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MacIver Analysis: The Assembly GOP Education Plan

Comments | Posted in News | By MI President Brett Healy | Posted June 7, 2017 5:00 AM

Spearheaded by Rep. Mary Felzkowski of Irma and Rep. John Nygren of Marinette, the plan would increase revenue limits for certain school districts while spending $70 million less than Gov. Walker's proposal

June 7, 2017

By Ola Lisowski
MacIver Institute Research Associate

Late last week, MacIver News Service broke news of a Assembly Republican-led plan for K-12 education spending under the 2017-19 biennial budget. On Tuesday, Republicans formally introduced the proposal to the media.

While the proposal spends over $70 million less in General Program Revenue (GPR) compared to Gov. Scott Walker's proposal, the plan's authors says classroom spending would stay about the same, if not slightly more.

Vos ARC plan pull quote.pngThe plan would increase revenue limits for certain school districts. It also does away with a proposed requirement to have school districts certify that employees are paying at least 12 percent of their health care costs.

Under Walker's budget proposal, the so-called "Act 10 requirement" would ensure that school districts are following the law in requiring their employees to contribute a certain amount towards health care plans. The Assembly plan strips out that idea after months of complaints from school districts across the state.

Other changes to Walker's education package include one requirement that would limit school district referenda to spring elections or general election days, except in the case of special circumstances such as a natural disaster.

Another provision would create a grant program to fund personal computers for high school freshmen. That would cost $125 per pupil to the tune of $18.4 million over the biennium.

"As Republicans, we have always believed in the idea of local control," Assembly Speaker Robin Vos (R-Burlington) said. "That's why we have said, if voters need to spend more money inside the classroom or in local governments, we believe they should go to referendum. Under the proposal that Governor Walker has laid out, basically when a local district or a local municipality decides to increase their levy...the state of Wisconsin, through income and sales tax dollars, is buying down that increase."

Felzkowski ARC plan pull quote.png Speaking with MacIver on Friday, Rep. Mary Felzkowski (R-Irma) said the Assembly plan would provide more opportunities for children in Wisconsin schools while addressing lowrevenue limits, an issue she says has been a concern for officials around the state for years.

"We're still putting more money into the classroom that's spendable, but we're reallocating it," Felzkowski said. "It's a way of giving to even out the opportunity base."

The plan would increase the low revenue adjustment for school districts to $9,800 per pupil in the second year of the biennium, up from $9,100 under current law and in Walker's proposal. Statewide, that would increase the ability of low-spending school districts to raise local property taxes by a combined $92.2 million, according to a nonpartisan Legislative Fiscal Bureau memo.

Current law sets revenue limits that dictate how high-spending school districts can levy local property taxes. The system was created in the early 1990s, and Felzkowski says frugal districts that were locked into low rates have since struggled to provide sufficient services for their students.

"I don't think anybody will dispute the fact that it's a huge inequality. It's lack of opportunity. If you've got a large district, they're levying at over $10,000. There's more opportunities for kids," Felzkowski said. Looking at school districts like Elkhorn or Merrill, she said, "where their levy limits are locked down at $9,200, they're struggling to meet the requirements to get these kids into college. The opportunities aren't there. I don't think anybody can say that's fair or that we're doing a good job."

Sixty percent of K-12 students in Wisconsin attend low-spending school districts, according to Felzkowski, who said another fiscal memo showed that "54 percent of the districts in the state of Wisconsin would benefit more under our program than the way that Governor Walker has it."

Under the plan, the Green Bay Area school district would see the biggest funding increase - an estimated $5.9 million increase from the low revenue adjustment, according to a fiscal bureau memo. Many suburban districts in southeast Wisconsin, as well as Milwaukee Public Schools, the state's biggest district, would not see any additional dollars from the change, and would see significantly less categorical aid, compared with Walker's plan.

The proposal could put Walker's pledge to lower property taxes every year in danger. While revenue limits aren't equal across the board, other sources of funding, such as cFitzgerald ARC plan pull quote.pngategorical per pupil aid, are. Those funds have allowed school districts to get extra dollars distributed equally, based on enrollment, that don't affect the property tax base.

The plan pulls back a major increase in the school levy tax credit compared to Walker's proposal, deleting $35 million from a proposed $87 million allocation in the first year of the biennium, but increasing funding in the second year by $60 million. That credit goes to homeowners and helps keep local property tax levies low.

Under the Assembly plan, property taxes would remain lower than current rates, though not as low as under Walker's plan. Tax bills on the median household would be $10 higher in 2018 and $11 higher in 2019 compared with Walker's budget proposal, or $10 lower in each year compared to current tax levels.

Property taxes remain a top priority for Walker, who recently said he would veto a budget with any property tax increase for homeowners.

In order to help pay for the increased revenue limits, the Assembly plan would cut back on some of Walker's proposed increases for per pupil categorical aid.

ARC vs Gov Per Pupil Aid Chart.png

The Assembly plan proposes increasing that pot of money by $150 per pupil in 2018 and by another $200 in 2019. Walker's plan would have increased per pupil aid by $200 in the first year, and $204 in the second. Overall, the increase to per pupil aid is significant compared to the current budget - the Assembly plan would spend $418 million more than current levels on per pupil aid alone.

General school aids, largely distributed through the equalization formula to help more property-poor districts, are increased by $102.8 million across the biennium in the plan compared to current spending levels. That would be a $30 million increase to Walker's suggested spending.

The Assembly plan doesn't make significant changes to any of Wisconsin's private school choice programs, though current law requires any per pupil aid increases also go to those students. For that reason, parental choice students wouldn't receive as much funding as under Walker's plan.

New school choice enrollment numbers have thrown off some of the numbers in Walker's budget, originally proposed in February. Since then, re-estimates show 800 more students are expected to participate in 2018, and 1,200 more in 2019. For that reason, total spending on the school choice program will increase compared over the two-year budget cycle.

Some in the Senate, including Sen. Scott Fitzgerald (R-Juneau), have said they hope to see more significant changes to Wisconsin's school choice programs in this budget.

"The State Senate remains committed to fully funding K-12 education as Governor Walker proposed in his administrative budget," Fitzgerald wrote in a statement released Tuesday. "We will continue to look for ways to support low spending districts, but a proposal that both raises taxes and picks winners and losers within our school districts is a move away from the position of both the Governor and the Senate Republican caucus. The Assembly package that was endorsed today is simply not the direction the budget is headed."

As for Felzkowski, the tough decisions Wisconsin made in the past few years have allowed for significant investments this time around. The issue of revenue limits has been around for years, and it won't likely go away soon.

"We just felt that this was the time that we needed to bring up those low-spending districts. With this amount of dollars going into education, this is really the primetime for us to be able to do it," she said.

"We just have to make sure that all kids have opportunities and that's what we're trying to do here."