Sen. Ellis Unveils Plan to Overhaul School Finance

Sen. Michael Ellis this week (December 1, 1999) unveiled a comprehensive proposal to overhaul Wisconsin's school finance system with the goal of restoring equity in education.

The plan would create a single statewide school property tax rate and implement a basic state grant program that accounts for the higher costs of educating special-needs students.

"This plan effectively restructures education financing for the new millennium to ensure adequacy, equity and equal opportunity for all children in Wisconsin," Ellis said in a summary distributed throughout the Capitol.

The plan, which Ellis describes as "a starting point for an honest dialogue," taps the same amount of money currently distributed to school districts, but uses an entirely new system for determining how it is distributed. It throws out the current system of school levy credits and eliminates many categorical aids.

The Ellis plan has two key elements. First, every student would receive a basic grant of $7,600. Additional funds would be provided to children with special educational needs, children with limited English proficiency, and children eligible for free or reduced-price lunches. Revenue limits, currently calculated for 426 separate school districts, would be replaced by a single revenue limit in the calculation of the basic grant. Two-thirds of total funding of these grants would be provided through state general purpose revenues derived from income and sales taxes.

The other one-third of the funding would come from the second key element of the plan — a state-levied property tax with a uniform mil rate. That rate would equal an estimated $8.58 per $1,000, compared to the current average rate of $11.30. Every homeowner throughout the state would pay the same rate for school purposes.

A local district would be free to raise and spend additional money but such additional spending would have to be authorized by referendum if 10% of district voters request a referendum.

Ellis said the current system of school finance — which is being challenged in a lawsuit now before the State Supreme Court — has become increasingly inequitable since it was last reformed in 1973-74. As a result, he said, Wisconsin now has a system in which "property-wealthy districts can tax low and spend high but property-poor districts ... must tax high just to spend low."

Ellis used the examples of the property-rich Gibraltar district in Door County and the property-poor Bowler district in central Wisconsin. In 1997-98, Gibraltar had a per-pupil value of $1.7 million, received $225 per pupil in general state aid and $464 in categorical aids, taxed at a rate of $4.15 to raise an additional $8,460 and spent $9,140 per pupil.

Bowler had a per-pupil property value of $88,193, received $4,867 per pupil in general aid and $321 in categorical aids, but still had to tax at a rate of $8.63 to raise an additional $690 per pupil.

"Bowler received more than seven times the amount of state aid per pupil as Gibraltar, yet it had to tax at a rate twice as high to achieve overall spending at 70% of Gibraltar's expenditures," Ellis said. "Simply by living in Bowler, Wisconsin, rather than Gibraltar, Wisconsin, a taxpayer must pay taxes at more than twice the rate in order to provide a child in the district with less. Clearly, wealth neutrality is not a component of Wisconsin's school finance system."

Ellis delivered his plan to the Association for Equity in Funding, which represents more than 150 school districts in its lawsuit challenging the current system of school finance. WEAC is an intervenor in the lawsuit.

Also at the Capitol, Sen. Brian Burke and Rep. Joe Plouff announced they were introducing legislation they said would address the inequities in the current system.

Plouff and Burke said they were introducing the bill on behalf of the Association for Equity in Funding. They said their proposal would create a guaranteed tax base for every pupil, resulting in an equal tax effort to fund expenditures per pupil.