2007 Legislative Proposal Summary

Executive Summary
  1. Repeal the primary aid hold harmless provision.
  2. Eliminate special adjustment aid and distribute the funds as equalized aid.
  3. Set the school district low revenue ceiling at the average per pupil shared cost in the previous year and set the secondary cost ceiling per member at the average level of the low revenue ceiling one year earlier.
  4. Allocate the school property tax levy credit to school district taxpayers on an equal per pupil basis.
  5. Eliminate most categorical aids and distribute the funds as equalized aid.
  6. Create an equalized aid weighting for special education.
  7. Create an equalized aid weighting for economically disadvantaged students.
  8. Create an equalized aid weighting for students with limited English language skills.
  9. Provide a separate appropriation to fund charter schools.

The following explains the proposals in detail:

  1. Repeal the primary aid hold harmless. As a replacement for minimum aid, the primary aid hold harmless provision effectively eliminates any spending disincentive for property wealthy, high spending districts. The primary aid is held harmless from the effect of negative secondary or tertiary aid.

    The primary aid hold harmless should be repealed beginning in 2007-08 so that negative secondary and tertiary aids are allowed to offset primary aid. This would allow the equalization aid formula to work without
    obstruction.    Top
  1. Eliminate special adjustment aid and distribute the funds as equalized aid. Special adjustment aid is gradually becoming a substitute for the primary aid hold harmless. As property values grow in relatively wealthy districts, their primary aid payment would decline. Special adjustment aid maintains their state aid at 85% of the prior year level regardless of wealth. The funds to make this payment are taken from the equalization aid appropriation and otherwise would be distributed to poorer districts.

    Special adjustment aid should be eliminated, and these funds should be distributed as equalized aid beginning in
    2007-08.    Top
  1. Set the school district low revenue ceiling at the average per pupil shared cost in the previous year. The low revenue ceiling is the amount of revenue (general aid and levy) per pupil a district is authorized to raise without being subjected to the revenue limits. That ceiling is $8,400 per pupil for 2006-07.

    The low revenue ceiling should not be an absolute statutory amount, but should increase as conditions change. All districts should be allowed to raise an amount of revenue which would bring them into the normal range among districts. The low revenue ceiling should be set at the statewide average per pupil shared cost in the previous year.

    The secondary cost ceiling is the boundary between costs that are aided at the secondary level and those aided at the tertiary level. When Wisconsin went to a two tier formula this cost ceiling (then, primary) was intended as a spending disincentive for spending beyond the normal range of up to 10% above the state average. Since then the concept of discouraging high spending has been lost and this ceiling is currently set at 90% of average school district shared costs per member in the previous year.

    School districts which bring their spending level up to the revenue ceiling should be aided at the secondary level. Their efforts to come up to the prior year average of other districts should not be penalized by reducing their marginal aid to the tertiary level.

    The secondary cost ceiling should be set at the level of the low revenue ceiling one year earlier.    Top
  1. Allocate the school property tax levy credit to school district taxpayers on an equal per pupil basis. Ideally, the school property tax levy credit would be equalized in order to minimize the tax rate disparities among school districts in implementation of the state reponsibility to provide a free public education. Currently the school credit does not consider relative property wealth or the need of school districts or individual taxpayers.

    School Facts ë06 by the Wisconsin Taxpayerís Alliance clearly shows that this credit goes disproportionately to taxpayers in relatively wealthy, high spending school districts. On a per pupil basis last year the amount of the credit to school district taxpayers ranged from a low of $229 in the Menominee Indian District to a high of $2,148 in Phelps and the statewide average was $540. Taxpayers in 23 districts received credits of $300 or less. At the same time taxpayers in 33 other districts, all but one of which had budgeted expenses of more than state average, received credits of more than $1200 per pupil    .

    School districts and other local units of government are being told to cut spending for the purpose of holding down property taxes. The current school property tax levy credit disproportionately subsidizes high spending school districts and will increase $123.70 (26.4%) this year. It should be revised to base the payment to school district taxpayers on the state average per pupil amount.Top
  1. Eliminate most categorical aids. Many categorical aids are distributed with little or no regard for local wealth or overall need. Those categoricals that are intended to address special needs, limited English proficiency, poverty or children at risk of not graduating are inadequately funded. The current funding levels, when combined with the revenue limits often force school districts to chose between addressing the needs of these children or providing other regular education programs.

