollment in the past three years. This change would provide school districts with declining enrollment with another tool to alleviate budget challenges.
Raise the Special Adjustment Aid level to 90 percent of the prior year general aid payment to further cushion the effect of reductions in general aid from one year to the next.
- The state provides additional state general aid to districts to help cushion the impact of state aid reductions from one year to the next, commonly referred to as a “hold harmless” payment. Such aid benefits a wide variety of districts, including 16 high property value districts that receive no state equalization aid; but also districts in declining enrollment and others with large spikes in their property valuation.
- Under current law, special adjustment aid ensures that a district’s general school aid payment is no less than 85 percent of its prior year payment. In FY17, 61 districts (nearly 15 percent) qualified for Special Adjustment Aid.
Maintain current law with respect to School District Referenda.
- High property value school districts that receive little or no state aid – especially small rural districts experiencing declining enrollment – disproportionately rely on local operating referendum to keep pace with inflation in school costs.
- These districts often must either cut programs and staff or go to the voters with an operating referendum in hopes of maintaining existing programs and staff for their students.
Maintain Per Pupil Adjustment Aid to provide additional needed resources to all school districts.
- The per pupil adjustment aid provides state aid support to all students, regardless of where they live.
- Approved 2017-19 State Budget: Per pupil payments are set at $450 per pupil in FY18 and $654 per pupil in FY19. However, the base for future years is set at $630 per pupil, beginning in FY20, and thereafter.
Increase Funding or Revenue Limit Flexibility for Pupil Transportation.
- Individual district transportation costs vary widely among districts. School districts with significant geographic areas are at a competitive disadvantage because they are subject to revenue limits like all other districts but must spend a larger portion of their budgets on transportation rather than direct instruction of students.
- More state support is needed so that instructional dollars are not used to pay for transportation to and from school. School districts should also be given authority to exceed the state revenue limit by a specified amount for transportation-related costs.