Budget Blog: Joint Finance Increases K-12 Spending, Expands Statewide School Choice

By Brett Healy -

August 28, 2017

By Ola Lisowski
MacIver Institute Research Associate

[Madison, Wis…] The Republican-controlled Joint Committee on Finance (JFC) voted Monday to significantly boost K-12 public education spending – just not quite as much as Gov. Scott Walker has proposed in his state budget plan. The Legislature’s budget committee also expanded Wisconsin’s school choice program, allowing families earning up to 220 percent of the federal poverty level to participate in statewide choice, up from 185 percent.

Joint Finance’s K-12 plan increases funding by $639.3 million over current spending, keeping Walker’s proposed categorical per pupil aid increases while also addressing low revenue adjustments.

The vote was along party lines, with JFC’s 12 Republicans voting in favor of the motion and four Democrats voting against.

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The proposal pulls back slightly from Walker’s generous plan, which would have boosted public education funding by $648.2 million over the 2017-19 biennium.

The JFC education spending plan maintains Walker’s $508.7 million investment in per pupil categorical aid – money sent to all districts outside of normal revenue limits as long as certain criteria are met. That fund will see a $200 per pupil increase in 2017, followed by another $204 per pupil increase in 2018. By the end of the biennium, schools will receive $654 per pupil in that source of categorical aid.

Walker’s original proposal tied some of that increased funding to compliance with Act 10, the 2011 law that reformed public sector collective bargaining in Wisconsin. The governor’s budget blueprint would have required school districts to certify that employees are paying at least 6 percent toward pension plans and at least 12 percent toward healthcare.

Instead, school districts will be required to annually report employee healthcare contribution levels to the state Department of Administration. That move will increase transparency statewide, marking the first time school districts are required to report Act 10 savings.

Walker applauded the committee’s final product.

“Thanks to the members of the Joint Finance Committee for supporting the education portion of my budget. Once signed, this budget will include more actual dollars for K-12 education than ever before in our history,” the governor wrote in a press release following the vote.

Joint Finance also voted to increase the low-revenue adjustment, which allows certain school districts to levy higher property taxes. That adjustment is currently set at $9,100 per pupil. After Monday’s vote, the funding level would increase to $9,300 in 2017, $9,400 in 2018, and by another $100 per pupil annually until the limit hits $9,800 per pupil in 2022.

Certain school districts will be able to raise taxes by up to $23.2 million statewide as a result of changes to the low revenue adjustment.

As a result, the statewide revenue limit authority will increase by $23.2 million.

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That plan is the same as one introduced by the Senate Republican caucus last month.

JFC also picked up the Republican Senate plan on changes to sparsity aid and performance funding for Milwaukee schools.

The plan provides school districts that have grown too large to receive sparsity aid of 50 percent of the funding they received in the prior year. Rep. Mary Felzkowski (R-Irma) called that change a “safety net” for districts that grow slightly too large to receive the funding.

JFC also adopted a provision increasing incentives for rural schools to commit to shared services and whole grade sharing. Under current law, few districts pursue those strategies – including the ability to share certain administrative positions such as human resources and information technology.

Finance co-chair, Rep. John Nygren (R-Marinette) shot back at Democrats, who criticized the funding increase as not enough.

“You’re actually increasing spending in this proposal by $727 million over the governor’s proposal. In total, Democrats so far have proposed $1.5 billion in new spending in this budget over the governor’s proposal,” Nygren said, referring to the Democrats’ K-12 funding proposal.

“Let’s put that in context. We don’t deal with Monopoly money here, we deal with real money. So to make that happen, to fund that, we would need a 5 percent increase in revenue over what we’ve already projected. Or, if you’re going to raise taxes, which I know you guys like to do, that would be a 10 percent increase in individual income tax collection,” he said.

Under the JFC plan, access to school choice increases more than Walker had suggested. By increasing eligibility for the Wisconsin Parental Choice Program to 220 percent of the Federal Poverty Level, an estimated 550 more students would be able participate in the statewide program. Families of four earning up to just over $54,000 annually will now be eligible to apply for alternative education options through the choice program.

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The plan increases the number of state charter school authorizers, allowing the director of the Office of Educational Opportunity (OEO), any University of Wisconsin chancellor, and any technical college district board to contract with an independent charter school. Under current law, only the director of the OEO, chancellors of UW-Milwaukee and UW-Parkside, and the boards of Gateway and Milwaukee tech colleges can do so.

Public school open enrollment – often called the state’s largest school choice program – would see a reimbursement increase of $100 per pupil per year, beginning in 2017 until 2020.

Students who are new to Wisconsin – who currently cannot apply for parental choice – would now be able to apply. Under current law, students are only allowed to enter in certain grades and cannot re-apply if they are waitlisted for more than a year. The plan passed on Monday allows students placed on a waiting list to enter the program regardless of grade level once they actually enter.

The plan also prorates summer school payments for choice schools, and allows independent charter schools to receive state payment for summer school.

The Opportunity Schools Partnership Program (OSPP), established in the last budget to provide extra help for troubled school districts, is refined in the proposal.

The JFC plan sends $3.7 million to Milwaukee for failing schools. JFC deleted Walker’s proposed $1.9 million to reward the city’s best-performing schools. Another $1.4 million would be sent to Milwaukee Public Schools for summer schools, beginning in 2018.

As in the Senate’s education proposal, school referenda will be limited to regularly scheduled election days or on the second Tuesday of November in odd-numbered years, except in cases of emergency. Districts would also be limited to holding referenda on two dates per year.

One provision sure to gain the attention of the Legislature’s fiscal hawks is the inclusion of $9.2 million for laptops for high school freshmen beginning in 2018. The Assembly Republican caucus suggested spending $18.4 million for the electronic devices, which would be provided to all students regardless of family income. Both the Senate and Joint Finance Committee cut that provision in half, beginning the program one year later.

The plan provides more money for high-cost transportation and special education aid, as well as special education transition incentive and readiness grants. Student mental health and robotics league grants also receive more money than the governor proposed.

JFC also changed teacher licensure, creating a “lifetime license” for teachers, administrators, and pupil services professionals after the successful completion of six semesters under a “provisional” license. Faculty members of institutions of higher education would be eligible to teach in public high schools without a special license or permit from DPI. Faculty members would be required to pass a background check before teaching.

Schools also would be required to include more information on annual report cards, including the number and percentage of pupils participating in early college credit programs, youth apprenticeships, advanced placement courses, total community service hours completed, and the number of students who earned industry-recognized credentials through technical education programs.

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Senate co-chair Alberta Darling (R-River Hills) hoped to strike a tone of compromise, calling for Democrats to dial back their partisanship.

“I’m sick of this victimizing teachers. And I just want to set the record straight, let’s agree that education is all of our priority. It is because it’s the number one funded program in our state, it has always been that. So let’s agree that we all have education as our number one priority because it’s our number one investment,” Darling said.

The budget committee will meet again on Tuesday, Sept. 5, and is expected to continue meeting through the week until budget work on the final issues of taxes and transportation is completed.