    All categorical aids to school districts except school library aids, Technology for Educational Achievement in Wisconsin (TEACH) aid and grants, Head Start supplements, tuition and transportation for open enrollment, Alcohol and Other Drug Abuse (AODA) program revenue grants, school lunch grants, morning milk grants, and school breakfast grants should be distributed as equalized aid. Categorical aids for disabled students, SAGE, P-5, children at risk and bilingualbicultural programs should be phased out over three years as pupil weightings for disabled students, economically disadvantaged students and students with limited English language skills are phased in. Redirecting those phased out categorical aids would better address the needs of student populations cited by the Wisconsin Supreme Court in the new equal educational opportunity standard.    Top Ý
  1. Create an equalized aid weighting for special education. Wisconsinís system of financing special education costs does not adequately take disabled students into account as required by the Supreme Court. As a result, districts with high concentrations of disabled children (concentrations range from 5.5% to 30.6% of enrollment) are penalized for providing special education services. Specific problems are:

    1. Aid as a % of costs which began at 70% has declined to 27%.

    2. Since 1991-92 per pupil aid is expected to drop $33 while per pupil costs will increase about $4,441.

    3. School district revenue limits do not recognize unaided special education costs.

    4. Equalization aid covers only a small fraction of unaided special education costs. Most districts are in tertiary aid because their per pupil spending exceeds the secondary cost control (90% of average). For those districts with below average property wealth per pupil the marginal aid is small; for those districts with above average per pupil value, their secondary aid is actually reduced.

    Ideally, state assistance for special education would not encourage high spending or inappropriate labeling of children. A system based on the services actually provided to disabled students would be completely accountable. All this can be accomplished by creation of a new system of financing special education based on the state average cost of special education services provided, the service level specified (frequency, duration and location) in the Individual Education Program (IEP), and the actual services provided to students.

    This additional assistance would best be provided in the form of a pupil weighting system to be phased in over a
    3 year period. Creation of such a system would assure an annual allowable revenue increase sufficient to meet special educational needs and inflation. This would avoid the forced reduction in general education programs now faced by many districts in the adoption of their annual budget.

    We would begin with the IEP. Today school districts have reached a point where the IEP is automated and the data is readily available by computer. The payment to school districts would be based on the amount of time students actually receive special education services and the state average cost of providing those services. DPI would annually calculate the actual costs for each disablity    .

    Here are three examples:

    · It is estimated that the cost of serving children with autism, severe cognitive impairment, emotion/behavioral impairment, orthopedic impairment, visual impairment, traumatic brain injury and children who are deaf/blind is about 120% more than the cost of serving a child without such additional educational needs. We would propose to count the time that a child receives any of these services at an additional 120% for revenue limit and state aid (foundation or equalization) purposes. For example, a child receiving these special education services for 75% of the time would be counted as an additional 90% (75% X 120%) full time equivalent student FTE.

    · Similarily, it is estimated that the cost of serving children with hearing impairment, other health impairment and mid to borderline cognitive impairment is about 50% more than the cost of serving a child without those additional education needs. We would propose to count the time that a child receives any of these services at an additional 50% for revenue limit and state aid purposes. For example, a child receiving these special education services for 60% of the time would be counted as an additional 30% (60% X 50%) FTE.

    · Further, it is estimated that the cost of serving children with learning disabilities and speech/language impairment is about 20% more than the cost of serving a child without these additional educational needs. We propose to count the time that a child receives any of these services at an additional 20% for revenue limit and state aid purposes. For example, a child receiving these special education services for 25% of the time would be counted as an additional 5% (25% X 20%) FTE.

