Episode 3: Education, property taxes, and pie

Imagine that school funding

were a pie.

That's Catherine Kokel.

She's our colleague who covers education for WUWM, Milwaukee's NPR.

So if school funding in Wisconsin were a pie, it would be sliced in about four uneven ways.

About 45% of that pie comes from state aid, which is money collected by state taxes and then redistributed to school districts across the state.

About 7% of that pie comes from federal aid, and the rest of it comes from property taxes and local revenue.

To some extent, individual school districts can decide how much they collect in property taxes from their community.

But that, too, is limited by the state of Wisconsin.

That funding formula has what's called a revenue limit.

So in any given year, that revenue limit can only go up by so much.

And the amount of money that goes into that formula is also decided at the state level by legislators.

Essentially, the revenue limit restricts the size of a district's funding pie.

Revenue limits were put into effect more than 30 years ago.

The idea was that they would control property taxes.

In 1993, these revenue limits came into the state funding formula and it locked high spending districts at a higher level of funding and lower spending districts at a lower level of funding.

This was basically meant to be a check on property taxes, but a lot of school districts think that this created an unfair playing field and they say that the state has not increased those revenue limits to keep up with rising costs.

And that is true.

For about 15 years, the state raised revenue limits alongside the rate of inflation.

Schools were still locked into different spending amounts, but it helped ensure that school funding kept pace with costs.

But then the Great Recession hit.

In 2008, in a response to the recession, the legislature did what we call decoupling.

And they decoupled the amount that that revenue limit can be raised from the rate of inflation.

And as a result of that, school districts will say, hey, look, our costs have gone up a ton since 2008, obviously.

But the amount that our revenue limit can be raised has not followed.

Imagine that school funding

were a pie.

That's Catherine Kokel.

She's our colleague who covers education for WUWM, Milwaukee's NPR.

So if school funding in Wisconsin were a pie, it would be sliced in about four uneven ways.

About 45% of that pie comes from state aid, which is money collected by state taxes and then redistributed to school districts across the state.

About 7% of that pie comes from federal aid, and the rest of it comes from property taxes and local revenue.

To some extent, individual school districts can decide how much they collect in property taxes from their community.

But that, too, is limited by the state of Wisconsin.

That funding formula has what's called a revenue limit.

So in any given year, that revenue limit can only go up by so much.

And the amount of money that goes into that formula is also decided at the state level by legislators.

Essentially, the revenue limit restricts the size of a district's funding pie.

Revenue limits were put into effect more than 30 years ago.

The idea was that they would control property taxes.

In 1993, these revenue limits came into the state funding formula and it locked high spending districts at a higher level of funding and lower spending districts at a lower level of funding.

This was basically meant to be a check on property taxes, but a lot of school districts think that this created an unfair playing field and they say that the state has not increased those revenue limits to keep up with rising costs.

And that is true.

For about 15 years, the state raised revenue limits alongside the rate of inflation.

Schools were still locked into different spending amounts, but it helped ensure that school funding kept pace with costs.

But then the Great Recession hit.

In 2008, in a response to the recession, the legislature did what we call decoupling.

And they decoupled the amount that that revenue limit can be raised from the rate of inflation.

And as a result of that, school districts will say, hey, look, our costs have gone up a ton since 2008, obviously.

But the amount that our revenue limit can be raised has not followed.