Budget Brief: The Need for Revenue Cap Flexibility

Background

The state-imposed revenue caps, which limit the amount of money school districts are entitled to receive in state aids and property taxes, are keeping many school districts from providing classrooms that work. Districts are being forced to delay improvements in necessities such as building maintenance, school security measures, and the purchase of computers and other technology. They have also cut or eliminated important programs and services for children. Superintendents also report that overall educational quality is declining as a result of revenue caps.

The Wisconsin Education Association Council supports full repeal of state-imposed revenue caps on local school districts. However, this is not likely to happen in this biennial budget. WEAC is part of an Education Community Coalition seeking a bare minimum level of flexibility under revenue caps as part of the 2001-2003 state budget.

School administrators, educators, parents and local school board members have joined together to tell stories about how revenue caps are harming the quality of public education in their communities. Individuals from these various backgrounds appeared as panels at each of the Joint Finance public hearings on the state budget and are now personally visiting with legislators to seek flexibility under revenue caps.

The Education Community Coalition composed of groups supporting flexibility under revenue caps includes; the Wisconsin PTA, the School Administrators Alliance, the Wisconsin Federation of Teachers, the Institute for Wisconsin's Future, the Wisconsin Coalition for Advocacy, and representatives from the Janesville, Madison and Milwaukee school districts.

WEAC Supports a 1% Solution Funded As Part of General Equalization Aids While Maintaining Inflationary Adjustments and Summer School Funding

WEAC supports the following package designed to provide flexibility under revenue caps:

• Give school boards authority to exceed revenue caps by up to 1% of the state per-pupil allowable spending average. In FY02, according to DPI, this would yield about $74 per pupil and $77 in FY03. Most districts that use this option, then, would receive additional state aid on their extra revenue. It is estimated that an additional $42 million annually in state funding would be required to maintain the state's 2/3 commitment if all districts chose to use this additional revenue authority.
• Maintain the current law inflationary indexing of the revenue caps.
• Maintain the current 40% funding of summer school pupil counts for districts under revenue caps.

Talking Points

• A joint survey by WEAC and the Wisconsin Association of School District Administrators (WASDA) showed that two-thirds of superintendents expect the overall quality of education in their districts to decline between now and 2005. 62% of superintendents say the revenue caps have had a negative effect on the quality of their district's programs and services.
• Revenue caps prevent schools from placing kids in classrooms that work. 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 educational 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 great schools they want. Revenue controls are also based on student enrollment. They ignore districts' actual expenses, the learning needs of students, and economic circumstances.
• The 1% solution should be aided under the 2/3 funding of partial school revenues. Other revenue cap plans call for allowing school districts to generate up to 2% of spending strictly from local property taxes. This 2% plan is harshly disequalizing under the school aid formula. Only property-rich districts will be able to afford the additional taxation. The tax effort of property poor districts will be so prohibitive that it is not likely many would even take advantage of the new revenue-generating authority if it were given to them.
• The governor's budget, as introduced, ratcheted down even harder on revenue caps by eliminating automatic inflationary adjustments and by reducing summer school funding from 40% to 25% of pupils counted in those programs.

For additional information

Please feel free to contact Bob Burke, WEAC Legislative Coordinator, at 800-362-8034 ext. 254 or by e-mail at burkeb@weac.org for additional information about this budget brief.

Posted May 14, 2001