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Relief from Revenue Caps

Background:

In 1993, the Legislature passed Wisconsin Act 16, commonly known as revenue caps, which essentially froze school spending at 1992 levels. Act 16 was passed to hold down property tax increases by limiting the total amount of money a school district is entitled to receive in state aids and from local property tax levies.

To compensate for revenue lost from these limitations, the Legislature in 1995 agreed to pay 66.7 percent of total state and local school costs. But, in reality, the state pays about 54 percent of school costs, well below the two-thirds claimed. The difference (12.7 percent) is used for property tax relief, not school funding.

The law was initially passed as a temporary method of controlling property taxes. The revenue limits were supposed to be evaluated after five years, but that process was short -circuited when the Legislature made the caps permanent without evaluating their impact on schools and children.

Legislative History:

WEAC secured relief from revenue caps as part of the 1999-2001 state budget by: (1) allowing school districts to increase summer school pupil counts; (2) continuing relief for more than 150 school districts suffering from declining enrollments: (3) providing an inflationary index for revenue caps; and (4) by increasing low revenue adjustments for low-spending poorer school districts.

Additionally, WEAC fought for increased categorical aids to schools outside the caps. This was achieved by: (1) expanding the SAGE class size reduction program ($77.3M); (2) creating new alternative education grants ($5 million per year); and (3) improving access to federal dollars received through Medical Assistance reimbursement for school-based medical services.

WEAC Position:

The Wisconsin Education Association Council supports the eventual full repeal of revenue caps on local school districts.

WEAC Supports Additional Relief from Revenue Caps by Creating Exemptions in the Following Areas:

Allowing schools to count 100% of their FTE summer school pupil counts for the purpose of calculating revenue caps.
Establishing programs to prevent criminal activities in schools.
Maintaining or creating school breakfast and lunch programs.
Training educators to use modern technologies in the classroom.
Participating in statewide tournaments and competitions.
Unanticipated expenditures including: utilities, maintenance, security, debt service, compliance with court or federal orders, inservice training, legal expense, mentoring programs, special assessments and any other purpose specified by the Department of Public Instruction in administrative rules.

Talking Points:

A joint survey by WEAC and the Wisconsin Association of School District Administrators (WASDA) showed that almost half of Wisconsin school districts are deferring maintenance on school buildings. Over the last five years, approximately half the districts reported delaying the purchase of computers and other technology. One-third have increased class sizes, and nearly 100 percent have made at least one cut in programs for students.
The state’s micro-management of school districts has resulted in conflicting policies that narrow the curriculum. One state policy raised standards and required performance testing in five academic areas; another reduced fiscal support through revenue controls. The result: a budget shortfall that forces districts to cut programs. When budget cuts are called for, districts will eliminate “nonessential” courses and programs, such as health education, enrichment programs, electives and remedial programs for students.
Revenue controls deprive local communities of their authority to create and maintain the schools they want.
Revenue controls are based on student enrollment. They ignore districts’ actual expenses, the learning needs of students, and economic circumstances.

For Additional Information:

Contact Bob Burke in the WEAC Government Relations Division at 800-362- 8034 ext. 254 or by e-mail at burkeb@weac.org with any reactions, comments or questions.

Return to Legislative Agenda index

Posted June 6, 2000