The Effects of Revenue Controls 2005-06

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The Effects of Revenue Controls on the Programs and Services Offered by Wisconsin's Public Schools, 2005-06 School Year

A study by the Wisconsin Association of School District Administrators and the Wisconsin Education Association Council

Data Analysis and Written Analysis by Russ Allen, Ph.D., and Jeff Leverich, Ph.D. (WEAC)

Special thanks to Miles Turner, Executive Director of WASDA, and to the 268 district superintendents who participated in this study.

Overview

Superintendents say 'No Child Left Behind' law is failing Wisconsin schools

One-fourth of superintendents surveyed say their district has considered consolidation or dissolution

Since 1993-94, the Wisconsin Association of School District Administrators and the Wisconsin Education Association Council have worked together to determine the effects of the revenue controls law on the programs and services offered by public schools. To collect this information, questionnaires were sent to school superintendents during the summer of 2006; this year 268 responded (63%). On average, approximately 69% of superintendents have participated in each of the studies.

The Revenue Controls Law

In 1993, Wisconsin passed legislation to control school costs and reduce property taxes. This law limits the amount of revenue that districts are allowed to raise from one year to the next by a specified amount—for the current school year the amount is $256 per student. The revenue controls were supposed to last for a five-year period; however, in the 1995-97 budget the controls were made permanent. That same year the State of Wisconsin committed to fund two-thirds of the total costs of public education statewide.

Critics point to at least two significant problems with the current law:

The law treats all children as though they cost the same to educate, when in reality, many children require significantly more services (and resources) than others.
The law assumes that there is a one-to-one relationship between school district costs and enrollment. This makes it difficult for districts with declining enrollment. For example, when students leave a district, revenue is reduced even though fixed costs (such as heating, transportation, and maintenance) remain the same. In fact, many fixed costs, such as those related to heating and transportation, are increasing dramatically. Declining revenues in combination with increasing costs produce budget shortfalls.

Fifty-four percent of the districts participating in this study report they are losing students. Furthermore, about the same proportion project losses over the next few years.

Significant Findings from this Study

For the first time in this annual survey, superintendents were asked if their district was contemplating consolidation or dissolution.

More than one-quarter (26%) of Wisconsin’s school districts reported that their district had held such discussions. The vast majority (80%) considered only consolidation, while 20% included dissolution in their conversations.
The average district holding such discussions is small in size (729 students) and has experienced little growth in enrollment since 1993 (+.81%). In contrast, among districts reporting no such talks, the average size is a much larger (2,006 students), and the district has shown an average increase in enrollment of 9.1% since 1993.

Superintendents representing districts that had discussions about consolidation were asked a series of follow-up questions. More than 90% said the discussions were the result of fiscal problems. However, no one indicated that the district actually had joined with another. Fifty-seven percent reported that no action was taken, while 33% reported they continue to collect information about this option.

When asked about the possible effects of consolidation, superintendents responded as follows:

Level of support in the community: 23% indicated there was a “fair amount” of support for consolidation, contrasted with 45% who answered “very little” and 7% who said “almost none.” Fifteen percent reported that they did not know.
Effects on property taxes: 17% thought consolidation would have a positive effect on property taxes. Forty-one percent said “negative,” while 33% pointed out that the effects would be “neutral.
Effect on the community’s economic health: 12% stated that consolidation would have a “positive” effect on the community’s economic health. This compares with 41% who said “negative” and “36% who thought the effects would be “neutral.”

Superintendents also were asked about the effects of consolidation on four measures of educational quality.

Table 1 The Effects of Consolidation on Education
	Positive	Negative	Neutral	Don't Know
Effects on extracurricular programs	36%	41%	21%	2%
Effects on parental involvement	7%	39%	42%	12%
Effect on students	36%	26%	19%	19%
Effects on overall educational quality	36%	19%	38%	7%

Only 7% thought that such an action would have positive effects on parental involvement in the schools. On other three questions, 36% of superintendents (mostly the same ones) thought that consolidation would benefit students, have a positive effect on extra-curriculars, and improve the overall quality of education.

Significant Findings from Previous Studies

Over the past thirteen years there have been dozens of important findings. However, the five that follow are among the most salient:

Last year, superintendents reported that several content areas are being cut or eliminated as a result of the revenue controls. The most vulnerable areas are business education; family and consumer education; foreign languages; music, art, band/orchestra; physical education/health; and technology/vocational education.
Superintendents again and again have said that the long-terms effects of the revenue controls on educational quality have been negative. This negative perception is not unexpected because this legislation was enacted in order to reduce and control property taxes. It was not promoted as a way to improve schools.
On several occasions, superintendents report that the revenue controls have caused cuts in programs and services, resulting in conflicts or disagreements between regular and special education teachers over the use of resources. In their written comments, many superintendents criticized the state and national governments for failing to adequately fund special needs programs.
Eight in ten superintendents report that the revenue controls are harming their district’s overall educational quality.
Ninety percent of superintendents say they want greater flexibility at the local level to exceed the revenue limits.

For the results of previous years' studies, go to the OnWEAC Resource Page on School Funding and scroll down to Research and Perspective.

Overview

Part 1

Part 2

Questionnaire Results (pdf)

Posted February 18, 2007