    The time each child receives special education services would be counted so that the district would receive
    payment based on the amount and cost of services provided. The time the child spends in a regular classroom and not receiving special education services would not be counted. Each year DPI would review and calculate the state average cost of serving each disability. The purpose of the DPI review is to set the FTE factor for each disability at the appropriate level. For example, DPI would determine whether the cost of providing special education services to a moderately disabled child (cognitive impairment) is actually 50% above average, or whether it may be 45% or 60%. DPI would also be authorized to review and audit the use of the additional aid to make certain it is used to serve disabled children.Top
  1. Create an equalized aid weighting for economically disadvantaged students. Research has long indicated that poverty is a significant predictor of lack of school success and some has shown poverty to be the most significant. Some school districts face educational overburdens because many of their students come from poverty backgrounds.

    The state has created the SAGE (Scholastic Achievement Guarantee in Education) program which provides additional funds (up to $2000 per pupil) for the purpose of reducing class size to 15 in grades K-3 in schools or school districts with concentrations of poverty. The $2000 per pupil grant has never been increased, some high poverty schools do not have the program and nothing is provided for grades 4-12.

    It is proposed to provide additional assistance to school districts serving poor children in a single comprehensive form throughout their school career. The form of this additional assistance would be a 20% pupil weighting for every child eligible for free or reduced lunch. This pupil weighting would increase the pupil count for both aid allocation and revenue limit purposes; and would replace existing categorical aid programs for economically disadvantaged and at risk children over a 3 year period beginning in 2007-08    .

    These funds must first be used to lower class size to 15 in grades K-3 in any school which is or would become eligible for SAGE funding. After that, the funds can be used for the following purposes:
    (1) reduce class size to 15 in grades K-3 in other schools
    (2) reduce class size to 25 in grades K-5
    (3) keep the school building open longer to provide after school programs and activities for students
    (4) make educational and recreational opportunities and community and social services available to all school district residents
    (5) provide a rigorous academic curriculum
    (6) provide staff development, peer review, mentoring and accountability
    (7) provide structured educational experiences for fouryear-olds
    (8) establish a council composed of teachers, parents, school board members and community leaders
    (9) provide educational programs to raise student achievement based on proven effectiveness, including school-wide programs
    (10) or other programs to serve low income children approved by the school board. Annually, each school district must report to the state superintendent on how it has used the additional grant funds. Biennially, the Legislative Audit Bureau shall review and report on the effectiveness of the use of the additional grant funds.Top
  1. Create an equalized aid weighting for students with limited English language skills. Current law provides categorical aid which covers about 12% of the cost of providing bilingual/bicultural programs to children who are unable to do ordinary class work in English. Since 1991-92 the population has increased while the aid has not. As a result, the per pupil aid has been cut in half.

    Another problem is that this aid does not apply to all children. It only applies where there are 10 or more in K-3 and 20 or more in grades 4-12. Remaining costs are covered by general school district revenues. Effectively, unaided bilingual/bicultural program costs consume revenues that otherwise would be allocated for regular education programs. In school districts with large proportions of non- English speaking students, larger shares of funding for general school operations are eroded and disparities in the regular education programs among districts are created.

    Pursuant to the Courtís decision that children with limited English language skills be taken into account in our school finance system, it is proposed to provide additional assistance to cover the cost of providing bilingual/bicultural programs for children who are unable to do ordinary class work in English. This additional assistance would best be provided in the form of a 10% additional equalized pupil weighting. This weighting would increase the pupil count for aid allocation and revenue limit purposes; and would replace existing categorical aid for bilingual/bicultural programs over a 3 year period beginning in 2007-08.

    Annually, each school district must report to the state superintendent on how it has used the additional grant funds. Biennially, the Legislative Audit Bureau shall review and report on the effectiveness of the use of the additional grant funds.    Top
  1. Provide a separate appropriation to fund charter schools. Currently schools chartered by non public school district entities are funded by reducing equalization aid to public school districts. For 2006-07 the level of state aid to school districts in total is expected to be about $45 per pupil below what it would have been without this aid reduction. School districts are effectively forced to make up the lost revenue with higher property taxes.

    The state should fund the schools chartered by entities other than school districts with a separate appropriation rather than reducing aids to public schools.    Top

Each of these proposals is important on its own; however, AEF does not believe equity can be significantly improved unless all are considered and enacted.